Where is the next Shenzhen


I would like to talk more about Shenzhen. So I searched “Shenzhen” in the blogsphere. However, most of the blogs popped out have no significant connection with the factory working conditions there. I am glad most foreigners still enjoyed this city, even if it has some unpleasant reputation around the world. Then I searched Foxconn, which is known as the largest electronic contract manufacturer. Surprisingly, instead of blogs about the terrible working conditions, which I was expecting, most reports about Foxconn now is about how it is going to outsource its own business.

There are two relatively opposite directions Foxconn is going. First is Foxconn is expending its business to less developed countries, such as Indonesia and Vietnam. I believe that is what most people are expecting. Just like what I talked about in my previous blog, China was the next Japan. After Japan successfully transfer from an export country to  an import country around 1970s’, China became the next Japan and foreign companies outsourced billions of business to China’s contract manufacturers. Now, China is doing the same to other countries. As China is focusing on the economic transferring, more and more factories are forced to shut down due to poor working conditions or uncontrolled environment pollution. Major manufacturers, like Foxconn, with their advanced managing model are trying to outsource their work to cheaper labor countries.

At the same time, there are posts about Foxconn build plants in US as well. Reports said that Foxconn invested plant in US with robot labor forces. Clearly, US is a great choice for such factories with its advanced technology and large electronic market. However, this is totally opposite to what the contract manufacturers are famous for—-cheap labor. Of course, they have done their homework. It must be more profit for them to draw such decision. Maybe it is the era that even the cheap labor force can no longer beat the technology efficiency.

We can hardly tell which is a better direction to go. But it becomes interesting to guess where will be the next Shenzhen. The countries with even cheaper labor forces? Or the countries with more efficient production lines and larger market?

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6 thoughts on “Where is the next Shenzhen

  1. You’ve got some really interesting ideas in your post. It surprised me that Foxconn is going to build a factory in the US, but I guess it makes sense with the technology we have in this country. My question is just when will this technology completely surpass the cheap labor in other countries? Or, in other words, when will technology surpass the need for human labor at all?

  2. Xin,

    I am glad to see that you have pursued the topic of Shenzhen and Foxconn after our Mike Daisey discussions. It seems to me that Foxconn is currently making a business decision much like Nike’s in the case we have read. To cut costs and maximize profits, companies will constantly look for a country with lower labor standards to produce their products in. This upsets me a fair deal. On the other hand, however, I find Foxconn’s decision to purchase a plant in the U.S. very admirable (aside from the fact that it will not provide any Americans with jobs). Hopefully once more information is released about Foxconn’s outsourcing, I can read another one of your blog entries to see your opinion. Keep up the good work.

  3. I think it’s really interesting that you found these two contrasting decisions that Foxconn is exploring. It is very surprising to hear that a company like Foxconn, one that is known to us for being the outsourced labor, is looking to outsource their work even further. This choice worries me because of the conditions already discussed in such factories. While we can’t be sure of the actual extent to which the stories are true, we are fairly certain that outsourcing often fosters less safe conditions. I would be worried to see the effects of an outsourcing agreements between two countries with already less strict working conditions.

  4. You are right that Foxconn, which I believe is actually a TAIWANESE firm, scrambles the normal “narratives” about progress, technology, economic development and developing countries.

    I had not heard yet about sourcing in the United States. A straight-forward MArxist analysis could point out how the global corporations and their allies in government, starting in the 70s and 80s, used free trade to make it easy to undercut higher wages in the US.through trade treaties. As the jobs flowed outward, wages stagnated and even fell in the US. Now, as tight labor markets in the Japans, Chinas, South Koreas, of the Pacfic Rim push wages higher, a next round of wage-undercutting occurs in Vietnam, Indonesia and so on.

    And, even, haha :D, the USA. Castells, a sociologist I use, talks about the “fourth world” which are those zones within the urban core of the first world</a. where sweat shops and other forms of exploited labor proliferate.

  5. Next Shenzen: Arizona…

    anti-union laws, cheap land, close to transport infrastructure, growin population, and multi-ethnic population (latino, white) that can be pitted against each other….

    🙂

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