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South Korean investors quit China over rising costs March 22, 2008

Posted by tkcollier in cool stuff, Economy & Business.
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Lately, a growing number of South Korean factories have abruptly closed down and the South Korean owners have disappeared as a slew of policies, including rising labour costs and an end to tax breaks, bite into their profit margins.
The wage rise, yuan appreciation and higher input prices are the main reasons, The minimum wage in Qingdao has risen 43 percent in the past three years to 760 yuan ($107) per month. 20 to 30 percent of the 6,000 South Korean firms in the eastern port city were losing money.
Other government initiatives to share China’s growing wealth more widely and to minimize social tension are also deterring employers who are required to provide more mandated benefits for their workers and are paying higher pollution fees.
Employers are grumbling in particular about a new labour contract law, which went into effect at the beginning of this year, that makes it harder to lay off staff.

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