Relocating labour‐intensive manufacturing firms from China to Southeast Asia: a preliminary investigation

Background China’s rise as a “world factory” since the late 1970s has been attributed to the strategic coupling of local assets, particularly low–cost labour in the coastal regions, viz. Pearl River Delta (PRD) and Yangtze River Delta (YRD) in the Global Production Networks (GPNs) driven by transnational corporations (TNCs)’s cross-border investment. Since 2000, these export-led regions have encountered unprecedented challenges, especially the rising cost of labour, land, shortage of labour, policy changes, and shrinking market demand of western advanced economies, which have engendered spatial relocation of labour-intensive manufacturing firms from China to lower-cost locations, e.g. inland China and neighbouring Southeast Asia. Compared with numerous studies on the internal industrial relocation within China, i.e. from the coastal regions, e.g. the PRD and YRD to the mid and Western provinces and cities, e.g. Wuhan, Chongqing and Chengdu (He and Wang 2012; Yang 2009, 2013), little has been conducted on the cross-border production expansion to the neighbouring Southeast Asian countries, e.g. Vietnam, Indonesia and Cambodia. In the meanwhile, these Southeast Asian countries have Abstract