Hi! Thanks for the question.
I will answer your question point by point by citing articles pointing
to the numbers you require.
1. Cost of labor relative to the US:
“China is emerging as a chief rival. A worker at a Chinese factory
typically costs a company 50 cents to $1 per hour, compared with $2 to
$2.50 per hour in Mexico and $8.50 to more than $20 for the U.S.”
“Production Costs Outweigh Cheap Labor in Mexico”
http://www.ncpa.org/iss/int/2002/pd051402e.html
The next three articles below corroborate these numbers.
“Meanwhile the average labor costs of industries in China are only 5
percent of those in developed countries like the United States, Japan
and Germany, said the statistics.”
“Cheap Labour Fuelling Growth”
http://www.china.org.cn/english/MATERIAL/48127.htm
In terms of the electronics manufacturing industry, here are the
hourly rates for labor.
US - $9.6 per hour
China - $ 0.85 per hour
“Chinese Electronics Manufacturing and Supply Chain Concerns”
http://www.circuitree.com/CDA/ArticleInformation/features/BNP__Features__Item/0,2133,91482,00.html
2. Cost of electricity (for businesses) relative to the US
In answer to this question, I will cite as an example a province in
China and the rate of electricity their for industrial consumers.
“By the end of 2001, the average electricity price in Guangdong
Province was 0.72 yuan (9 US cents) per kilowatt hour, much higher
than the average level on the Chinese mainland of 0.368 yuan (4 US
cents).
“The price of electricity for industrial use was especially high in
Guangdong and was even higher than the developed countries except
Japan.”
“Lin told the press conference that the price of industrial
electricity will decrease by 0.08 yuan (1 US cent) per kilowatt hour,
that of commercial electricity will decrease by 0.13 yuan (1.6 US
cents) and that of household electricity by 0.03 yuan (0.36 US
cents).”
“Power Price Cut to Drive Growth”
http://www.china.org.cn/english/BAT/32517.htm
3. China government subsidies for businesses (eg: free land? tax
holidays?)
Our source for this summarizes the 2002 revision of China tax laws.
“The draft of the 2002 Law allows for tax incentives to come in the
form of ‘tax reductions and exemptions, rate reductions, accelerated
depreciation, investment credits, special deductions, and other
methods.’"
“China's New Corporate Tax Law - Post-WTO”
http://216.239.37.100/search?q=cache:kPHOnWJGZEMC:www.amcham-china.org.cn/publications/brief/document/Bus%26Tax11-01.htm+china+tax+subsidies+holidays&hl=en&ie=UTF-8
4. Any China government subsidies, which are specific to exporting
businesses.
“China officially abolished direct budgetary outlays for exports on
Jan. 1, 1991. Nonetheless, it is widely believed that many of China's
manufactured exports receive other types of export subsidies… Other
forms of export subsidies involve guaranteed provision of energy, raw
materials or labor supplies.”
“Exports of some agricultural products, such as corn and cotton, still
benefit from direct export subsidies. However, China substantially
reduced the level of corn export subsidies in 1999 and 2000.”
“Preferential tax incentives are another example of export subsidies.
China is attempting to harmonize the system of taxes and duties it
imposes on enterprises, domestic and foreign alike. As a result,
preferential tax and duty policies that benefit exporters in special
economic zones and coastal cities have been targeted for revision.”
“EXPORT SUBSIDIES”
http://www.chinaonline.com/issues/econ_news/USTR/ustr_es.asp
Examples of China’s Cost Advantage:
I was not able to find cash figures but only percentages.
“And we estimate that China's producers of networking devices can beat
Cisco Systems and Nortel Networks on price by at least 25 “
“China: from the Great Leap Forward to the Great Step Forward”
http://www.turnerinvestments.com/index.cfm/fuseaction/documents.detail/CID/790
Another example is not in comparison with the US but in Hungary this
time.
“One recent example concerns Microsoft, which prompted Flextronics to
move Xbox manufacturing from low-cost Hungary to lower-cost China.
Most of the Xbox components came from Asia anyway. So the motivation
was more than the lower labor rate of $1/hr vs. $3/hr. Consolidating
the supply chain is saving Microsoft an estimated $10-$15 per box,
even after taking logistics into consideration.”
“Chinese Electronics Manufacturing and Supply Chain Concerns”
http://www.circuitree.com/CDA/ArticleInformation/features/BNP__Features__Item/0,2133,91482,00.html
Our last link meanwhile would be of interest to you since it gives the
business profile of China.
China Business Profile – Investment
http://www.hsbc.com.hk/hk/corp/aoc/businf.htm
Search terms used:
China US “production cost” “cost advantage” tax subsidies
I hope these links would help you in your research once more. Before
rating this answer, please ask for a clarification if you have a
question or if you would need further information.
Thanks for visiting us again.
Regards,
Easterangel-ga
Google Answers Researcher |
