Gone west

Mey Chairsystems, a German producer of industrial chairs, has set up a factory far away from the booming coastal regions of China’s East. Located in the city of Liuzhou in Guangxi province, the company employs 150 staff in China. Of course, Managing Director Dieter Mey knows of the downsides of this location: "The biggest disadvantages are higher transportation cost, longer processing times of local banks or customs and the lower qualification level of many employees."

 

But according to Mey, the local authorities are doing a lot to catch up to the provinces in the East and are willing to act on suggestions. And the remote location comes with more advantages than just accommodating authorities. RMB 3 rent per sqm is extremely low compared to Shanghai or Beijing and maintenance cost are nowhere near the level of China’s eastern coast. Also, the often-cited problem of staff retention and high salary demand is not applicable to Liuzhou. Mey pays RMB 3,000 for a qualified engineer with a decent knowledge of English. Worries about infrastructural deficits are also unsubstantiated in his opinion. "The road network is in impeccable condition and the telephone and internet connections are top." Mey is holding video conferences with his China company and partners three times a week ?without any problems.

 

 

However, investment incentives such as tax rebates or a less strict implementation of environmental policies don’t rank amongst the benefits of the region: "As a foreign investment we are actually monitored more closely". Nevertheless, if Mey had to choose again, he would go for the same location. "Our overall experiences have been very positive" says Mey and summarises the main advantages once more: "No shortage of labour, no job hopping, a justifiable cost structure and a local government that is willing to learn."

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