Fixed Asset Investments in China Continue Rise

One of the aspects of globalization that has benefited Western companies is the ability to build plants in China on the cheap, relatively speaking.  Most people know that labor is substantially cheaper in China.  Indeed, the entire issue of labor outsourcing has been featured prominently in the news.  What gets less visability, however, is that capital costs are also substantially cheaper in China.  This only fuels the incentive for Western-based multi-nationals to continue shifting production to Asia. 

From the Shanghai Daily newspaper:

CHINA'S fixed asset investments continued to rise last month, buoying the money invested in factories and infrastructures to 29.6 percent in the first four months of this year, the National Bureau of Statistics said today.

Investments totaled 1.8 trillion (US$224 billion) from January to April, the bureau said.

In addition to the cheaper capital costs, the Chinese government also throws in various economic incentives such as tax holidays.  Without any counter-incentives from the U.S. and European governments, Asia looks increasingly attractive as a location to base manufacturing operations.  And the statistics continue to bare this out.