Taiwan - based technology company Delta Electronics, a supplier of power components to Apple and Tesla, is cutting staff at Chinese factories and moving production to Southeast Asian countries and India.
This was stated in an interview with the Financial Times by the chairman of the Board of the company Yancey Hai (Yancey Hai).
According to him, the number of employees in China has already been reduced by 40 percent, but the company is going to bring the figures to 90 percent. Thus, only one in ten employees will remain at the Delta Electronics factories.
Hai pointed out that the trade war between Washington and Beijing influenced this decision, but China's problems are not limited to the confrontation. The fact is that the second economy of the planet is no longer an attractive place for factories. Since 1992, when the first Delta factory was opened in Dongguan, wages there have increased tenfold. Moreover, staff turnover has increased significantly, so India now looks much more attractive.
The head of the company noted that only fully automated production facilities will remain in China. Such as the line in the city of Suzhou, where three people work instead of 42. In addition, sensitive technologies, such as those related to telecommunications equipment, have already been withdrawn from China.
Delta Electronics isn't the only tech company trying to move capacity out of China, but most of them are reluctant to share the details. They are afraid of incurring the wrath of the Chinese authorities, who are able to significantly complicate the process. However, the reasons for their actions are the same — pressure from the United States, expressed in duties on Chinese products, and the rapid growth of its cost price.
Meanwhile, Beijing continues its war with its own technology companies. The other day, another blow was dealt to Alibaba — the UC Browser developed by it disappeared from local app stores. Before that, the Chinese authorities blocked the entry of a subsidiary of the financial company Ant Group on the stock exchange, after which they forced it to put its business under their control. There were claims against another technology conglomerate, Tencent, about the purchase of the online educational service Yuanfudao in 2018. Chinese President Xi Jinping felt that corporations have gained too much power, so tough measures should be taken against them.
