Had dinner with a good friend tonight, a manufacturer who has 5 factories in China. Business has been so good that his factories have been unable to provide enough capacity for his exports and he has been trying to get extra capacity at other factories. What was surprising is that in the past 6 months, it has been impossible to get any other factories to produce his products as they are too busy at churning out products for the domestic market.

My friend said since January, the domestic economy has taken a turn and apart from workers demanding more money, many of his staff are actually opening up their own workshops in their home town producing anything from small electronic components to down jackets.  They now have a better quality of life as they're able to spend more time with their families as national consumption would sustain their small businesses.

I am bringing this up because this would only mean that inflation would continue in China and also in the world in general as foreign exporters would have to pay at least 30-40% more for products produced in China. This would also have a significant impact if we went to KTVs and saunas as mainland Chinese would be more affluent and compete for the better girls.

This may be the reason we have been seeing a drop in quality of WGs working in DG and Macau and HGs in HK as well. This is bad news for us as apart from the decline in quality, expect to dish out more money for PRC WGs in the not too distant future.

I have seen the trend where factories are turning toward domestic market, rather than the export market.
The domestic market has higher volumes, and the quality requirements are generally lower too. Its just easier business for thefactories.

I haven't heard of workers opening up their own workshops so much, because the capital expenses to start something in china are much higher now. Its not like the 90's anymore when any dude could start something in his basement. Now there areregulations and generally expectations are higher.

But  find it hard to see that WG pricing would rise too much. There's simply too much supply. there are still hundreds of thousands of poor people in other provinces and the countryside.

This is one reason why, in addition to the one child policy, IMO, that the Golden Age of DG and the PRD is coming to an end.  Not completely to an end, but within 10 years, DG as we know it will be a shell of its former glory.

i agree. given the rising salary everywhere in china right now, i am sure the prices for WGs will rise soon. besides there are so many wealth people in china, so a lot of good looking one work in BJ or SH instead.

My friend explained that a supervisor working for him for 14 years saved every penny and most Chinese do save quite a bit and have learnt the skills to manufacture the products. These are small workshops in their home villages. When I asked further about the buyers, he said unlike the past, mainland Chinese can now afford to buy their own down jackets while a decade ago they could hardly afford to pay for a train ticket home.

He is now moving further inland where the infrastructure is not as good to places like Anhui, Gansu and parts of Sichuan. It's more expensive to get the goods out to the ports but at least there are still factories with spare capacity. I think I shall take a trip with him on his scouting mission. Maybe I can uncover some fresh newbies there as well.

From what I saw personally, during the depths of the recession in 2008-09, there were many closures of "second-rate" factories. I.e. the factories that were either inefficient, produced bad products, and just generally poorly run. Essentially, the weak ones got weeded out naturally. Also the big fish started eating up the little fish through buyouts and mergers too. But I am talking about export-oriented larger scale mass production factories.

I guess the domestic market has changed everything. Perhaps it has opened doors for even smaller guys to open up and supply in small quantities to whoever is willing to buy at the right price. Price is everything in china.

From what I saw personally, during the depths of the recession in 2008-09, there were many closures of "second-rate" factories. I.e. the factories that were either inefficient, produced bad products, and just generally poorly run. Essentially, the weak ones got weeded out naturally. Also the big fish started eating up the little fish through buyouts and mergers too. But I am talking about export-oriented larger scale mass production factories.

I guess the domestic market has changed everything. Perhaps it has opened doors for even smaller guys to open up and supply in small quantities to whoever is willing to buy at the right price. Price is everything in china.

I have seen the factories I buy from and ship to the US change thier attitude and no longer depend on exports. Several of the factory owners said they can make more money on domestic and they dont need to produce difficult items. One reason to is if there is a problem with a domestic item in the field they can send someone to correct it at a l lot cheaper labor rate.

I agree the cost for WG will increase as the salary's are increasing in china

I had a discussion with a bro long time back. WG Scene in China 10 yrs from now.

If we forecast for another decade, we will find both price, quality and volume at punter;s disadvantage:

Here;s some thoughts:
1) 1 child policy
2) Better standard of living. Better economy. More opportunity.
3) Better educational system. Morality and self esteem.
4) % of male > female. Less supply, more demand.
5) Finally, not sure most of you heard about this. Nowaday, all the good wannabe WGs are frist screened by rich man in China. They visit village from village, picking up the fresh and hotties as their spoil, leaving the less good looking for others. Not to mention the virgin hunter (another topic, another time)

The reasons factories are having capacity issues is not so much because of increased output as it is a labor shortage.  I happen to know this subject very well.

If you want a glimmer of hope for the future... many factories I know plan to bring workers in from the northern territories.  They won't all enjoy working in factories and some will become WG.  Also, most analyst believe China can't maintain it's current growth rate, because the rest of the world will drag it down.

I think there are at least 5 more years of decent punting in Southern China.

The economy news from world wide is not that good.  Most of people afriad for investing in stock market.

However, this should be the time for invest.  Buy a certain amount of fund every month may make a good profit 2-3 years later.

This shortage of capacity for exporters will lead to higher cost of production but can the world take a 30% jump in prices? My friend thinks there is no choice and importers in the US and Europe are accepting this fact. There is nothing that can compete with China at the present moment in terms of production scale, logistics and stable supply of products. This will only lead to more inflation worldwide.

However regarding labour shortage you are mainly talking about the south guangdong province. Plenty of factories are moving up north for the cheaper labour rates and more plentiful workers. The factory workers from the poor provinces would all rather work at a factory closer to their hometown so that they can reconnect with family more often. Now that they have some choice, why go all the way down to guangdong? it is the farthest province you can get, besides Hainan island.

I really hope that guangdong (and therefore dongguan) doesn't get left behind in all this. But I think most people I talk to have said that guangdong is already on the slow path downhill. It will definitely take a number of years though. these things can't change too fast.

Perhaps we will see a new hotbed pop up.... like Zhejiang or Ningbo? Or even better Sichuan!

I agree what hunter said. this is the first time i heard rich people go to village and village to find gals though. but i heard all good looking WGs only go to Shanghai and Beijing because they can make more money than other cities and some of them are even driving Porsche to go to work.... amazing.

As i said before, we should start to venture into Latvia and North Korea meat market!!

I thought there are already many people exploiting those North Korean peasant girls who "escaped" into northeast china from North Korea

Mainland punters, yes, but I never heard of others venturing there.

Latvia I desperately wanna try.  Estonia, Latvia, Poland, yes!

From what I've read...Latvia (with Riga) and Poland are not that good places for mongering. Czech Republic might be a better option.

You are all scaring me all of you people.
Now I have to hurry up and experience Chongpin before everything go dowhill.

Not mongering - I mean bar hopping, meeting civis, etc.  I actually prefer to pick up chicks that way over going to WGs.  WGs are more for convenience purposes.

As for going to Dandong, Liaoning for North Korean chicks, I have read (and heard) some crazy stories.

[ Last edited by  bethpageblack at 17-8-2010 05:20 ]

Amen to that!! Though I still gotta conquer all over china too!