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Rising Costs Force Chinese Manufacturers Further Inland

A rise in labour and land costs has prompted computer makers and their suppliers to move their Chinese factories inland.

According to an article on The Financial Times, in what could be termed as the largest shift in PC manufacturing and logistics in the last ten years, top computer makers HP, Acer, Lenovo, Dell and Asustek are opening units in the Chongqing and Chengdu in western China.

FT revealed that Hewlett-Packard, Acer and Asustek have chosen Chongqing while Dell and Lenovo are opening units in Chengdu.

The move in PC manufacturers has also led Quanta, HP’s biggest manufacturing partner which supplies components to other PC makers as well, to open a unit in Chongqing. Other small and big PC manufacturers are also moving base to Chongqing.

“We will become the world’s largest notebook manufacturing base within a year as a result,” says Huang Qigang a government official from the Liangjiang New Area, in Chongqing, where the factories are being set-up, told the FT.

“The industry will create total revenues of Rmb 700 billion and output of 100 million notebooks next year,” he added.

Chengdu plans to become the manufacturing hub of 80 million notebooks and 150 million tablet PCs by 2015.