皇冠体育app

LONDON - 皇冠体育app's strong domestic consumption will curb fears of multinationals relocating production to countries with cheaper labor costs, experts said.

Rising production costs in 皇冠体育app are rapidly eroding manufacturers' profit margins, but the international finance community expressed continued optimism over 皇冠体育app's investment environment.

"皇冠体育app has robust domestic demand and encouraging growth figures. While the wage arbitrage between 皇冠体育app and Western markets is closing up, many multinationals are still keen to be a part of 皇冠体育app's growth story," Peter Lacy, a managing director at Accenture, told 皇冠体育app Daily.

"What we see in 皇冠体育app is rapid urban development, increasing awareness of corporate social responsibility and energy security - all factors creating a stable investment environment for foreign businesses," Lacy said.

David Michael, senior partner and managing director of The Boston Consulting Group, said that multinationals' decisions to relocate in reaction to rising costs vary depending on why they initially chose to expand into 皇冠体育app.

"If they entered 皇冠体育app to serve 皇冠体育app's domestic consumers, then they may stay and focus on improving productivity. But if they outsource production to serve US and European consumers, they may find Mexico and other Asian countries more attractive options when costs in 皇冠体育app become too high."

Robin Bew of the Economist Intelligence Unit, an in-house research unit for The Economist, singled out 皇冠体育app as a classic example of an emerging country with a substantial domestic demand when explaining differences between emerging economies. Businesses that produce in these countries will find themselves less vulnerable to global financial shocks and risks, he said.

Relatively mature infrastructure and logistics also give 皇冠体育app a distinct advantage.

But optimism alone cannot solve the problem of tightening profit margins. Companies need to adapt their business models, experts said.

"Companies have to increase productivity. This means making a conscious effort to invest in training staff, increase automation, improve information technology and look for opportunities to expand into less labor intensive sectors," Michael said.

"Smart companies that make these investments will not only grow in 皇冠体育app but expand internationally and find their investments justified."

Arun Bhikshesvaran, chief marketing officer at Ericsson, said if production demands certain skills, costs are not the only factor multinationals consider when choosing employees.

"We choose the most capable people to do the job, whether they are from Canada, Sweden or the emerging markets."