The 23rd Survey of Investment Related Costs in Asia
and Oceania
(FY 2012 survey)
May 2013
Overseas Research Department
Japan External Trade Organization (JETRO)
Data, statistics and the reference materials within this report have been compiled by
JETRO from publicly-released media and research accounts. Although these statements
are believed to be reliable, JETRO does not guarantee their accuracy, and such
information should be checked independently by the reader before they used to make
any business or investment decision.
The 23rd Survey of Investment Related Costs in Asia and Oceania
JETRO conducted a comparative survey of investment-related costs in 41 major cities and
regions throughout Asia and Oceania in the period between December 2012 and January 2013.
The survey revealed that Japanese companies are mainly concerned about wages. With the
economy steadily growing, minimum wages have been rising greatly. This trend is expected
to continue into 2013. With domestic markets maturing, Japanese companies are increasing
their motivation to advance into Asian countries and regions for the purpose of market
development and risk dispersion. However, there has been no change in the situation where
Japanese companies are required to take some measures against rises in various costs.
For this survey, Ulan Bator (Mongolia) was added. The survey was also conducted in six
Japanese cities, including Yokohama and Naha, in order to make comparisons between
Japanese and foreign cities. The following are summaries of what should be noted about
wages, property-related costs, and Ulan Bator, the newly added city.
1. The basic wage rate showed a two-digit rise in some regions.
In the questionnaire survey JETRO conducted in October and November 2012 to study the
activities of Japanese companies operating in China, Thailand, Vietnam and many other
countries, the largest percentage of respondents pointed out the issue of the rise in wages of
employees as a problem in their conduct of business in these countries as in the previous year.
In China, the manufacturing and non-manufacturing sectors saw the basic wage rate rise
between 2011 and 2012 by 11.7% and 9.8% respectively. The annual total burden, including
social insurance premiums, also rose in each city. In the case of workers especially, it rose by
about 20% in three cities: by 20.4% to 7,328 USD in Dalian, by 20.2% to 7,867 USD in
Shenyang, and by 19.8% to 7,745 USD in Guangzhou.
Among the major countries in ASEAN, a rise in the basic wage rate was observed, in
descending order, in Vietnam (19.7%), Indonesia (14.7%), Thailand (10.9%), the Philippines
(5.9%), and Malaysia (4.7%). The rate for the manufacturing workers in Vietnam was 21.0%,
exceeding the result of the 2011 survey (18.2%). However, when the average basic (monthly)
wage is compared among major cities, that for workers in Hanoi is 145 USD, less than a half
of that for workers in Bangkok (345 USD). The average basic wage for the workers in Jakarta
is 239 USD, about 70% of that for the workers in Bangkok.
Among the newly emerging countries, such as the CLM countries (Cambodia, Laos, and
Myanmar), Bangladesh, Pakistan, and Sri Lanka, the rise in the basic wage rate is highest in
Myanmar (13.3%) and Bangladesh (13.0%). The rate in the manufacturing industry in
Myanmar shows a 18.0% rise, the second largest after Vietnam among the survey countries.
In Dacca, because a sufficient number of workers cannot be employed if the minimum wage
is offered, the monthly wage for workers of Japanese companies is 74 USD, far higher than
the minimum wage of 39 USD. The wage for workers in both Cambodia and Phnom Penh is
74 USD, the same as in Dacca. However, Japanese companies burden has been increasing
year by year partially because additional benefits, such as perfect attendance allowances,
commutation and housing allowances, and health allowances, were made obligatory. On
March 29, 2013, the Cambodian Government announced that it would increase the monthly
lowest legal wage from 61 USD to 80 USD in May 2013. Although the increase is applied to
Copyright (C) 2013 JETRO. All rights reserved. 1
the sewing and shoemaking industries that belong to the Garment Manufacturers Association
in Cambodia (GMAC), it seems to be influencing other industries because the sewing industry
is a major industry in Cambodia.
In India, the basic wage rate rose by 13.0% in the manufacturing sector and by 11.8% in the
non-manufacturing sector. Workers wages also are at a similar level to those in Thailand, one
of the advanced ASEAN countries. The average monthly wage for workers in Bangalore is
398 USD, exceeding those in Guangzhou (395 USD). Workers monthly wages in New Delhi,
Chennai, and Mumbai were 276 USD, 324 USD, and 188 USD respectively.
2. In China, the legal minimum wage was raised across the board
In many cities in China, local governments raised the legal minimum wage. The highest
minimum wage was 254 USD in Shenzhen in 2012. Because China's Communist Party
leadership announced an objective to double per capita national income in 2020, compared
with 2010, China is expected to continue to increase legal minimum wages.
Taiwan raised its legal minimum monthly wage to 654 USD on April 1, 2013, and South
Korea raised its legal minimum daily wage to 37 UDS in January 2013.
Among the ASEAN countries, Thailand and Indonesia were conspicuous for substantially
raising minimum wages. In Thailand, although the minimum wage had differed from region
to region, it was uniformly raised to 9.85 USD (daily) on January 1, 2013. In the Ayutthaya
Province, where industrial estates were submerged owing to the flood in 2011, the minimum
wage rose by 12.8% from 8.73 USD (daily). In Indonesia, the minimum wage was revised in
January 2013, as in the past, and sharply rose by about 40% in areas where Japanese
companies were concentrated. In Jakarta, the minimum wage increased by 35% to 226 USD.
Because many small and midsize companies that could not deal with a sharp rise in the
minimum wage applied for the postponement of the application of the minimum wage rise,
large-scale demonstrations by workers frequently occurred from the middle of 2012. In
February 2013, about 10,000 workers held a demonstration to demand full application of a
minimum wage, proving that the pressure to raise minimum wages is still strong. In Vietnam,
minimum wages were raised in January 2013 for the first time in 15 months and increased to
113 USD in Hanoi and Ho Chi Minh City.
3. Upward trends in rents and price, ranging from industrial estate to housing
In China, industrial estate rents (monthly) and office rents (monthly) rose slightly in all the
cities surveyed except Shenyang, where they fell. On the other hand, housing rents for local
Japanese staff (monthly) rose in all the cities. To deal with a rise in real estate prices, the State
Council introduced five real-estate control measures, such as restraints in housing purchases
and securing of housing sites, at the executive meeting held on February 20, 2013. Based on
these measures, the government of each government-ruled municipality, economically
independent (from provincial government) city, or province set a housing price restraint target
at the end of March. In April, newly built house prices increase by 2.1% on the previous
month in Guangzhou City and by 2.0% in Shanghai City. Of 70 major cities, 67 cities show a
continuing rise. The effects of the real-estate control measures are drawing attention.
Copyright (C) 2013 JETRO. All rights reserved. 2
In Hong Kong, where a rise in real estate prices has become a problem, the average purchase
price of industrial estates increased by 11.5% and that of housing for local Japanese staff
increased by 30%.
In Singapore, the sales price of land in industrial estates shows upward trend every year, and
rose to a range of between 209 USD and 717 USD (on a per-square-meter basis) from a range
of between 190 USD and 651 USD in the previous year (Jurong Industrial Estate). On the
other hand, monthly housing rents for local Japanese staff leveled off at a range of 2,928 USD
- 6,669 USD after rising continuously for years.
In Indonesia, because foreign companies - mainly Japanese companies have been making
advances into the country since 2011, it is difficult to obtain vacant lots. Sales prices (per
square meter) on the GIIG industrial estate and the Jababeka industrial estate have risen to
180 USD and 298 USD respectively.
In Vietnam, industrial estates have been developed into suburbs in both northern and southern
regions. There are no difficulties acquiring lots, and the sales price of long-term lease
properties has leveled off.
In Myanmar, with the development of the democratization process, an increasing number of
foreign companies have been advancing into the country, with the result that demand has
sharply increased and the prices of industrial estates and houses have risen remarkably.
Housing rents for local Japanese staff in Yangon are more than 4,500 USD, a sharp rise from
the 2011 survey (more than 2,500 USD).
4. Wages have been increasing in Ulan Ba
