Manufacturers in China are torn between the lure of its ever-increasing and sizeable domestic market and the inexorable rise in its costs of production. Does manufacturing in the mainland still hold its appeal for Swiss companies?

Manufacturing is getting better and better in China; if you visit factories today versus ten years ago, it is like chalk and cheese,” says Roland Schmid, Managing Director of Vela Eurasia, a Swiss engineering consultancy. But coupled with the increasing sophistication of manufacturing in China, has also been an increase in costs of doing business. Recently, DrM, a Swiss engineering firm that develops clean solid-liquid separation solutions, chose India instead as the site for its new manufacturing plant. The question now facing many Swiss manufacturers in China, is whether the benefits between China’s huge local market and comprehensive, world class, value chain, outweigh its higher (and steadily rising) labour costs? Not all Swiss companies are arriving at the same answer.

Mark Andrews has written about everything from Japanese houses to heli hikes on New Zealand glaciers, test drives of Chinese cars to bar and restaurant reviews. He currently specialises in travel articles and reviews of Chinese cars plus articles about the Chinese auto industry.