TAL Group closes Dongguan plant as wages squeeze low-end manufacturers

Major apparel manufacturer TAL Group said it is closing a factory in Dongguan due to rising wages and has already begun transferring pants orders to its factory in Malaysia, The Wall Street Journal reported, citing a statement form Chief Executive Roger Lee. Closure of the factory underscores the difficulties faced by TAL – supplier to brands such as Banana Republic – and other manufacturers as local governments in China push a transition to higher-value manufacturing by raising minimum wages and the country’s demographic graying shrinks its pool of workers, boosting their ability to bargain for higher wages.