Recently I did a micro-survey at a shopping mall in Bangkok. I randomly picked up clothes, shoes and hats from 10 different brands. It turned out that save for a pair of golf shoes made in Slovakia and a jacket made in El Salvador, all the rest were produced in Asia.

Nevertheless, among the other eight items, only one T-shirt was made in China, and the others were made in Southeast Asian countries like Thailand, Vietnam and Malaysia.

So is "made in China" being replaced by "made in Southeast Asia?" This certainly seems to be the case for clothes, shoes and hats. The main reason is the rising costs of Chinese labor.

According to Zheng Shengzhong, boss of the Chinese-funded Cambodian Zhenzhou Clothes Company, Cambodian workers at his factory make more than $100 every month, and manager-level employees $200 to $300, far surpassing the local minimum wage. But almost no Chinese worker would accept such a low rate. 

The exchange rate and labor costs, once China's advantages, are gradually turning into disadvantages. This is also why companies like Nike are now shutting down their production lines in China and moving to Southeast Asia.

But the situation isn't as bad as it might seem at first glance. In Zheng's clothes company, the facilities used to produce ready-to-wear garments were made in China. This phenomenon is even more prevalent in Vietnam. Most raw materials and machinery in garment factories there are bought from China.

This could explain two things. The first is why Southeast Asian countries haven't cut, but greatly enhanced, their imports from China. And the second is that Chinese investments toward Southeast Asia have sharply increased in recent years.

Some low- and medium-end labor-intensive industries have transferred to Southeast Asia, but they haven't totally separated from China yet. While relying on Chinese capital, they are also dependent on Chinese facilities and technologies.

Southeast Asian countries are generally smaller nations, which can neither provide a comprehensive industrial chain in a single country, nor independently manufacture certain products.

In this regard, made-in-Southeast Asia and made-in-China can complement and support each other.

According to Ben Simpfendorfer, Managing Director of Silk Road Associates, if Vietnam was to capture 0.5 percent of China's exports each year, it would add 2 percentage points to GDP growth annually.

But how to further deepen a relationship of mutual compensation is the key for future ties between China and Southeast Asian countries.

China should first learn how to provide the right help.

For instance, it can help Southeast Asian countries train the labor force through support by national and industrial associations, and particularly realize technological transfer in low- and medium-end industries. The latest statistics show that among more than 7 million employed Cambodians, over half lack even an elementary or middle school education.

Second, China should also learn about role transfer. It can also help realize the transfer of low- and medium-end enterprises through support by national and industrial associations, and facilitate their development in Southeast Asia.

Besides advantage in economy of scale and infrastructure, China has an unparalleled market, which means huge potential for mutual compensation between Chinese and Southeast Asian economies in the future.

At the moment, the target export markets are still mainly the US and Europe for both Chinese and foreign enterprises transferring to Southeast Asia. This is also why Southeast Asian countries hope to seek a balance between China and the US.

The development of future economic and trade ties depends on how much made-in-Southeast Asia goods can be consumed and digested in China. Only by realizing such a decisive transfer can the East Asian economy really become an independent strong force in the world. This is also the strategic purpose of fueling China's domestic demand.

Fundamentally, consumption is the priority. In this era of globalization, a nation's consumption level directly decides its position in relationships with others.

The author is a senior editor with People's Daily. He's now stationed in Bangkok. dinggang@globaltimes.com.cn