BEIJING — How long will companies be able to afford to manufacture in China? That such a question can be asked would have seemed absurd until very recently.

For the past decade and more, China has been the manufacturing workshop of the world.

Last year, according to IHS Global Insight, the leading financial research company, China exported some $1.7 trillion of goods, 80 percent of which were manufactured in factories, and is set to end the United States 110-year reign as the world's leading manufacturer some time next year.

All has not been well in China's manufacturing heartlands in recent months, however. Foxconn, which makes iPhones and iPads for Apple at its factory in Shenzhen, increased labor rates by 70 percent recently after a spate of suicides among workers.

Strikes at Honda have also aroused concerns among foreign investors about labor unrest in China.

Manufacturing wages across China have increased by 14 per cent over the past year (see inside cover story), making the prospect of producing goods in nearby Southeast Asian countries such as Vietnam or in Bangladesh, Sri Lanka and even Africa seem a viable alternative.

Two large US companies, Ann Taylor Stores, the women's clothing retailer, and Coach, the luxury handbag maker, are poised to relocate production to countries, where labor rates are cheaper.

Mike Devine, chief financial officer of New York-headquartered Coach, which makes luxury hand bags, said at a conference recently a move was in the pipeline.

"We are looking to move production into lower-cost geographies, most notably Vietnam and India," he said.

Michael Nicholson, chief financial officer of Anne Taylor Stores, also told the Wall Street Journal recently the company was assessing the quality of production sites in other countries.