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China is moving up the manufacturing value chain. Beijing's efforts to increase social security for its 1.3billion citizens are leading to an increase in wages and, coupled with a property boom, are making the market a less viable option for low-cost manufacturing.

Chris Devonshire-Ellis, the principal of Dezan Shira and Associates, recently calculated the cost of manufacturing in China and compared this to a similar operation in India or Vietnam.

According to Devonshire-Ellis, if you had a factory employing about 300 workers in Dongguan, China, and included monthly overheads such as welfare costs and rental, your annual expenditure would be about $2.28-million. Now set up the same factory in Ho Chi Minh City, Vietnam, and your annual costs would be about $650400.

Open the same factory in Chennai, India, and your annual costs would drop to $345782.

"It's a big enough gap to consider. It is financially more attractive to manufacture in India than in China," he says.

If companies still wish to do business in China then looking at servicing the increasing consumer-driven market would be wise.

China's middle class is on the increase and if you can get this market segment to part with its savings, then there is money to be made.

It is no secret that manufacturing in China has come with some interesting challenges. Paul Midler's book, Poorly Made in China, is a frank recollection of the challenges he faced while working in China's manufacturing sector.

It includes tales of last-minute price increases and what he refers to as "quality fade".

Cost-cutting measures are sometimes introduced gradually and can only be noticed later - often when it's simply too late.

While it might be cheaper to consider manufacturing operations in India, getting your stuff out of the ports may not be as easy. Devonshire-Ellis says it takes about eight hours to turn a ship in Shanghai's harbour and about 20 hours in Mumbai.

"I am not denying that there are problems in India, there are," says Devonshire-Ellis.

The Indian market has been cited as inefficient and difficult to work with.

The real opportunity in India seems to be infrastructure projects. Devonshire-Ellis believes that there are opportunities for big-ticket infrastructure investments and the Indian government is offering attractive public-private partnerships (with some equally attractive taxbreaks) to make sure that these happen.

India is working on improving its airports as well as its rail and road infrastructure.

Vietnam, too, is uniquely poised as a member of the Association of Southeast Asian Nations (Asean) geo-economic zone. In 2010 Asean's GDP was estimated at $1.8-trillion. But what really makes Vietnam's inclusion in Asean attractive is the free-trade zone that comes with its membership.

It would also be good to consider that "Asean is expected to sign free-trade agreements with China, India, Japan, South Korea and Australia by 2013," says Devonshire-Ellis.