With labor costs rising in the Pearl River Delta since May, more and more original equipment manufacturers (OEMs) are under pressure to move their factories either inland or abroad to the Southeast Asia, where labor costs are lower. However, analysts said closing up facilities and moving away may not be so easy to do.

In May, the Guangdong provincial government raised the minimum wage standard, on average, by 21.1 percent - the largest wage increase since China's opening up began three decades ago.

In the material processing industry alone, 60 percent of total expenditure was labor related, meaning the 21 percent pay increase may also be a bitter pill to swallow.

Bigger companies too are feeling the pinch from an uptick in labor costs.

Taiwan's Foxconn Technology Group announced two wage hikes in June for its workers in the mainland after 12 committed suicide at company facilities. Foxconn also increased investments in Hubei, Henan and Hebei provinces, as well as Tianjin municipality, seeking to relocate some production to less expensive, inland sites.

Singapore-based Flextronics International, a major global electronics manufacturer, currently has production facilities under construction in Ganzhou, Jiangxi province.

In addition to providing telecom, computing and consumer OEM services, the location will also manufacture chargers and cables starting at the end of August.

The company plans to hire 10,000 workers before the beginning of next year and another plant, which will employ some 30,000 workers, is also being planned.

HP laptop's OEM, Inventec Corp, also plans to move to Chongqing in November.

Some companies are thinking about going even further a field.

Guangdong Chuangxin Shoes, which makes shoes for Nike Inc, is thinking of moving its factory to Vietnam. Wu Zhenchang, chairman of board, said the average salary in Vietnam is 40 percent of a similar position in China.

"We have raised our salaries by 25 percent for workers in Guangzhou, and now we can't afford to make shoes priced below $30 here."

One Taiwan businessman, who came to the mainland 20 years ago, surnamed Zhang, is a Nike OEM producer. His factory once employed 20,000 workers and enjoyed export sales of $100 million per year. Now his company is only half the size it used to be.

"Twenty years ago, I paid workers 200 to 250 yuan per month and they were so happy to work for me (but) now, even 1,000 yuan a month cannot (attract) someone in Guangzhou," he said.

According to the Department of Foreign Trade and Economic Cooperation of Guangdong province, Pearl River Delta companies are shifting new productivity to inland regions, while research and development, sales, accounting and management functions will stay with the Delta-based headquarters.

Liang Guiquan, dean of Guangdong Academy of Social Sciences, said: "There isn't an obvious trend that enterprises are moving out of the Pearl River Delta, but in the next five to 10 years it will be a trend and companies that stay may also change their business models to more value-added industries."

Ding Li, director of the competitive power center at the Guangdong Academy of Social Sciences, also said most companies have chosen to stay because of high moving expenses.

"An enterprise relies on an eco-system and does not operate alone. They need upstream industries to provide raw materials and downstream industries to provide markets. These connections make up a big part of the total costs," he said.

Zhang Huarong, 53, is one of the first businesspeople who left Dongguan and moved to Ganzhou.

Seven years ago, his company, Huajian International Shoes City, built a production base in Ganzhou, where the labor supply was abundant and costs were 30 percent cheaper than Dongguan.

In addition, electricity was priced 32.4 percent less and water was 66.7 percent cheaper.

After a couple years of being satisfied with the lower costs, Zhang realized that his total expenditures were not actually decreasing. And, due to the lack of support facilities, most raw materials had to be transported from Guangdong.

"In Dongguan, 3 percent of our costs were for transportation, while here it is at least 10 percent," he said.

A shortage of experienced workers and managers is also a concern.