One of the leading Japanese electronics company, Seiko Epson, has pulled out its plans to invest in China. The company has plans to Setup a manufacturing plant in China and hire almost 20,000 workers but due to the increasing cost of wages in China, Epson decided to divert their investments to the Philippines.

It will be the largest EPSON manufacturing plant outside of Japan, employing approximately 20,000 Filipinos by 2017.

“I think the Philippines has one of the most competitive labor cost sin the region,” Toshimitsu Tanaka, Epson’s Philippines country manager said on their annual investors forum.

Tanaka said that China and Indonesia’s labor force is becoming more expensive.

“Based on the current situation, we have no plans to expand the China factory because of labor costs. China’s labor force very, very high by almost 20 percent (compared to the Philippines),” Tanaka said. “The Philippine labor cost is stable so we can predict salary.”

Aside from having a large and cheap labor force, the English proficiency of Filipinos is also a big advantage compared to Chinese and Indonesians, Tanaka added.

According to a Singaporean Think Tank, Epson’s move to divert its investments from China to the Philippines is a sign that Japanese investors are more eager to put their money on allied nations of Japan. As China and Japan are locked on a bitter feud in the Senkaku islands.