Chicago Tribune: Is China's manufacturing era coming to an end?

by:JIYALI     2021-08-09
American 'Chicago Tribune' article on March 4, original title: Research shows that China’s competitiveness is in danger. A survey released this Tuesday showed that China will soon lose its manufacturing competitiveness in certain industries. Chinese companies Need to improve its own business capabilities to maintain profitability.   At the time when the survey was launched, there were reports that many domestic and foreign manufacturers have shifted their business to the mainland or other countries due to labor costs and other costs in coastal areas that greatly reduced their profits.   This survey of China's manufacturing competitiveness conducted by the American Chamber of Commerce in Shanghai shows that more than half of 66 foreign companies believe that China is losing its competitive advantage over other low-cost countries such as Vietnam and India. The Chinese manufacturing era is coming to an end. Ted Hornby, chairman of the Shanghai Manufacturing Committee of the American Chamber of Commerce, said that it can no longer be regarded as a manufacturing workshop.   According to the report, these companies surveyed, mostly located in the surrounding areas of Shanghai in eastern China, said that wages increased by an average of 9 to 10 percentage points each year, and the cost of raw materials increased by 7 percentage points. But companies can do more to improve their business to respond to these trends, said Ron Haddock, global vice president of Booz Allen Hamilton, which conducted the survey, that China’s competitiveness Faced with danger, the question is what we can do. Many low-cost manufacturers of cheap goods such as shoes, clothing and toys have shifted their production to inland areas of China where wages and other costs are lower, or other developing countries. He Degao said that the survey results show that many Manufacturers can actually promote profit growth by improving management. If companies do not improve their management methods, we think this will make their situation worse. (Translated by Lei Zhihua)    German 'Frankfurt Review' article reported on March 5, original title: China will become expensive   Female workers repeat monotonous actions on the production line. There are thousands of factories producing cheap products in Shenzhen. The hourly wage of female workers is only 4.5 yuan, and some are even lower, only 3 yuan. But such wages are still too high for some factory owners, who moved their factories to Vietnam, Indonesia and other Asian countries with lower wages.   For a long time, made in China has been synonymous with cheap products: most consumer goods in the United States and Europe are imported from China. Computers, bedding, jeans, etc., seem to have nothing that China does not export. China's cheap labor and impeccable infrastructure have made China undisputedly a place where many cheap products are produced. But this era is coming to an end: China's rising wages and raw material costs, stricter environmental protection standards, dwindling tax incentives, and the appreciation of the yuan-to-dollar exchange rate have made more and more factory owners turn to other Asian countries. Production base.   The transfer of production is mostly based on business operations and other reasons, such as developing new markets and diversifying production risks. In most cases, production costs are a very important factor. For a long time, many American toy manufacturers have established production plants in Guangdong Province, and they expect prices to rise by 5% to 10% this year. The prices of labor-intensive industries such as textiles and entertainment electronics will also experience similar increases.   The American Chamber of Commerce survey reports that the increase in costs has weakened the competitiveness of Chinese companies. Increasing affluence and shortage of professionals have caused wages to increase by 10% to 15% every year. The new labor law has also increased cost pressures in Hong Kong and the Yangtze River Delta.  Many manufacturers have to move their factories to inland provinces where wages are relatively low. For many manufacturers, this is a difficult transition period. The representative of the European Union Chamber of Commerce in Beijing, Jog Uteke, explained that the transfer of production to poor western provinces is a good thing for China's overall development and is conducive to harmonious development. Uteke does not believe that China will lose its competitive advantage in cheap products. There are about 200 million labor surplus in China's interior. This huge group will continue to ensure that China will continue to be a producer of cheap products in the next 10 years.
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