Manufacturing News

China no longer simply 'world's factory'

China will be unable to protect is core interests and promote international cooperation without a strong manufacturing sector.

For China's manufacturing sector to climb to the higher end of the global value chain, the key is to unleash the power of innovation and achieve industrial transformation and upgrading.

The rapidly developing real economy is a key contributor to China's great national strength. Manufacturing has laid a solid foundation for China's national strength, and is crucial to the country's future firm standing at the center of the world stage.

The global financial crisis has reflected from the opposite perspective the importance of the real economy. The over-expansion of the virtual economy and its disconnection from the real economy is the main cause of the global financial crisis and subsequent prolonged global economic downturn.

Europeans have realized that Germany is able to stand firm in the storm thanks to its strong manufacturing sector.

The U.S. government is also making active efforts to revive manufacturing. Almost all developed countries have shifted their strategic focus back to the real economy.

As a result, China's manufacturing sector is sandwiched between increasing competitive pressure from the midstream and downstream industries of emerging economies in Southeast Asia and other regions as well as from the midstream and upstream industries of developed economies such as the United States, Germany, and Japan.

Despite some negative factors like rising exchange rate of the yuan against U.S. dollar and labor costs, there still are hopes in fierce competition. Some low-end industries moved out of China but they do not break away from China.

A recent report said that the CLP Holdings has newly established a coal-fired power plant in Haryana of India and all of the power generation equipment was made in Chinese Mainland. The CLP Holdings runs well in Asia-Pacific region in recent years and most of its power generation equipment used in both South Asia and Southeast Asia are purchased from China.

In some countries including Vietnam, Cambodia and Laos, the clothing industries receive orders from Europe and the United States but use the mechanical equipment and the technologies producing shell fabrics and garment accessories are from China.

These examples tell us that China has strong potential to enter the middle and upper manufacturing industry.

According to reports of economic research and consulting firms, China's manufacturing industry accounted for almost 20 percent off global manufacturing industry in 2010, surpassing the United States which reached 19 percent, and became the world's largest manufacturing superpower.

The outstanding advantages of Chinese manufacturing include the economic scale, technical level and infrastructure construction accumulated since the reform and opening up, and the spirit of innovation is its driving power.

With the expansion and deepening of economic globalization, more and more emerging countries joined the manufacturing sectors. Therefore, the capital is flowing to the regions and countries with low labor costs, which triggered fierce competition in the middle and lower reaches of the manufacturing sectors.

In addition to holding the lower reaches, China's manufacturing industry is facing the challenge of expanding to the middle and upper reaches through innovation.

The Russian economist Ivan Tselichtchev divided the global manufacturing chain into four parts in his best-selling book "China Versus the West." They are low-tech and labor-intensive manufacturing, low-end manufacturing with high-tech contents, low-end and diversified manufacturing and high-end manufacturing.

The products made in China have taken the lead in the first part. They are occupying the second and third parts and approaching the fourth part. Apparently, they are not important in the fourth part.

The problem of China's manufacturing entering the middle and upper reaches is also the focus of realizing economic restructuring and sustainable development.

The key to climb up the high end of the global industrial chain lies in stimulating the innovation, realizing industrial transformation and upgrading and walking from the "world factory" to "world brand."

Most Viewed in 24 Hours


Start a Digital Twin Journey from Engineering Simulation

Accenture releases survey of digital transformation

CIMC Reduces Unplanned Downtime by 30% with Greater Operational Insight from ThingWorx

Ansys Simulation Speeding up Autonomous Vehicles

  • Tel : 0086-27-87592219
  • Email :
  • Add: 3B1 International Business Center, No. 18 Jinronggang Road (No.4), East Lake High-tech Development Zone, Wuhan, Hubei, PRC. 430223
  • ICP Business License: 鄂B2-20030029-9
  • Copyright © e-works All Rights Reserved