Manufacturing remains China’s bedrock

3gzylon 2015-04-04

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By Ding Gang (Global Times) 10:18, April 02, 2015

　　Illustration: Liu Rui/GT

About 20 years ago, I did a random survey of China-made crochet tablecloth in Paris. A French businessman told me that when a new tablecloth became popular in Paris, someone would photocopy the pattern and sent it to manufacturers in China. In just a month's time, tablecloths of the same pattern made in China would be present in the French market.

Now, most crochet tablecloths in European and American markets are made in Vietnam or India. In Brazil, where I am now stationed, this kind of tablecloth is usually produced in Peru.

However, although the tag of "made in China" is rarely seen on tablecloths, the adaptability of Chinese manufacturers still continues. For instance, right now, a lot of Chinese producers are aiming at the growing demand for selfie sticks.

Like 20 years ago, Chinese manufacturers are responding quickly to the international market climate, sticking to the simple principle that "we produce whatever sells well."

With the ease of modern communication and transportation, "made in China" has knocked down the barrier of distance. Buyers and customers across the whole world can have easy access to whatever they want.

Speed always triggers innovation. In the past, many made-in-China products were equivalents of certified ones. But now, some Chinese products have started to lead the trends. For example, accessories of smartphones not only inspired people's demand for smartphones, but also help the functions of smartphones improve.

And since China can keep up with the trends, its acute responsiveness has also enriched the catalogues of Chinese products, and improved the productivity of Chinese manufacturers.

China has been following global trends for decades, and its efforts have paid off. Now, China has boasted a full range of industrial sectors with strong comprehensive capacity.

But some critics think China's "copying strategy" will ruin its chances of getting a share of the high-end of the value chain. But they have neglected the nature of manufacturing, which is to correspond with the needs of the market.

Be the goods sold in developing countries or developed countries, most consumers are from the low-income and middle-income families.

Cost performance matters the most. Only low-priced and high-quality products can gain popularity.

Chinese manufacturers have to comply with the market if they want their products to be sold at a more profitable price. Only when customers are willing to pay more for their goods and services can they re-adjust the prices. Otherwise they endanger their business.

China's solid foundation in manufacturing gives the country confidence to go through this round of economic transformation. Unlike many emerging economies that are bogged down in the mire of economic recession, China's manufacturing is still on an upward trajectory.

According to the new statistics released by the World Bank, China's manufacturing industry accounts for 32 percent of its GDP in 2013. It only accounts for 12 to 13 percent in Brazil, India and South Africa, which are also BRICS members.

In 2011, the Indian government anticipated that the proportion of manufacturing industry would increase from 16 percent to 25 percent, but now, this industry is shrinking. India's service industry makes up two thirds of its national economy, so it will be a huge setback if it wants to invigorate its manufacturing industry.

The revitalization of manufacturing industry won't be easy for India. The traditional model of original equipment manufacture has been given the cold shoulder for low profitability. But meanwhile, it does not have sufficient and qualified labor force and technologies to support the production of high-end goods.

Although China's economic structure requires an increased proportion of service industry, it cannot be achieved at the cost of the manufacturing industry.

We need to transfer excessive labor force, removed from some unsustainable manufacturing industries, to the service industry. But in some disadvantaged areas, the manufacturing industry needs to be expanded because it is the major contributor to China's relief of its 80 million people who still live in absolute poverty.

The author is a senior editor with People's Daily. He is now stationed in Brazil. dinggang@globaltimes.com.cn. Follow him on Twitter at @dinggangchina

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