China's dominance of manufacturing is growing, not shrinking, gaining market share in both low- and high-tech sectors

[beijingwalker]

Hacker spreading fake news? Hmm seems credible .

but you are the unrivaled world champaign in this field

 

[Nan Yang]

Energy prices in Europe are so high, and interest rates in the USA are so high. It is normal for the manufacturing industry to move to China.

Labor intensive enterprises may go to Southeast Asia, especially Vietnam and Cambodia.

Because of “massively increased costs”: toilet paper manufacturer Hakle files for bankruptcy​

By Daniel
September 5, 2022

The toilet paper manufacturer Hakle is insolvent. The reasons given were the increased raw material and energy prices as well as the high transport costs.

The company complained that the “massively increased costs for material and energy procurement as well as transport” could not be passed on to customers in the food retail and drugstore sectors to a sufficient extent.


LOL. Its probably cheaper to import from China.

 

[Chat SAMOSA]

China's dominance of manufacturing is growing, not shrinking​

Country gaining market share in both low- and high-tech sectors
William Bratton
September 9, 2022 05:00 JST

When it comes to discussions about China's manufacturing capabilities, there is an all-too-frequent disconnect between rhetoric and reality.

On the one hand, it is widely understood that Chinese producers are losing relative competitiveness. Higher labor costs, bitter trade frictions, rising geopolitical tensions and the domestic pursuit of zero-COVID are all encouraging exporters to leave the country.

China, it is thus argued, has passed "peak manufacturing" and its status as the world's manufacturer stands to be superseded by other countries in the region. By extension, this will materially impact China's economic trajectory and the region's evolving geopolitical balances.

On the other hand, there has been a lack of substantive evidence offered to support the above argument. Although anecdotes abound about certain companies relocating production out of China, the data suggests that such moves are not at the scale necessary to reverse the upward momentum of the country's manufacturing base, nor its international competitiveness.

The most obvious evidence of this is in trade flows.

It is not just that Chinese exports have remained remarkably robust despite COVID-related lockdowns. More than that, the latest numbers from the U.N. Conference on Trade and Development imply that Chinese producers have become more competitive in recent years, not less.

China's manufactured exports, for example, have been growing significantly faster than those of Germany, the U.S., Japan or South Korea. As a result, its share of global manufactured exports by value surged to a new high of 21% last year, compared to just 17% in 2017. The country is now a more important international supplier than Germany, the U.S. and Japan combined.

Furthermore, contrary to the view that supply chains are reducing their exposure to China, Chinese manufacturers have consolidated their primacy across the vast majority of sectors over recent years. In fact, what is particularly remarkable about China's evolving trade structure is that it has been able to simultaneously gain export share in both low- and high-technology industries, including those as eclectic as leather products, truck trailers and optical instruments.

Such gains are hardly indicative of an industrial base under stress. They instead highlight the hyper-competitiveness of China's producers, who increasingly dominate the East and Southeast Asian manufacturing landscape.

For all the chatter about companies leaving China and the changing geographies of supply chains, the reality is that it generated nearly half of the region's manufactured exports in 2021, compared to less than a third 15 years ago.

This competitiveness is derived from the complex and self-reinforcing interaction of multiple factors, many of which are a function of China's size. This allows the country to support far higher levels of domestic competition, innovation and specialization than its neighbors, and results in greater efficiencies and lower production costs, which regional rivals will always struggle to replicate. These scale benefits are subsequently magnified through aggressive industrial development policies that have no obvious precedent in terms of scope or ambition.

So China's manufacturing advantages must be viewed holistically, especially as it can be highly misleading, however tempting, to draw conclusions based on the trends of any specific factor.

The country's rapidly rising wages, for example, attract much attention. But it would be a mistake to assume that this signals the loss of competitiveness in more labor-intensive industries.

Rather, it reflects dramatic improvements in productivity and a broader structural shift into higher technology sectors. Furthermore, the use of national averages masks the diversity of China's labor force, with a substantial pool still on relatively low wages.

This is seen in the irrefutable fact that the country's manufacturers are still gaining export share across low-technology and labor-intensive industries, including textiles. In other words, their innate advantages are so substantial and so overwhelming that higher labor costs by themselves have no material impact on their competitiveness.

As such, despite all the frequently cited anecdotes, there is no real evidence that the factors underpinning China's competitiveness are being reversed. Rather, Asia's manufacturing industries will continue to concentrate in China, further entrenching its status as the core of the region's economic system.

This is the challenge for the rest of the region. No matter how hard they try, few countries, if any, will be able to replicate or match China's natural advantages. And this will have profound longer-term economic and geopolitical consequences.

Against the onslaught of highly competitive Chinese products, emerging economies will struggle to develop the manufacturing sectors they need to achieve and sustain productivity-led growth over the long-term.

But even more advanced nations are not immune from the pressures created by China, with the hollowing-out of their industrial structures a very real danger. The displacement of Japanese and South Korean manufacturers from the global telecommunications equipment and shipbuilding markets demonstrates just how quickly China can engage with its neighbors at their own games -- and win.

So for all the suggestions that China's grip on manufacturing is weakening, the reality could not be more different. It is not the Chinese producers that are losing influence, but their rivals across the region.

In fact, the natural forces driving the country's competitive advantages are now both so substantial and entrenched that the rest of Asia is seemingly engaged in an unfair trade fight -- and one it is unlikely to win. The region's slide toward a clearly defined economic core-periphery structure -- with China dominating and the rest being disadvantaged -- now looks inevitable.

In turn, this is creating dependencies which will prove evermore difficult to disentangle, no matter how strong the apparent political commitment in some countries to do so.

This is seen in how recent attempts to diversify imports away from Chinese producers have been constrained by the lack of credible alternative suppliers. It is noticeable that Australia and India, countries positioning themselves as regional rivals to China, have increased -- not reduced -- their reliance on Chinese manufactured imports over the last three years.

It is true that this manufacturing mastery may not have been developed as a deliberate geopolitical tool. But in the same way the U.S. was able to use its post-World War II industrial leadership to advance its own interests, the reliance on Chinese products will naturally give Beijing unrivaled power and influence within Asia. As such, China's future economic and political dominance of the Asian regional economy is set to be underpinned by its vibrant, dynamic and hypercompetitive manufacturing industries, whatever the country's doomsayers may claim.

China's dominance of manufacturing is growing, not shrinking

Country gaining market share in both low- and high-tech sectors

asia.nikkei.com

This is a fair statement. The Americans don't have the inclination, Indians don't have the discipline and the Europeans don't have the scale. China and few SEA countries will have to continue being the global manufacturers.

 

[beijingwalker]

For the sake of employment, China can not easily give up all her low end manufacturing, even her high end sector has already reached a high level.

 

[beijingwalker]

Good opportunity to make money, Chinese factory churns out British flags after queen's death
Ninety minutes after Queen Elizabeth II died, orders for thousands of British flags started to flood into a factory south of Shanghai
By The Associated Press
September 17, 2022, 8:22 PM

General manager Fan Aiping holds up one of the flag with the Queen's image at the Shaoxing Chuangdong Tour Articles Co. factory in Shaoxing, in eastern China's Zhejiang province, Friday, Sept. 16, 2022. Ninety minutes after Queen Elizabeth II died, orde...Show more

The Associated Press

“There is a business opportunity behind every news event,”

SHAOXING, China -- Ninety minutes after Queen Elizabeth II died, orders for thousands of British flags started to flood into a factory south of Shanghai.

More than 100 employees at Shaoxing Chuangdong Tour Articles Co. set aside other work and put in 14-hour days starting at 7:30 a.m. making nothing but British-themed flags.

They turned out at least 500,000 the first week, according to general manager Fan Aiping.

Some are British flags to be carried by mourners or hung outside homes. Others show Elizabeth’s portrait and the years of her birth and death. They range in size from 21 to 150 centimeters (8 to 59 inches) wide and sell for 7 yuan ($1).

The first customer sent an order at 3 a.m. Chinese time for tens of thousands, according to Fan. She said 20,000 the factory had in stock were sent out that morning.

“The customer came to our factory directly to grab the products,” Fan said. “Many of the flags weren’t even packaged. They were put in a box and shipped away.”

The factory had been making flags for the football World Cup before Elizabeth’s death.

Chuangdong has been in the industry since 2005 and produces flags for the World Cup and other sports events or national day celebrations. It also makes sports-themed scarves and banners.

Employees pay attention to news for events that might bring in orders.

“There is a business opportunity behind every news event,” Fan said.

Ni Guozhen, an employee since 2005, said she has learned about the world through her work.

“I’ve learned a lot about current events,” said Ni, who was sewing flags with the queen’s portrait. "My knowledge has grown. Therefore I’m proud and happy that I’m making flags.”

Ni remembers filling orders for British-themed flags for a royal wedding.

“There is a story behind each flag,” Fan said. “This time it’s about the queen in the United Kingdom. They are buying these flags to mourn the queen deeply.”

Chinese factory churns out British flags after queen's death

Ninety minutes after Queen Elizabeth II died, orders for thousands of British flags started to flood into a factory south of Shanghai

abcnews.go.com