Made In China?

In international media, one of the leading economic stories, in recent years, has been the slowing growth of the Chinese economy because manufacturing is going to other places.  Indeed, China’s GDP officially grew by only 7.4% in 2014, slipping from 7.7% in 2013. The main contributor to the Chinese GDP is manufacturing.  “Made in China” used to mean “low-cost labor stuff.”  China has now transformed itself and although fewer products may be made in China, they are still within the region and Chinese products will be slightly more expensive.

Chinese manufacture firms are using automation to raise productivity, offsetting some of the effect of higher wages—the idea behind the government’s new “Made in China 2025” strategy. It will have the new meaning of manufacture in China. China will train the workers and makes them become skilled workers but the “machine”. Manufacturing may no longer offer the employment or income gains that it once did. In the past export-led manufacturing offered a way for large numbers of unskilled workers to move from field to factory, transforming their productivity at a stroke. Now technological advances have led to fewer workers on factory floors. China and its neighbors may have been the last countries to be able to climb up the ladder of development simply by recruiting lots of unskilled people to make things cheaply. Exports still remain the surest path to success for emerging markets. Competing in global markets is the best way to boost productivity.