Made In China Not Anymore
Adela CHMELOVA Erasmus students Universite d’Auvergne
Ioana NISTOR 2014-2015 Economics
Made in China…not anymore?
Summary: China is falling behind in the global manufacturing race as rising wages and energy costs put pressure on the Asian country, synonymous with making super cheap stuff. According to new data released, China is among several economies whose manufacturing price advantage over the U.S. is eroding. In the main time moderate wage growth and lower energy prices are making the U.S. and Mexico more desirable manufacturing destinations. More U.S. businesses are likely to produce goods closer to home in the coming years. As labor costs in the "world 's factory" continue to rise dramatically, global fashion brands are looking elsewhere to source apparel. China will shed approximately 85 million manufacturing jobs in the coming years which could be a golden opportunity for economic development for new players like: Myanmar, Haiti and Ethiopia, among others, who are looking to rejuvenate a once-thriving trade or even build one entirely from scratch. Recently released figures showed the wider Chinese economy growing at its slowest pace for more than five years. It showed that factory output contracted in November for the first time in six months. To ensure enough jobs are created for China 's huge and increasingly-educated population, the government aims to achieve 7.5% economic growth in 2015, although many analysts believe it will struggle to meet this target. There is speculation it may take further steps to boost growth: "We still see uncertainties in the months ahead from the property market and on the export front [and] we think more monetary and fiscal easing measures should be deployed" - Hongbin Qu, Chief China economist.
Brief summary: It used to be a simple rule: Manufacturing is cheaper in Asia, but it 's fundamentally changed. We see China as getting much more expensive: it is 4 percent less
Ioana NISTOR 2014-2015 Economics
Made in China…not anymore?
Summary: China is falling behind in the global manufacturing race as rising wages and energy costs put pressure on the Asian country, synonymous with making super cheap stuff. According to new data released, China is among several economies whose manufacturing price advantage over the U.S. is eroding. In the main time moderate wage growth and lower energy prices are making the U.S. and Mexico more desirable manufacturing destinations. More U.S. businesses are likely to produce goods closer to home in the coming years. As labor costs in the "world 's factory" continue to rise dramatically, global fashion brands are looking elsewhere to source apparel. China will shed approximately 85 million manufacturing jobs in the coming years which could be a golden opportunity for economic development for new players like: Myanmar, Haiti and Ethiopia, among others, who are looking to rejuvenate a once-thriving trade or even build one entirely from scratch. Recently released figures showed the wider Chinese economy growing at its slowest pace for more than five years. It showed that factory output contracted in November for the first time in six months. To ensure enough jobs are created for China 's huge and increasingly-educated population, the government aims to achieve 7.5% economic growth in 2015, although many analysts believe it will struggle to meet this target. There is speculation it may take further steps to boost growth: "We still see uncertainties in the months ahead from the property market and on the export front [and] we think more monetary and fiscal easing measures should be deployed" - Hongbin Qu, Chief China economist.
Brief summary: It used to be a simple rule: Manufacturing is cheaper in Asia, but it 's fundamentally changed. We see China as getting much more expensive: it is 4 percent less
References: Heesun Wee, “Why the 'Made in China ' model is weakening”, 19 Aug 2014, http://www.cnbc.com/id/101920959 [ref. of 25 november 2014].. Nathan Siegel, “Not Made in China”, 2014, http://www.ozy.com/fast-forward/guilt-free-fashion/31106 [ref. of 25 november 2014]. Martin Patience, “China manufacturing growth slows, PMI survey suggests”, 2 November 2014, http://www.bbc.com/news/business-29870588 [ref. of 25 november 2014]. It used to be a simple rule: “Manufacturing is cheaper in Asia, but it 's fundamentallychanged”. We see China as getting much more expensive, and is falling behind in the global manufacturing race as rising wages and energy costs put pressure on the Asian country, synonymous with making super cheap stuff.