Page 146 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
2.2 Manufacturing
Background force advantage. This has created a race against the clock
for China as it attempts to move its industry up the value
China is concerned about the loss of low-end chain. Multiple challenges have to be overcome in a short
manufactures to other countries so it amount of time for China. The Ministry of Industry and
is offering incentives for these manufactures to move to Information Technology drafted the plans of more than
lower-cost areas of China. At the same time the country two years with the input from 150 experts from the China
raises wages and creates consumer demand by developing Academy of Engineering. According to Scott Kennedy,
more high-tech manufacturing. This is a difficult high wire Deputy Director of the Freeman Chair in China Studies at
to cross for policy makers who are trying to keep wages from the Center for Strategic and International Studies, Made
rising so fast that they undermine competitiveness for one in China 2025 has clear principles, goals, tools and sector
type of factory worker while seeking to promote another focus. Its guiding principles are to have manufacturing
in order to create a consumer-driven economy. World Bank be innovation-driven, emphasize quality over quantity,
Economist Karlis Smits says China has managed to hold on achieve green development, optimize the structure
to low-end industries far longer than its Asian counterparts of Chinese industry and nurture human talent, and
at a similar stage of development. Government incentives comprehensively upgrade to the highest parts of global
and subsidies, a large domestic market, and good production chains. The plan identifies the goals of raising
infrastructure have encouraged companies to remain in domestic content of core components and materials to
country. The central government has offered a range of 40 percent by 2020 and 70 percent by 2025. Although
incentives for manufactures to relocate to cities in western there is a significant role for the state in providing an
and central China, where wages are as much as 30 percent overall framework, utilizing financial and fiscal tools, and
lower than eastern provinces, to contain the loss of supporting the creation of manufacturing innovation
industries to other countries. For example, Xinjiang Uygur centers (15 by 2020 and 40 by 2025), the plan also calls for
Autonomous Region, a major cotton-growing region, has relying on market institutions, strengthening intellectual
budgeted 20 billion yuan in tax benefits, rent, and power property rights protection for small and medium-sized
subsidies to attract textile and apparel companies. Deputy enterprises and more effective use of intellectual property
General Manager of Flying Eagle Textile Co Hu Yiteng is in business strategy, and allowing firms to self-declare
considering the offer. Hu said, “The country is doing crazy their own technology standards and help them better
things to support Xinjiang and the textile industry. It’s participate in international standard setting (Kennedy).
near-guaranteed profit” (Magnier).
Since more than three decades of China’s “one-child”
China has become an export machine that is dwindling China’s pool of inexpensive labor, Beijing is
manufactures what now appears to be an ever-increasing urgently looking for ways of designing its own products
share of the world’s products. Its initial success exporting rather than just manufacturing someone else’s. They want
in the 1990s surged after it joined the World Trade to go from making iPhones to inventing them. China’s
Organization in 2001 and surprised everyone including high-tech output is nearing that of the United States, and
Chinese policymakers. The result was a rapid growth of the country is committed to increasingly large portions
over 9 percent for several years. China surpassed the U.S. as of its wealth to research and development. A huge jump
the largest economy in terms of purchasing power in 2014. in Chinese engineering graduates suggests it may soon
The Chinese government has implemented economic have a chance (Wertime). The Made in China 2025 plan,
restructuring with the Made in China 2025 strategy, a endorsed by Premier Li Keqiang, “is the country’s first
comprehensive and ambitious industrial plan to upgrade action plan focusing on promoting manufacturing”. Party
the nation’s manufacturing. Countries such as Vietnam officials want China to become known as a leader in
and Indonesia are beginning to erode China’s cheap labor manufacturing innovative technologies, or in Li’s words,
146
2.2 Manufacturing
Background force advantage. This has created a race against the clock
for China as it attempts to move its industry up the value
China is concerned about the loss of low-end chain. Multiple challenges have to be overcome in a short
manufactures to other countries so it amount of time for China. The Ministry of Industry and
is offering incentives for these manufactures to move to Information Technology drafted the plans of more than
lower-cost areas of China. At the same time the country two years with the input from 150 experts from the China
raises wages and creates consumer demand by developing Academy of Engineering. According to Scott Kennedy,
more high-tech manufacturing. This is a difficult high wire Deputy Director of the Freeman Chair in China Studies at
to cross for policy makers who are trying to keep wages from the Center for Strategic and International Studies, Made
rising so fast that they undermine competitiveness for one in China 2025 has clear principles, goals, tools and sector
type of factory worker while seeking to promote another focus. Its guiding principles are to have manufacturing
in order to create a consumer-driven economy. World Bank be innovation-driven, emphasize quality over quantity,
Economist Karlis Smits says China has managed to hold on achieve green development, optimize the structure
to low-end industries far longer than its Asian counterparts of Chinese industry and nurture human talent, and
at a similar stage of development. Government incentives comprehensively upgrade to the highest parts of global
and subsidies, a large domestic market, and good production chains. The plan identifies the goals of raising
infrastructure have encouraged companies to remain in domestic content of core components and materials to
country. The central government has offered a range of 40 percent by 2020 and 70 percent by 2025. Although
incentives for manufactures to relocate to cities in western there is a significant role for the state in providing an
and central China, where wages are as much as 30 percent overall framework, utilizing financial and fiscal tools, and
lower than eastern provinces, to contain the loss of supporting the creation of manufacturing innovation
industries to other countries. For example, Xinjiang Uygur centers (15 by 2020 and 40 by 2025), the plan also calls for
Autonomous Region, a major cotton-growing region, has relying on market institutions, strengthening intellectual
budgeted 20 billion yuan in tax benefits, rent, and power property rights protection for small and medium-sized
subsidies to attract textile and apparel companies. Deputy enterprises and more effective use of intellectual property
General Manager of Flying Eagle Textile Co Hu Yiteng is in business strategy, and allowing firms to self-declare
considering the offer. Hu said, “The country is doing crazy their own technology standards and help them better
things to support Xinjiang and the textile industry. It’s participate in international standard setting (Kennedy).
near-guaranteed profit” (Magnier).
Since more than three decades of China’s “one-child”
China has become an export machine that is dwindling China’s pool of inexpensive labor, Beijing is
manufactures what now appears to be an ever-increasing urgently looking for ways of designing its own products
share of the world’s products. Its initial success exporting rather than just manufacturing someone else’s. They want
in the 1990s surged after it joined the World Trade to go from making iPhones to inventing them. China’s
Organization in 2001 and surprised everyone including high-tech output is nearing that of the United States, and
Chinese policymakers. The result was a rapid growth of the country is committed to increasingly large portions
over 9 percent for several years. China surpassed the U.S. as of its wealth to research and development. A huge jump
the largest economy in terms of purchasing power in 2014. in Chinese engineering graduates suggests it may soon
The Chinese government has implemented economic have a chance (Wertime). The Made in China 2025 plan,
restructuring with the Made in China 2025 strategy, a endorsed by Premier Li Keqiang, “is the country’s first
comprehensive and ambitious industrial plan to upgrade action plan focusing on promoting manufacturing”. Party
the nation’s manufacturing. Countries such as Vietnam officials want China to become known as a leader in
and Indonesia are beginning to erode China’s cheap labor manufacturing innovative technologies, or in Li’s words,
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