China in the world still Competitive advantage with integrated
In recent years, China has been the world’s factory, but recently, a number of factors are changing. The question now is, with rising costs, coupled with the appreciation of the RMB against the U.S. dollar may be the global manufacturers, China is still competitive?
Some analysts have pointed out that the export of low value-added services will be forced to transfer elsewhere, and for the domestic market, the complexity of high value-added consumer products will face intense competition. In this context, one operating in China for manufacturing enterprises of the latest survey shows that these companies are fast learning how to change in this trend to continue to maintain their competitiveness.
Some of this year in China, uncertainty and conflicting events on the problem and did not help. Take for example high-tech sector, Google and the Chinese government tit for tat between the unpleasant, as well as “independent innovation” part of the strategy, China issued new regulations to require high-tech product sales business must include the China Intellectual Property, have made foreign companies uneasy.
However, analysts believe that there are many factors for multinational companies in China is still attractive. With some other conditions can provide low-cost countries, the Chinese have a unique comprehensive advantages: low cost, domestic market potential, supply chain, infrastructure and regulatory environment has become more perfect.
China is still attractive
Appeared in China in March for the first time since 2004, trade deficit, it seems unlikely in the near future make the renminbi to appreciate significantly. And this one-month deficit of $ 7,240,000,000 also shows that China’s domestic market is expanding rapidly. In consumer goods, the increase in auto imports in the top directory of import items, than in February when an increase of 170%.
China’s rapidly growing domestic market in terms of future prospects for many companies are very attractive. According to the U.S. Chamber of Commerce and management consultants BoozCompany recently published “China Manufacturing Competitiveness 2009-2010 survey”, in the 202 companies surveyed, nearly 83% said they would put China’s foremost business Power is the ability to provide products for the China market. The proportion of survey compared to 71% two years ago, a further increase.
In addition to the importance of the domestic market, the Chinese and some better than neighboring countries, some of the advantages of low cost, such as political stability. A few years ago, many companies are trying to hedge risks, to take the “one China, plus another State” strategy, that is, both in China and other neighboring countries and a lot of them choose to Thailand as a base of operations. However, the frequent political conflict there, the local businesses is undoubtedly bad news.
A stable currency has always been to help to improve the predictability of a great, easy to carry out the budget and reduce costs. Carried out two years ago, the same study found, the RMB exchange rate is the companies surveyed, the most concern. But then, the Chinese government’s policy has proved that these worries are unnecessary. In addition, the U.S. Chamber of Commerce study also found that “Chinese factories are still common practice in the implementation of innovative production of the initial stage, but in some neighboring low-cost countries, such a process is more a lack of technology and lean.”
U.S. consulting firm AT Kearney partner, Dr. Lin Lianyun industry experts said that China is another attractive factor is the “cluster effect.” China’s “big three” clusters were based on Shanghai as the center of the Yangtze River Delta from Hong Kong to Guangzhou, the Pearl River Delta, and in Beijing and neighboring Tianjin as the center of the Bohai Bay area. In these areas, companies can access to “skilled labor, experienced local management personnel, raw materials and component supply, and improved infrastructure.” Dr. Lin Lianyun said, “If these four factors into account, and then look around Asia, including the sub-continent, you will find quite a number of countries is not a lack of this element is the lack of that element.”
Manpower
However, China’s economic growth continues and the most serious challenge facing the fight, and that is to attract and retain employees.
Economic crisis caused by the decline in export demand means that redundancy, the vigor of the labor market has cooled. But the end of 2009, as China’s economy to the good, the labor shortage again. JP Morgan “Global Data Outlook” shows that the fourth quarter of 2009, China’s major cities rose by more than the demand for labor supply growth, which is since the second quarter of 2008 for the first time less than demand. The result is that producers have to increase wages to attract workers.
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