How Does "Made In China" Come To Life?

"Made in China" has won the reputation of "the world factory" for China. In March 1979, the Economist magazine boldly predicted that "although China needs a large amount of imports, it will stimulate exports from the developed countries, but in the long run, the export of Chinese products will become inevitable."

After nearly 20 years of lack, China just woke up from the craze of revolution, and everything was recovering and sprouting, including manufacturing.

That year, China made 334 million sacks, 850 million incandescent bulbs, 186 thousand motorcycles and 1 million 300 thousand televisions.

No one can imagine that 30 years later, the prophecy will come true.

Since 1990s, China's exports have continued to grow, and become a strong driving force for China's economic growth.

Over the past three years, net exports have contributed more than 40% to GDP.

China's production of color TV, refrigerators, washing machines, microwave ovens, motorcycles, photocopiers, mobile phones and clothing, footwear and other products in the global market share ranks first.

In the first half of this year, China's trade import and export value reached a new high, reaching 795 billion 740 million US dollars, an increase of 23.4% over the same period last year and a trade surplus of US $61 billion 440 million.

Nowadays, "made in China" not only occupies an important position in the national economy, but also is popular all over the world, and has won the reputation of "world factory" for China internationally: the added value of manufacturing industry accounts for 78% of China's gross industrial product, occupying 82%, contributing 40% gross domestic product and 50% annual revenue, and 80% of foreign trade exports from manufacturing industry.

On the regional structure, "made in China" has formed the three world-class manufacturing centers in the Gulf of Bohai, the Yangtze River Delta and the Pearl River Delta. The three regions have created 66% of the industrial output value of the whole country less than 35% of the country's population and 10% of the total land area.

According to the statistics of the United Nations Industrial Development Organization, China's manufacturing industry, including energy, chemicals, building materials, textiles, household appliances, electronics and more than a dozen industries, has ranked first in the world.

As "the world factory", "made in China" has gradually become a worldwide label.

However, among the 100 famous brands in the world, the "made in China" brand that can be heard in the world is rare, while the famous brands of manufacturing power, the United States, Japan and Germany account for 2/3 of the world's famous brands.

No country in the world can become the center of manufacturing in the world only by subcontracting for others. Nor does a world manufacturing center do not own its own world-class brand.

However, most of China's enterprises are still working on world class brands and are struggling with price wars.

The large profits of China's processing trade flow into the hands of foreign brands and sellers.

This "China's manufacturing" mode of "two ends" and "three to one subsidy" is bound to withstand the test of wind and waves.

In the era of high cost, "made in China" is facing the throes of pformation. 30 years ago, China's manufacturing industry took advantage of the low cost advantage, and this advantage did not exist in the new round of international industrial pfer.

Rising costs, exchange rate changes, policy adjustments, the US subprime mortgage crisis and trade barriers and other factors have brought heavy pressure to Chinese manufacturing enterprises.

Since 2007, the cost of "made in China" has obviously increased.

First, the direct production cost of energy and raw materials, land prices, labor and so on is getting higher and higher, and land prices and house prices in many places are rising too fast.

Since the beginning of this year, China's producer price index (PPI) of industrial products has hit a new high in 3 years, and 1-6, not 6.1%, 6.6%, 8%, 8.1%, 8.2% and 8.8% in July.

Foreign media said that China's rapidly growing economy was built on seemingly inexhaustible cheap labor force.

7.5 Hongkong manufacturing industries built factories in the Pearl River Delta, aiming to use cheap labour and land.

Over the past 30 years, tens of millions of migrant workers have poured into factories in the Pearl River Delta.

Now, the labor cost of manufacturing in the Pearl River Delta is rising.

Two, the indirect cost of environmental protection, pportation and so on is rising obviously, especially the continuous rise of international crude oil prices, which obviously pushed up the pportation cost of manufacturing enterprises.

The continued appreciation of the renminbi and the weakening of support for export tax rebate policy are even worse for the manufacturing sector.

The "made in China", which once won a place in the international market at a low price, is suffering from the increasingly heavy pressure of RMB appreciation.

Since July 21, 2005, China has initiated the reform of the RMB exchange rate formation mechanism and implemented a floating floating exchange rate system based on market supply and demand and reference to a basket of currencies. The central parity of the RMB against the US dollar has appreciated by more than 18% since then.

The Ministry of Commerce has just completed the survey commissioned by the State Council, which shows that the appreciation of RMB has become an unbearable burden for Chinese export enterprises.

The latest figures show that China's export surplus has declined for 4 consecutive months.

At the same time, the government reduced the export tax rebate rate, raised the minimum wage and the anti pollution regulations came into effect and other factors eroded the profits of enterprises, making a large number of manufacturing enterprises relying solely on low cost survive because of losing the price competitiveness and being eliminated by the market.

Taking the Pearl River Delta region as an example, the region has imported low-priced goods for the US market for many years, and now the clothing industry cost is expected to increase by 8% in the first half of 2009.

The Pearl River Delta, which once dominated the Chinese economic landscape for many years, is facing huge cost pressures.

Not only the enterprises in the Pearl River Delta, Shanghai and Yangtze river basins are facing the pressure of rising costs.

At the same time, enterprises in the Yangtze River Delta region are also facing a shortage of labor force.

According to foreign media reports, India is likely to replace China as a global manufacturing center in the next 35 years as China's manufacturing costs are higher and higher.

According to the survey, by investigating the more than 340 largest multinational manufacturing companies in Europe, the Americas and the Asia Pacific region, China is currently the first choice for manufacturing outsourcing in western enterprises, and India is the preferred outsourcing site for IT, finance and customer service.

But compared with other countries such as India, China's manufacturing costs are getting higher and higher.

China's manufacturing industry has entered the era of high cost, which is an unavoidable way, and it will also be passed sooner or later.

The cost crisis of "made in China" how to regenerate the fire will weaken the competitiveness of China's manufacturing industry, but it will not hinder China's becoming the world's manufacturing center.

Recently, the State Council held a executive meeting calling for the Yangtze River Delta to accelerate the readjustment of its industrial structure, and strive to form an industrial structure dominated by modern services.

We should promote the upgrading and upgrading of industrial structure and strive to build an international advanced manufacturing base. "

This is the requirement and expectation of China's manufacturing pformation and upgrading at the national level.

It is also reported that the new value-added tax plan, which is related to the scale of tax reduction, drawn up by the Ministry of finance, has been submitted to the State Council for 150 billion.

If there is no accident, the new scheme will be implemented in January 1, 2009.

The promotion of VAT reform in the whole country will have a very positive impact on the manufacturing industry, especially the technology intensive enterprises.

This will further accelerate the upgrading and pformation of "made in China".

In the long run, a relatively economically independent country or region must have a strong industrial base with manufacturing as its main body.

Since the 80s of last century, the manufacturing industry of China's Hongkong moved rapidly northward in the context of China's reform and opening up. In just over a decade, Hongkong has evolved from a processing and manufacturing center to a business and service center in the Asia Pacific region, forming an irrational economic structure with a weakening manufacturing industry and a unique service industry.

As a result, the economic structure of this vulnerability has been exposed in the attack of the Asian financial crisis ten years ago.

China's economy can not take the old economic road of Hongkong.

It can be seen that the manufacturing industry will still be a strategic need for China's sustained economic development in a longer period.

Although "made in China" is faced with many difficulties and unfavorable factors, we should firmly believe that China is still one of the best development areas of manufacturing.

The situation of China's rapid economic growth will not change much. There will still be huge room for manufacturing demand. Manufacturing industry in China can still enjoy demographic dividends, especially high-quality talent dividends.

In addition, the information revolution that occurred in the 20 years after twentieth Century has brought about the global flow of real factors, which has greatly reduced the barriers for Chinese enterprises to enter the world competition, and also brought the hope of "made in China" to a new lease of life.

To realize the rebirth of "made in China", we need to do the following work well: first, from low cost to independent innovation.

Through policy guidance, technological innovation and brand management, China's manufacturing industry should develop in the direction of high value added in the industrial chain, from labor-intensive to technology intensive and capital intensive, from original equipment manufacturers to original design manufacturers and independent brand manufacturers, and form the "China advantage" based on independent innovation.

The mode of production should be changed from relying mainly on capital and material elements to relying mainly on scientific and technological progress and human capital.

We must rely on global technological standards to move from "made in China" to "made in China".

It is necessary to establish a technological innovation system with enterprise as the main body, market orientation as well as production, teaching and research.

In recent years, China has formed a group of excellent enterprises with independent brand names represented by HUAWEI and Haier, but in general, the innovation ability of our enterprises is not strong enough.

We must establish a strong sense of independent innovation and place innovation in the most important position of enterprise strategy.

We should accelerate the construction of a modern enterprise system, form a sound and effective incentive mechanism for innovation, and enhance the internal driving force of enterprises' independent innovation.

At the same time, we must invest in all aspects of the enterprise resources to focus on innovation, establish a sound R & D institutions, and increase investment in new technology and new product research and development.

To play a leading role in independent innovation, enterprises must rely on their own efforts and support from the government and all sectors of society.

The two is to tap the value of the domestic market.

In the global market, multinationals have basically divided the mainstream markets of developed countries with strong brand advantages.

In emerging markets, the Chinese market has become a new battleground.

However, the special two dollar structure and early access restrictions in the Chinese market make the huge Chinese market still in the ascendant stage of development.

In this respect, local enterprises who are well versed in the rules of China's market competition have certain advantages.

Lenovo, TCL, Haier and other excellent local enterprises in the establishment of the domestic market position, are also relying on unique and competitive channel construction strategy, to enhance the market brand awareness and market share.

The booming Chinese market is still an important strategic resource for local manufacturing enterprises.

Chinese enterprises should seek the most effective market breakthroughs from the industrial chain instead of the pure manufacturing link, and enhance the effective control of the manufacturing enterprises to the local market, and then enhance the brand value, income level and profitability. Relying on the local market which has not been divided by the multinational companies as a lever to leverage the whole world, we should find a breakthrough for the local enterprises from the whole industrial chain (such as downstream channels); improve the income level and profitability of the enterprises by enhancing the end-to-end integration force in the industrial chain, and enlarge the competitive advantage by leverage the leverage effect of the capital market.

This competition strategy is a realistic strategic choice to gradually enhance the competitive position of Chinese local manufacturing enterprises in the global industry.

Three is to enhance product quality and brand awareness.

The decline in prestige of "made in China" not only threatens China's own economy, but also threatens western enterprises that import Chinese goods.

The loss of trust in Chinese goods may also bring about the global trading system.