Made In China – The Journey of China manufacturing

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Made In China – The year: 1979. The Chinese government introduces ownership incentives for farmers, opens up coastal development zones, decentralizes policy making with relation to trade, and introduces a host of other free market reforms.

Trade and China

The year: 2006. Chinese exports have risen from $18 billion in 1980 to $969 billion in 2006, while imports have grown from $20 billion to $791 billion. In 2004, China surpasses Japan as the world’s third-largest trading economy. There’s a steep rise in China’s trade surplus from $24 billion in 2004, to $102 billion in 2005, to $178 billion in 2006. According to World Bank estimates, between 1981 and 2001, the economic reforms have helped more than 400 million Chinese to beat extreme poverty.

Most economists have attributed China’s growth to three main factors:

High savings or large accumulation of capital
Vast improvements in productivity resulting from economic reforms
Trade reforms and incentives that led to a surge in foreign direct investment (FDI), which has been a major source of China’s capital growth.

Chinese Goods: The Future

Made In China – The year: 2009. China is a net exporter in 22 sectors, with a surplus of more than $1 billion in about 17 sectors. China’s biggest surpluses include the following:

Computers and electronic products – $95 billion

Miscellaneous manufactures -$33 billion
Apparel – $26 billion
Leather – $18 billion
Electrical equipment and appliances – $17 billion

From the break up, it’s obvious that China exports high-value items such as computers and electronic equipment as well as low-value items such as leather and apparel. Many high-end products are produced and assembled in China by western companies as joint ventures with local firms. Very often, others are designed and built by Chinese companies themselves.

Today, products made in China, right from clothing to domestic appliances, computer equipment and peripherals account for a substantial part of items bought by American households and firms. China’s manufacturing system has now become integral to the availability of cheap consumer goods and business equipment throughout the western world. In addition to the above mentioned, China is the largest exporter of glass products as well—about 12.25% of its exports are glass items. Most of these products are exported to Japan, Germany, U.S., U.A.E and Hong Kong.

What makes China tick?

Positive economic policies, huge manpower and cheap labor, as well as advanced technology and infrastructure all contribute to China’s success. Chinese exports are viewed as a profitable venture for most international companies because of timely delivery and the capacity to deliver goods in large numbers.

The bottom-line: ‘Developed’ nations must redefine the vast consumer market that China is to ensure economic stability and balanced growth. For now, ‘Made in China’, certainly does dominate international trade!