Will China still be the world's manufacturing center in 2030?
Paul Denlinger, Have worked in several China internet startups
Yes, but it will be fundamentally different from what it is now.
Here is my thesis:
Chinese economic development up until now was based on two major premises:
1.The consumer economy where economic growth is dominated by consumer spending. This reached its peak in 1999, when US consumer spending reached its peak, but had been on a steady slowdown till 2008, and then collapsed in that year. The western economies would continue to be leading consumer economies.
2.Low energy costs based on coal and other fossil fuels.
Let me be clear about two things:
1.I don't believe that the consumer economy will ever return to what it was like before because the global economy is undergoing fundamental changes. The US Fed and the Chinese go nment have basically been trying to beat life into a dead horse by trying to revive western consumer spending. Instead, the global economy is heading into a prolonged period of falling birth rates, and changes in human immigration patterns which will be caused by political factors and global warming. The consumer economy will no longer exist as the Fed and US economic observers think it will, and the sooner they own up to this new normal, the better. Beijing realizes that the western consumer economies are basically history, which is why it is trying to encourage Chinese consumer spending so that China is less reliant on manufacturing.
2.We are at the tipping point when it comes to energy costs, and within 20-30 years we will have a new situation: new free non-polluting energy mainly from solar.
This brings us back to the original question: Will China still be the manufacturing center of the world in 2030.
My answer is yes, for two reasons:
1.All the major supply chains for manufacturing are in China. At a time when manufacturers are getting close to zero inventory costs in manufacturing, this is becoming more important. Just look at the manufacturing centered around Shenzhen, Zhengzhou and Chengdu which are built up around iPhone manufacturing. Twenty years ago, this scale of manufacturing would not have been possible anywhere in the world, but China, Foxconn and Apple have made it possible now because their supply chains and large supplies of labor are all centered there.
2.Within ten years, China will begin to offer free electricity and energy to major manufacturers as more of the Chinese electricity grid switches to solar, wind and nuclear. New supply chain parks will form around these free energy grids.
As China moves to a free energy economy, more investment money will be drawn into China, sucking the energy out of other economies.
At the same time, China will play an instrumental role in developing the new economy formed around free energy.
The lesson for the US is clear: the US go nment should work towards building a free energy economy, not just for manufacturing, but for all Americans.
There is another lesson here: hoarding capital is becoming less important. As hoarding capital becomes less important, Wall Street will have less influence. As Wall Street becomes less important, fewer of the best and the brightest will head for Wall Street.
This is already happening, and is the best hope for the revival of US manufacturing.
Robbie Jena, Industrial Ecosystems and Strategy Architect
Will China still be the world's manufacturing center in 2030?
YES. and for the next 300 years barring any major war.
That does not mean rest of the countries are useless…
Next two that will get along will be USA and India.
India will take some time due to their social structure but sooner or later will catch up to China.
It is because Population for China and India.
And Language advantage of USA along with serious immigration and World Economy management.
USA will do better if they go by Meritocracy than China does….
In the future, I will still come back to USA.
James Conway, studied Science & Business at The Evergreen State College
No. The reason is nations will become aware that tinkering by engineers in manufacturing is the prime force of innovation. No nation will then allow the important manufacturing jobs of high tech and innovation to go outside their national boundaries. I am not talking about iron hangers.
The present condition was created by the billionaires desire to get cheap labor and make themselves richer and labor poorer and not have influence in go nmental affairs. This is the end path of all empires that die. The difference is that America was never a land empire like all the previous ones. As badly as we have been mauled by these idiots we can still climb out of the hole they put us in.
Mind you America does not have to do this all at once. Just make important manufacturing technics as unexportable and make go nment purchases to be only American made. That is 30% of the economy and it would be a good thing for America to be able to be totally self-sufficient. The Armed Forces & Pentagon need American made computers.
Mark Dallas, Professor,Political Science & Asian Studies,Union College NY
I would think so, but I’m not sure that is the right question:
1.China’s population is huge, so it should be the “largest” in EVERYTHING. Even with low productivity, a massive population with a little bit of manufacturing capabilities should be world-leading.
2.Manufacturing itself is becoming less and less important, so advanced countries are better off getting rid of many types of manufacturing (but not all). The US economy is 80% services, so the fact that we still produce so much manufactured goods in a very small portion of our economy points to the high levels of productivity of our industries. (yes, our large population compared to Germany or Japan also helps, so best to look at all of this data on a per capita basis.
3.Technology is shifting such that information is the new critical commodity, not goods and services. I would classify data as a new sector, not just throw it under services (which itself is a seriously problematic category of analysis). So, when one looks to the future, consider data, its collection, manipulation and usages as the core of the economy, not the physical stuff of manufacturing. China does have some data giants, but they are giants only within China…thus far.
Juho Salokangas, IT | Business | Travel | Sharing Economy
Large trend towards in-sourcing to countries, where the consumption takes place (EU, U.S.) is bound to happen for following reasons:
Currently import duties, taxes and logistics increase the price of Chinese made goods significantly
Consumers in the EU and U.S. give extra value towards goods that are produced back home. On the go nment level this materializes in subsidies for factories and corporate taxation programs
While Chinese labor costs and living standards continue to rise, the new generation of automation is close to breaking even with manual labor
译文来源：三泰虎 http://www.santaihu.com/49483.html 译者：Joyceliu
Jeffrey D. Brinkerhoff
In years past, outsiders were distrustful about China, questioning whether it would ever turn into a steady society and have an OK economy. In years late, outsiders are anxious about China, stressing whether China will assume control over the world (at any rate financially). Be that as it may, how do China's own particular analysts and pioneers consider the eventual fate of the terrain?
Kevin Brophy, Entrepreneur
China is transitioning from a manufacturing / industrial society to a service society like the Western economies. They have massively overbuilt in real estate and infrastructure, and their labor costs are approaching Western levels. So the answer is probably no but it's impossible to predict 15 years out.
Byeonguk Yook, History, politics enthusiast.
Yes, if they succeed in attracting more higher value added production. That means more knowledge intensive stuff. Implies the work force will have to be better educated, intellectual property is better protected.
Ray Gordon, Interested in China
Now, there are a couple of myths surrounding manufacturing, particularly in regards to China.
1.) China’s comparative advantage is only cheap labor.
I’ve heard this a surprisingly large amount of times on Social networks from so called “analysts” (who surprisingly refuse to answer more complicated questions about Economics afterwards). One only needs to take a look at these two graphs to see that this is untrue.
Wages in China since 2000 have over quintupled. Yet China’s share of world manufacturing has tripled since 2000, it’s quite clear that China’s comparative advantage is clearly not just cheap labor.
2.) China’s manufacturing sector lacks innovations so therefore is just waiting to get taken out by lower wage countries
While low-end segments are already shifting to South-east Asia, China is increasingly migrating up the value chain (at a frighteningly fast pace), just look at some of these graphs of China’s progress:
China recently overtook the US for patent applications, keep in mind China’s GDP per Capita is still less than 10,000$ (Nominal) and 20,000$ (PPP) so there is a lot more coming.
More importantly, China’s higher value added trade is increasing while lower value add is shifting to Southeast Asia.
3.) China has no cheap labor left
While it is true that China’s comparative advantage is not only cheap labor, some of it is. China is still very rich in cheap labor from the countryside and China’s GDP per Capita and developmental levels are still low enough that a huge amount of cheap labor can be squeezed out of the remainder of the poorer levels of the society. This is the reason why it is premature to say that China is simply out of cheap labor and therefore is going to lose the manufacturing crown.
China’s OBOR is often looked as a grand plan to connect Europe to Asia, but in reality a large part of it is probably to do with connecting the interior with low wages persisting to the coast and reduction of transportation costs.
Now, will China still be the world’s manufacturing center in 2030? Likely yes, but it will not be as dominant as it is now.