2013-2020 Data | 2021-2022 Forecast | Historical. China is the world’s largest manufacturer, sometimes referred to as ‘the world’s factory’. Currency depreciation is when a currency falls in value compared to other currencies. You can learn more about the standards we follow in producing accurate, unbiased content in our. "Minimum wage increases to improve welfare in China." Manufacturing Production in China averaged 6.57 percent from 2013 until 2020, reaching an all time high of 11.40 percent in October of 2013 and a record low of -15.70 percent in January of 2020. China keeps a check on the appreciation of yuan by buying dollars and selling yuan. Industrial production does not take place in isolation, but rather relies on networks of suppliers, component manufacturers, distributors, government agencies, and customers who are all involved in the process of production through competition and cooperation. The race to the bottom refers to a firm's attempts to undercut competitor prices by sacrificing standards in areas such as quality, safety and wages. Library of Congress. Manufacturing Production in China increased 7.50 percent in October of 2020 over the same month in the previous year. The Trading Economics Application Programming Interface (API) provides direct access to our data. Accessed May 4, 2020. There is a positive correlation between child labor and school drop out rates. China has been accused of artificially depressing the value of its currency in order to keep the price of its goods lower than those produced by U.S. competitors. Accessed May 4, 2020. Depending on the type of products you plan to make, overseas outsourcing may not be a viable option at all. In July 2018, the U.S. announced China-specific tariffs, targeting 818 imported Chinese products valued at $34 billion. This was the first of many rounds of tariffs imposed by both countries, resulting in $550 billion of U.S. tariffs applied to Chinese goods and $185 billion of Chinese tariffs applied to U.S. goods, as of Feb. 2020. Over time its expected Americans will feel the impact of these tariffs in the form of an increased cost of goods, while the Chinese economy is expected to experience a slowdown. Accessed May 4, 2020. Accessed May 4, 2020. There are a number of ways for foreign businesses to go about manufacturing in China. Pundits have wondered if China will lose its spot as "the world's factory” as other emerging economies offering cheap labor dull China's competitive edge. Finding a Factory. "China rolls back tariffs on US goods as part of trade agreement." However, rising labour costs, skills shortages and intellectual property protection are significant issues to be considered when looking at manufacturing in China. The export tax rebate policy was initiated in 1985 by China as a way to boost the competitiveness of its exports by abolishing double taxation on exported goods. Top 10 Facts About Child Labor in China. The End of China's One-Child Policy.). CNBC. Office of the U.S. Trade Representative. Council on Foreign Relations. Accessed May 4, 2020. Publish your articles and forecasts in our website.
This is because in China, manufacturers can ask a large number of engineers to work on the required manufacturing overnight. Moreover, the majority of Chinese were rural and lower-middle-class or poor until the late 20th century when internal migration turned the country's rural-urban distribution upside-down. (For related reading, see: Do Cheap Imported Goods Cost Americans Jobs?). For some time to come, China will be "the world factory” with its low production costs, huge labor pool, vast talent base, and business ecosystem. Australian Government, The Treasury. Accessed May 4, 2020. China Daily. However, compliance with the rules in many industries is low and change has been slow. It has been an attractive destination for manufacturing in recent decades thanks to its low labour costs, technically skilled workforce and good infrastructure. (For related reading, see: Boom or Bust? These immigrants to industrial cities are willing to work many shifts for low wages., China doesn’t follow (not strictly at least) laws related to child labor or minimum wages, which are more widely observed in the West. However, this situation seems to be changing and more provinces report they have increased their minimum wages in response to increases in the cost of living., As of Jan. 2020, Shanghai’s minimum hourly rate is 22 yuan ($3.16) per hour or 2,480 yuan ($355.70) a month. In Shenzhen, the rate is 2,200 yuan per month ($315.55) and 20.3 yuan ($2.91) per hour based on an exchange rate of 1 yuan = $0.14., The huge labor pool in China helps to produce in bulk, accommodate any seasonal industry requirement, and even cater to sudden rises in the demand schedule. in high-end, low-polluting manufacturing. The majority of tags, labels, and stickers on a variety of goods proclaim they are “Made in China.” Because of this, it's understandable Western consumers might wonder, “Why is everything made in China?”. U.S. Census Bureau. Some may think the ubiquity of Chinese products is due to the abundance of cheap Chinese labor that brings down the production costs, but there is much more to it than that. It has cultivated an ecosystem to support the manufacturing supply chain, including component manufacturers, low-cost workers, a technical workforce, assembly suppliers, and customers. However, as China’s focus on the services sector likewise grows, increasing numbers of Chinese will be employed in the financial services sector, rather than manufacturing or agriculture. Easy monetary policy and inflation can cause currency depreciation. In Q2 2018, China’s manufacturing PMI stabilized at around 51.6% (51.4% in April, 51.9% in May, 51.2% in June). Overview of manufacturing.
It will take more than low labor costs for emerging economies to set up a business ecosystem that can compete with China's. It allows API clients to download millions of rows of historical data, to query our real-time economic calendar, subscribe to updates and receive quotes for currencies, commodities, stocks and bonds. Minimum wage increases to improve welfare in China, Understanding China's Minimum Wage Increases for 2018-2019, Rebalancing and the Chinese VAT: Some Numerical Simulation Results, USTR Issues Tariffs on Chinese Products in Response to Unfair Trade Practices, China rolls back tariffs on US goods as part of trade agreement, USTR Statement on Section 301 Tariff Action Regarding China, The Chinese currency: how undervalued and how much does it matter, China is letting the yuan crush the U.S. dollar -- Trump is just one reason why, Dollar Yuan Exchange Rate -- 35 Year Historical Chart.