Monday, 8 January 2018

Should China move the manufacturing overseas or inland?


The Chinese economy's magic was begun by the Western companies moving their manufacturing to China, China has been described as the world manufacturer. The low cost of labour and the enormous population size gave China the absolute advantage in becoming the manufacturer of the world; however, recent years, some manufactories have moved to other Asian countries, such as Vietnam, Malaysia, it seems the price advantage is shifted from China to other emerging economies.
It is not possible to move all manufactories from China to other countries, since the manufacturing system in China has been solidly built and the supporting accessibilities have been built, these advantages that other countries do not have. Therefore, it is clear that in the near future, other countries will not be anywhere near threatening China's world manufactory position.
Then here comes a question that China should stop manufactories from moving to other countries or use manufactories to support the inland China's economy. It is not possible to stop manufactories from moving to other countries completely and it might be good for China because some manufactories produce heavy pollution. Inland China may not be effective to deal with manufacturing exports, as the transport cost is very high. If Inland China cannot use international trading to boost its economy, it has to develop a smaller economic cycle to develop its economy.

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