Where is China's manufacturing industry going?
Deloitte China manufacturing competitiveness study 2011
Based on a survey with senior executives from 150 manufacturing companies in China, and interviews with executives from some leading enterprises in major sectors, the report contains an in-depth study on the development and competitive landscape of China’s manufacturing industry in relations to other Asian countries.
The research findings indicated that, based on the overall development of the manufacturing industry, 53% of the interviewees believed that the China manufacturing industry was in an absolute advantageous position in Asia. However, when focusing on different individual factors, interviewees' ratings vary substantially from county to country, which fully reflected the different positioning of these countries in the global value chain. The report summarized that besides having sufficient labor resources to cope with the structural transformation, other major forces driving the China manufacturing industry include infrastructure quality, continuous and systematic support from the government on technology research, and vibrant business environment.
While a competitive environment is conducive to the development of Chinese manufacturing companies, they are also facing numerous challenges and pressures. According to the survey findings, currently these companies are most concerned about the followings: increase in tax costs, barriers for exporters to develop domestic markets, intellectual property protection and internal operation challenges.
Chinese government's policies in supporting seven emerging strategic industries have set a clear development direction for its manufacturing sector. The development success of the seven sectors would determine whether China can transform from a sizeable manufacturing country to a strong manufacturing player. Deloitte believes that achieving operational excellence is one of the most important factors for Chinese manufacturing enterprise to enhance their competitiveness. Operational excellence could be achieved through innovating products and services, establishing performance driven culture, M&A and improving risk management and control.