Analyze the problems faced by Chinese manufacturing industry

China's manufacturing industry is currently facing a double crisis: First, low-end manufacturing flows to Southeast Asia, South Asia and other places, the original industrial chain has been interrupted; Second, some of the machinery available in the smart era of manufacturing back to the United States and other developed countries.

On November 28th, Japan’s Daiwa Securities Capital Markets Corporation reported that preliminary indications are that Southeast Asian countries have started to surpass China as a low-cost manufacturing center. This trend may accelerate in the coming years and China may lose in the next five to ten years. The "world factory" status.

In recent years, wages in China have grown rapidly. The manufacturing batons are being transferred from China to the lower-cost ASEAN countries, namely Thailand, the Philippines, Vietnam, Indonesia, Laos, Cambodia, and Myanmar. For most of the past 10 years, Vietnam’s labor-intensive industries such as textiles and clothing have outpaced China’s exports. In the past two years, Cambodia’s export growth has exceeded that of China.

The latest issue of the "Atlantic Monthly" magazine in the United States is based on the theme of the reflow of manufacturing in the United States. It also contains two articles that analyze recent manufacturing trends with changes in the direction of flow. Its main purpose includes two aspects: On the one hand, the rapid increase in China's labor costs has led to the weakening of its low-cost advantage and the outflow of low-end manufacturing; on the other hand, the re-industrialization of the U.S. smart era has made this wave of domestic U.S. manufacturing recovery different from the past. The characteristics are not a simple reflection of the economic cycle. This change deserves our close attention.

In an article entitled "Inner Prosperity," Charles Fishman described the picture of the recovery of the US manufacturing industry as an example of the rise and fall of GE's industrial park in Kentucky since the 1950s.

The industrial park was built in 1951 and there were 23,000 workers during the peak period of 1973. In the 1980s, with the decline of the manufacturing industry in the United States, the number of workers in the park was already below the 1955 level. By the 90s of last century, this park had become a chicken taster, and several CEOs were considering selling the park. This is a typical story of the United States manufacturing industry sunset. However, it is surprising that this year, the park has a new production line opened continuously: in February there is a production line dedicated to assembling the latest generation of low-energy water heaters, used to replace a GE contractor in China.

What are the factors that make GE resist the recognized cheap and efficient labor force? The answer provided in this case is technological innovation and energy consumption. At the top of this Geospring water heater is a large number of wired control panels. After the prototype arrived at the Kentucky production line, engineers who had been unfamiliar for many years could not help but the subsequent free working atmosphere led the team to find an innovative solution: the results of the redesign. It is possible to remove one for every five parts, reduce the cost of raw materials by 25%, and reduce the assembly time from 10 hours in China to 2 hours. The price of the final product at the point of sale dropped from $1,599 to $1,299. Behind this case are several major environmental changes: the soaring oil prices have doubled the cost of transportation; the prosperity of the United States natural gas has reduced energy costs in U.S. factories, which is why the U.S. does not experience stagflation in the 1970s; Rising; U.S. trade unions’ policy adjustments in recent years, and the increase in U.S. worker productivity, have caused labor costs to decline year-on-year in products.

To this day, the manufacturing industry has begun to show marked changes in direction, and manufacturing professionals have begun to do new homework. Of course, some labor-intensive industries, such as the clothing industry, may no longer be able to get the second chance in the United States.

It remains to be seen whether this phenomenon, which has not yet been produced on a large scale, in the manufacturing industry will continue to expand in the United States. In any case, with the arrival of the era of smart manufacturing and the era of new energy, the return of certain smart manufacturing to the United States is a general trend.

In another article titled “Mr.ChinacomestoAmerica”, famous senior critic James Falows pointed out to the public the possible model of certain manufacturing industries flowing from China to the United States based on his many years of experience in China.

With the help of the Internet, all aspects of the product from design and production to sales services are undergoing a revolution. One of the features is that it is easier to become a reality from the idea to the product, and the cycle of product upgrade and elimination is shortened. The previous cycle was probably a few months, but now it may be several weeks. Local production has obvious advantages in logistics cost.

A new generation of intelligent manufacturing and rapid response technology has reduced the threshold for product design and manufacturing. The rapid and effective response to the market has become a winning weapon for the market. This is also reflected in China's FMCG field, except that the market is far from friendly to entrepreneurs.

Therefore, it can be seen that China must take the opportunity of global industrial transfer to occupy a place in the midrange manufacturing field and embed it in the global industrial chain.