Unit 2 Macro: Can China Stay Competitive

This new five minute video report from the Financial Times is excellent on the competitive pressures facing many manufacturing businesses located in southern China. Wages are rising quickly and some manufacturing businesses have already moved either to lower-cost locations within the Chinese economy or to other countries such as Bangladesh and Indonesia.

But there are alternative approaches and this video emphasises the decision that some manufacturers have made to stay put but instead to move up the value chain and produce higher-end, higher-priced products for advanced western markets. Businesses are reluctant to move factories and sacrifice the human capital that has been accumulated over in some cases over thirty years.

Moving up the value chain ....

High-technology exports (% of manufactured exports), China from Timetric

Moving away from textiles and clothing

Textiles and clothing (% of value added in manufacturing), China from Timetric

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Unit 2 Macro: Globalisation and the Growth of Ports [10 Apr 2012]
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