The needs of China’s economy is the reasons for the rise of Chinese industrial production, government policies of China and development of private businesses, manufacturing companies and the Development of Chinese manufacturing industry.
The impact of China policies is clear: many of the Chinese manufacturing industries are experiencing rapid growth, to attract foreign investment, encouraged the creation of large joint ventures and zones with tax-free construction of industrial and processing plants. In China where the demands for resources are not fully satisfied, the economy of China, however, does not reduce its rate of industrial development.
It can be clearly seeing in the statistics for 2006: the volume of imports to China rose by 23.8% (mainly due to raw material component), while China’s exports – by 27.2%. The main items for export are still the industrial products and equipment. Interesting also the fact that the bulk of Chinese export was provided by the enterprises with foreign capital (58.9% of total), in second place are private enterprises (17.5%) and export for public sector (13.8 %).
This means that the development of industry in China depend not only from large-scale industrial enterprises but also from medium and small, that in any country considered to be the basis of the economy.
Accession of the WTO gave further impetus to the growth of production and development of the industry as a whole. For example, in 2004, placing production orders by foreign companies to Chinese companies increased by 73%. This demonstrates the continuing and increasing interest of companies around the world to the Chinese manufacturing market.
Chinese manufacturers who have successfully mastered the field of light and food industries, began to expand their activities in the area of production equipment, and machinery. Chinese passenger cars, trucks and buses are gradually becoming more visible in the markets of developing countries. Analogues of Western equipment, manufactured in China, is also gradually took their market niche.
Promise development of industry in China
One of the main challenges facing Chinese manufacturers is to introduce of its own industrial production of new technologies, increase productivity and efficiency of workers. Especially it is related to the Chinese state enterprise sector, which has traditionally been the redundancy of staff and a very low efficiency.
The private sector in this regard, it is more advanced, but often the owners of Chinese industrial enterprises employ low-skilled staff to reduce cost of production, which often leads to negative consequences. Wages of Chinese workers differs depending on the region and the range of 150-300 dollars per month.
Companies with foreign capital have some advantages in comparison with the Chinese state-owned industrial plants or the private sector. They have the latest technology, they use more efficient personnel management system, which will surely affect the quality of products and compliance with the timing of production.
Industrial enterprises of China have the market laws, even the SOEs are not always provided with the state order, so the level of competition is high, which allows foreign partners to choose the most profitable of the existing market offers.
Exports of goods with high added value (high-tech equipment, vehicles, ships, etc.) is encouraged at the government level – such companies are entitled to receive preferential loans. Of course, time will tell whether the Chinese government realize its ambitious plans for the withdrawal of China’s industry to a new level of development and transformation of Chinese enterprises that serve the needs of the international market in the enterprise, calls fashion.
