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China's manufacturing industry faces three major problems
Category: Industry dynamics
Date: 2018-11-22
Click: 1581
Author: 佚名
Many industries have serious overcapacity. The rising price of international primary products market has brought more and more pressure to China's manufacturing market which wins at low cost.



Dr. Wang Xiwen, Director of the Electronic Commerce Research Institute of the International Economic and Technical Cooperation Center of the Ministry of Industry and Information Technology, has worked in the field of industry and information technology for more than 10 years. He has thus analyzed the disadvantages of China's manufacturing industry:

Although China is already a big manufacturing country, its manufacturing industry is "big but not strong", which still lags far behind the powerful manufacturing country. There are many problems, some of which are fundamental. The three main problems are as follows:

First, the industrial structure is irrational.

From the production point of view, the unreasonable industrial structure of China's manufacturing industry is characterized by structural and regional overproduction at a low level, as well as high consumption and cost of enterprise production. Specifically, many important industries have high dependence on foreign technology and weak ability to develop independently, which makes it difficult to adapt to fierce international competition. Many industries have serious overcapacity. In 2013, the utilization rate of industrial capacity in China was 79%, and backward capacity accounted for 15% to 20%.

With the rapid expansion of China's foreign trade scale, the binding force of external market demand has risen significantly. The terms of trade of low-end products and primary products are deteriorating in the long run. The export pattern of labor-intensive products will not have much room for growth in the future.

Two, the added value of products is not high.

For a long time, Chinese enterprises mostly adopt OEM mode of production, which is at the middle and low end of the global value chain. Product design, key components and process equipment mainly rely on imports. Even if the products occupy a certain share in the international market, Chinese manufacturers are more in the assembly and manufacturing links, generally do not grasp the core technology, key components and key technologies mainly rely on imports.

Because of the low added value, Chinese products have little profit. At the end of 2011, an American scholar published a report entitled "Capturing the Profit of Apple's Global Supply Network". The research on profit distribution of the iPhone mobile phone shows that in 2010, for every iPhone sold by Apple, 58.5% of the profits were accounted for by Apple, while only 1.8% of the profits were earned by mainland Chinese workers. It is precisely because there is no technological advantage in the value chain. Despite the hard work, we get the lowest and little profit.

Three, energy consumption is large and pollution is serious.

China is the world's largest manufacturing country. In 2013, China consumed nearly 3.75 billion tons of standard coal for primary energy, accounting for 21.3% of the world's energy consumption, creating 11.6% of the world's GDP. At present, chemical oxygen demand, nitrogen oxides, sulphur dioxide, ammonia nitrogen and carbon dioxide emissions in China rank first in the world. Haze, water pollution and excessive heavy metals in soil have become social hazards.

In the chain of division of labor in the world industry, the link that belongs to China is manufacturing industry, which itself is an industry with a great demand for natural resources. In addition, the low efficiency of utilization leads to the excessive consumption of natural resources in the process of economic development. The rising price of international primary products market has brought more and more pressure to China's manufacturing market which wins at low cost.

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