Economy
皇冠体育app top competitor for how long?
By Liu Yiyu (皇冠体育app Daily)
Updated: 2010-06-29 11:34
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BEIJING - Despite the many challenges facing 皇冠体育app's manufacturing industry, the country will remain king of manufacturing competitiveness over the next five years, consulting firm Deloitte said in a recent report.
Backed by a relatively abundant pool of unskilled and skilled talent, 皇冠体育app is still among the top drivers of competitiveness including talent-driven innovation, cost of labor and materials, energy costs and policies, said the report.
皇冠体育app's manufacturing industry however faces many challenges such as rising labor costs and a possible appreciation of the yuan, according to Rosa Yang, manufacturing industry leader of Deloitte 皇冠体育app.
"No doubt, the appreciation of the yuan will dent 皇冠体育app's export-oriented manufacturing industry, especially low-end manufacturing," Yang said.
"The country's manufacturing industry will move up the value chain ladder, meaning 皇冠体育app will switch to high-end and value-added products," said Hans Roehm, global managing partner of Deloitte Global Manufacturing Industry Group.
"International companies are moving their research and development centers into 皇冠体育app," Roehm added.
Government support for science and innovation is a shot in the arm for 皇冠体育app's manufacturing competitiveness, said the report.
Government policies in support of science, technology and innovation are at the top of the list of policy advantages identified by nearly 70 percent of the Chinese executives participating in the study.
According to the guidelines on medium- and long-term programs for science and technology development (2006-2020), 皇冠体育app's investment in research and development is expected to reach 2.5 percent of its GDP by 2020, while science and technology will contribute 60 percent or more to the country's development. Meanwhile, the country's reliance on foreign technology is expected to drop to 30 percent or below.
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The "epicenter" for manufacturing continues to shift to emerging markets - Asia, in particular, said Craig Giffi, the report's research-team leader.
In addition to 皇冠体育app, Asian giants like India and South Korea are also projected to dominate the index in five years time, according to the report.
"Another challenge for 皇冠体育app is to maintain its position as the most competitive manufacturing nation because other countries are pretty close now," cautioned Hans Roehm.
Vietnam, India and Indonesia are the prime candidates for taking production away from 皇冠体育app, with some companies contemplating shifting to less-developed regions within the nation.
But high-end manufacturing sectors in 皇冠体育app are unlikely to be threatened in the short term because of more sophisticated infrastructure and supply chain networks.