China Manufacturing Chinese Manufacturing Industry

The social group that I choose to analyze is the population involved with the Chinese manufacturing industry. I choose this particular group is because of three reasons. The first reason is China's economic develop is growing rapidly relative to the rest of the world. Another interesting fact is that compared with other countries, Chinese labor is much cheaper yet there is still a high skill level. Because of these factors, a large number of products are exported every year and some people have called China "factory of the world." The final reason is personal and it is because I am a Chinese, I have an intimate knowledge with China, and my family is also currently engaged in the manufacturing industry. I have access to information about the environment, economics, and politics that has led to the number of manufacturing companies in China that is currently decreasing.

The environment in China definitely affects China's manufacturing industry. For example, the paper industry leads to China's forest resources reduction and cities contribute to the shifting of sand dunes. The Chemical products manufacturing have led to the pollution of water resources and the air quality has become poor in many parts of China. Standing in the global manufacturing environment, China's manufacturing industry has seen a lot of progress as well as a lot of impacts to different aspects of its society. Many international companies chose foreign manufacturing because of low labor rates and the fact that production has good quality in China. However, the environmental concerns and issues have led to the decrease of the number of manufacturing enterprises in China.

From an economic point-of-view, China is developing rapidly in recent years and has seen a significant general improvement in the living standards of a substantial proportion of the population and the domestic per capita income levels have also increased. However, because of China's labor costs rise, this resulted in some manufacturing enterprises having difficulty affording the high rates and have chosen to manufacture somewhere else. So the economic progress that the country has made is also one of the reasons that there have been competitive factors that affect China's manufacturing industry's decreasing trends.

Recently some middle-south Asia countries have labor pools with rates that are cheaper than China and have many competitive advantages. And speaking relatively, the quality of middle-south Asia products is better than products made in China. Some large companies have developed plants to design their own products in these countries as well as process high-technology products. In this paper I will find the resources to prove the number of China manufacturing industry is decreasing. And find the resources and information to attest that Chinese manufacturing is developing to high-tech manufacturing. This research will focus on factors that have contributed to decline trends in the Chinese manufacturing industry.

Literature Review

The first research that I found is from "ProQuest" website which paper was written by Yi-jun, Yuan; Cui-jie, Lv. Which paper named" A study of the evolutionary path of technological innovation modes in the equipment manufacturing industry of China" (2011). This paper is talks about the internal and external factors that hinder the mutation from imitative innovation routine to the independent innovation routine. The authors also mention that in the 1980s the manufacturing industry was considered a strategic industry of China was developed very fast.

However, following this industry developing, it has continued to evolve from the imitation strategy to begin to develop independent innovation. This point supports my opinion that Chinese manufacturing is developing into high-tech manufacturing. I remember that when I was young, Chinese people rarely had access to any independent high-tech products. For example, all the electronics and automobiles were all imported. However imported products required many accessories and these products were almost all produced in China. Several years' later, some Chinese companies began imitating and copying high-tech product designs from overseas companies. Some of these small companies, in the process of imitation, transformed into independent research teams and designed some of its own patented technology. This trend fostered many of the roots that led to many Chinese companies achieving an industrial transformation and an increase in their capabilities.

The second research I also found from "ProQuest" which is named" Politics & Economics: In China, Big Firms Benefit from Push to Curb Supply." Andrew Batson (2007) outlined how the Chinese government desires to rein in the expansion of many industries mainly because of the supply gluts and high...

In this paper, the author talks about two Chinese companies which are "Anhui Conch Cement" and "China National Building Materials"; these two are the Two of the biggest cement producers in Anhui province. The Chinese government gave a mission to these two companies that were to reduce pollution and improve productivity. In exchange, the government offered to give them an incentive that closed the small companies (competitors) in these regions. Such instances illustrate how the Chinese manufacturing industry decreasing due to the fact that the Chinese government intervention is increasingly controlling the market.
From the political perspective, the Chinese government is interfering in the enterprise development because the government is encouraging the development of domestic enterprises and trying to slow international capital investments. The government is encouraging small businesses to close at the expense of supporting larger enterprises. This has provided convenience and support for domestic companies and large enterprises. For example, larger organizations are entitled to duty exemption or reduction for corporate loans, etc. therefore, the political influence the manufacturing industry decrease.

The third research I found is "An Analysis and Strategic Study of Quality Management in Chinese Manufacturing Industry" (2002). In this article the author bases the research on 62 companies in China. He Analyzed of the current situation of Chinese manufacturing quality management and discusses problems and their root causes. The focus of the research is how to improve the quality management strategy for the Chinese manufacturing industry.

In the article, the author wrote about "With China's entry to WTO in 2001, China's manufacturing companies are facing global competition" (He, Zhen. Liu, Hong, 2002). The increasing levels of global competition have contributed to the pressures that are responsible for the Chinese manufacturing decreasing. China's manufacturing industry is currently facing big competitive right now. Previously Chinese labor was relatively very cheap and many large companies such as Nike, Adidas, GM, etc. moved operations to China to produce or assemble parts. However, companies such as Nike and Adidas have moved production to Thailand and the Philippines because their labor and productivity rates are relatively cheaper than China.

The manufacturing industry did not develop alone however. Another often overlooked element is the distribution network that supports this industry. Developing the infrastructure to move raw materials into manufacturing and finished goods to their destinations is a necessary component of the process. One study found that the distribution sector had the positive impact on manufacturing sector and helped China to develop their manufacturing capabilities (He, 2014). Therefore, even though other countries may have cheaper labor, China still has other benefits that can offer companies a competitive advantage. However, China's political ambition to develop domestic companies offsets these advantages.

Other studies have also looked at such interventions in free trade from other perspectives. Many companies outsource their entire manufacturing base to China. However, many other countries are beginning to develop competitive advantages in specific industries. For example, India is more likely to be the destination for outsourcing in the high-tech service industries and telecommunications (Jordan & Owusu-Nyamekye, 2013). China is one of the last socialist countries remaining in the world and continues to exert a large amount of control over the population which serves as a barrier to foreign direct investment (FDI).

Although China has made substantial contributions to open its economy since 1978, there still remains a large amount of social control over certain industries. Another study used the World Bank Investment Climate Survey for data to determine if economic openness is correlated with manufacturing efficiencies and it was found that the opening-up policy has played an important role in improving the efficiency of China's manufacturing industries (Liu & Zou, 2013). Liu & Zou also show, at a 90% confidence level, that open firms are more efficient than non-open firms in four out of five sub-industries. Therefore, from the perspective of efficiency, the Chinese government's interventions in the manufacturing industry can be perceived as a negative contribution.

If it is clear that some of the socialist policies are counterproductive to efficiency, then the question remains about why they are still in place. One study considered a random selection of manufacturing firms in representative Chinese cities and examined how firms' compliance with social insurance policies is shaped by their historical imprinting, by their founding ownership structures, as well as by massive institutional changes (Han, Zheng, & Xu, 2014). The research indicates that the culture and the organizational design and imprints have created a situation in which many companies voluntarily comply with the historical social influences in the country.

Conclusion

The Chinese manufacturing industry is a strategic industry of China and was developed very fast in…