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Manufacturing Competitiveness Report

Deloitte's Global Manufacturing Industry group and the U.S. Council on Competitiveness recently jointly issued "2013 Global Manufacturing Competitiveness Index" report showing China's manufacturing competitiveness index in current and future five years are topped on list.
 In the domestic factor costs rising, China's first "world factory" crown can still be maintained at present and in the future five years?
 Overall trends: "Asia forward Europe back"
 Deloitte's firstly make a survey on global 550 manufacturing CEO and other senior managers making quantitative score on this basis, and adjust the potential error due to country and cultural prejudices, industry and company size differences, integrate opinions of experts and scholars produce the result.
The survey investigate national talent-driven innovation, labor, raw material costs and availability, energy costs and policies, supplier network, the attractiveness of the local market, trade, and financial and tax system, infrastructure, manufacturing and government innovative investment, legal system, health care system.
 The results show that the current manufacturing competitiveness top three countries are: China, Germany and the United States. Among the top ten countries, only half is developed countries. The report make prediction top three country after five years: first in China, India and Brazil ranked second and third.
 Five years later , the global competitiveness of top 15 manufacturing countries, only one European country - Germany # 4; Asian countries and regions, development of manufacturing industry is generally optimistic about prospects in India from the current 4 rose to No. 2 in Indonesia increased from the current 17 to 11, Vietnam increased from the first 18 to 10. In other words, China's manufacturing industry's main competitors will be further shifted to Southeast Asia.
China advantage: industry chain and policy advantages
 The report said: "China's labor and raw material price advantage, Government's strong manufacturing sector investment and innovation, and a sound network of suppliers are its key strengths."
 Chinese business executives surveyed generally believe that government are actively planning policies in infrastructure development, technological innovation policy, workforce development, health and safety and other aspects of sustainable development to ensure that future relative to other countries a competitive advantage. These favorable policy action, coupled with the Government on a number of key investment in strategic industries, such as biotechnology, new energy, high-end equipment manufacturing, new energy vehicles, etc., are maintained China's strength in the manufacturing sector.
  With the rise of the middle class, China's wage costs continue to rise, gradually lost to neighboring low-cost countries such as Vietnam, Indonesia and India and other countries, but China's advantages in the supply chain within five years is sufficient to maintain the comprehensive advantages. The report shows that in the supplier network, China and Germany, Japan, United States and other developed countries are in leading position, which is the result "China will focus on supply chain localization", thus creating a set of universities, research institutes and suppliers in one of the innovation center. Has a smooth operation of the network of suppliers, can make large multinational production running smoothly, and continues to develop products to meet the complex needs of consumers worldwide.
 
   In addition, the report cites macroeconomic figures, Chinese labor costs in the manufacturing sector accounted for the proportion of exports, manufacturing jobs in manufacturing and other aspects important countries and regions in the forefront. In which labor costs, labor costs, China in 2011 was $ 2.8 / hour, while Brazil is $ 12 / hour, U.S. $ 35.4 / hour, Germany $ 46.4 / hour, India $ 0.9 / hour; manufacturing industry accounted for the proportion of exports, the China 93.2%, Japan 88%, U.S. 64.3%, Brazil 32.9%.
 
      Challenge: tax and policy execution
 
According to Deloitte's survey, the Chinese Manufacturers' overall tax burden is generally considered the most important cost. Including the implementation of the export tax rebate in poor condition. In the major manufacturing countries, China's overall tax burden is higher than most countries, just below France.
 
In addition, policy formulation and implementation, according to a World Bank study, 2011 percentile score in that regard, China has only 45 points, while Japan's score of 78, the United States is 92. Protection of intellectual property rights on innovation, according to Deloitte's survey, China lags behind Japan, South Korea and India, ahead of Thailand, Vietnam and Indonesia.

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