On Sunday, March 11, Professor Yuenyun (Bill) Chen published an article on China’s manufacturing industry on the China Press USA. This is a daily newspaper in Chinese and it is circulated in California and other states in the US. The articles published in this newspaper are often cited and re-printed in other newspapers in China and other countries.

China has become the world’s manufacturing center for several years. Now, China is facing strong challenges and serious problems. Its economic growth is slowing down and exports are shrinking. Many foreign manufacturing companies shifted back to their own countries like the US and Japan; some other Asian countries like India, Philippines, Vietnam and Indonesia have attracted many foreign manufacturing companies and are manufacturing and exporting more products that used to be made in China.

China’s currency appreciation, the rapid rise of the business costs including labor costs, and shortage of labor, electricity and water in costal cities all contributed to the serious problems of the manufacturing industry in China. However, Professor Chen emphasized that China should not give up its dominant and competitive position in manufacturing. Instead, China should develop an urgent strategy and plan to shift its manufacturing companies from costal cities to inlands, particularly mid and northwestern-regions where operation costs of doing business are much lower and there are ample labors and resources. Such a successful shrift will enable China to maintain its competitive advantages in manufacturing. It will also help solve its employment problems. China’s urbanization rate is increased by about 1% annually. It means that each year, there are more than 10 million peoples moving from countryside to the cities/towns. Providing adequate job opportunities to these people and other young people including college graduates is the most important to China’s economic development and social stability. Continuously developing the manufacturing industry will be the main solution to China’s economic growth, exports, improvement of urbanization and employment.

The article further discussed the relevant issues of shifting China’s manufacturing industry. The article is available (in Chinese) at http://review.usqiaobao.com/2012-03/12/content_1317932.htm.