China No Longer “The World’s Factory”

[Dai Toruko]

In the last few years, the global supply chain has been hit hard by not only the recent pandemic but also by the trade wars between the US and China. With the relatively extreme ways that China has been dealing with these issues, many countries have realized the economic risks in relying on China as time goes on. As such, numerous foreign companies have been pulling out of China, going instead to other developing countries such as Vietnam, India and Thailand. On January 12, Canon, another large company, announced that they will be shutting down their factory in Zhuhai, China. This was apparently caused by heavy operational difficulties due to the prolonged outbreaks of COVID-19, which undoubtedly raised concerns from many Chinese citizens. As one of the earliest Companies to have entered the Chinese manufacturing market, the Zhuhai branch has been in operation since 1990, having lasted 32 years. Over the years, the factory manufactures all sorts of products for Canon, from lenses to different electronics like printers, cameras and camcorders. It is worth mentioning that in 2013, this factory was recently upgraded with an investment of $1.5 billion yuan, increasing its production capacity by twofold. At the time, it was one of Canon’s largest overseas factories, employing over 10,000 employees and able to produce up to 20 million cameras a year.

 

[beijingwalker]

Hearing this for decades,..

China Begins to Lose Edge as World's Factory Floor
Updated Jan. 16, 2013 7:52 pm ET

China Loses Edge As World's Factory Floor

China is losing its competitive edge as a low-cost manufacturing base, new data suggest, with makers of everything from handbags to shirts to basic electronic components relocating to cheaper locales like Southeast Asia.

www.wsj.com

Resource Hub

www.globaltranz.com

 

[Bilal9]

My God - some of these people publishing this article are such Morons.

I read the photo industry mags all the time. Canon Zhuhai was shut down because the products they make (Compact Cameras and parts) are no longer in demand, supplanted by cellphone cameras, which take much better and share-able images.

"The move, according to a Canon China public relations representative, was being considered due to the shrinking demand for compact camera systems, problems from the pandemic and the ongoing chip shortage."

Canon is shutting down its Zhuhai factory in south China, citing low compact camera demand and chip shortages

After reports Canon was going to partially shutter its Zhuhai factory, DPReview has confirmed with Canon Inc. that it will shut down its Zhuhai factory in south China, which is responsible for the production of compact cameras and some video equipment.

www.dpreview.com

There are 1325 people who have a possibility of losing their jobs at Zhuhai - but will most probably be re-trenched in other high skill positions in Canon's other factories.

And these article writers are crying that China is no longer world's factory...

By the way

- Mirrorless smaller cameras have replaced SLR mirror cameras, a lot of them are made in China.
- Compact cameras have been replaced by cellphone cameras. Most of them are also made in China.
- A huge number of Chinese brand Mirrorless MFT/Fuji/Sony mount lens mfrs. (TTartisan, Meike, 7 artisan and others) are also coming up from China, with products at about a third of the cost of Japanese lenses. Some are as good as the Japanese lenses.

The market is undergoing a shift in the camera sector.

Expensive Japanese products will go further upmarket and disappear like Zeiss and Leica.

No one will make compact digital cameras anymore.

 

[IblinI]

 

[艹艹艹]

NEW “ World’s Factory”​

“China aims to double its manufacturing robot density by 2025”

 

[retaxis]

China upcoming collapse 20xx !!!!

 

[GiantPanda]

Ok. Then how come:

Chinaâs Trade Surplus Hit a Record in 2021. These Stocks Helped Make It Happen.

Chinaâs surplus last year was inflated by demand from the U.S., where consumers were stuck at home and flush with stimulus cash.

www.barrons.com

China’s trade surplus surges to new heights. (Published 2022)

The country’s trade surplus broke records for December and for all of last year, as the pandemic continued to generate demand for its goods.

www.nytimes.com

 

[dBSPL]

As China develops, it may shift its production for more competitive conditions. All countries in the world do this.

For example, if I need to give an example from Turkey, Chinese phone manufacturers started to assemble here some of most popular models in lower segments phones, in order to take advantage of customs tax exemption. As a result, Apple and Samsung dominance in the Turkish market has started to broken by Chinese brands in the last two years. Apple also lost its leadership to Samsung in the share of registered phone in Turkey in 2021. However, if the new trend continues, OPPO will take the lead in 2022.

Situation in the third quarter of 2021

In short, China does not lose its feature of being a production center. It is globalizing production functions.

 

[aziqbal]

Vietnam already has lower production cost that China

and many of the South Asian nations are following I mean look at Cambodia its even cheaper than Vietnam

Chinese honeymoon period is over

Economic growth is slowing now to below 5% after 2025

US with larger economy is growth over 3%

 

[dBSPL]

@aziqbal It is also necessary to question China's need for labor-intensive production. China is currently concentrating on technology-intensive manufacturing areas.

 

[Sinnerman108]

There way Chinese economy is designed and built up,
there is absolutely nothing that can change China's position as the world's factory short of trade sanctions etc.

 

[retaxis]

China AI factories with robots will always be the cheapest and best quality products produced. No country can compare.

 

[Shotgunner51]

In terms of absolute size, manufacturing value added of China is larger than the next two (US, Japan) combined, or 5 times that of Germany, no longer world factory?

When it comes to industrial competitiveness, it's never about labor cost (which in fact is part of the currency exchange rate factor) but a lot more other factors, UNIDO publishes the CIP (Competitive Industrial Performance) which gives a rough estimate on the subject. As per 2020 CIP report, China ranks 2nd among 152 countries overtaking US, Japan & South Korea.

​

 

[GiantPanda]

Vietnam already has lower production cost that China

and many of the South Asian nations are following I mean look at Cambodia its even cheaper than Vietnam

Chinese honeymoon period is over

Economic growth is slowing now to below 5% after 2025

US with larger economy is growth over 3%

View attachment 812133

There were many countries cheaper than China even in 2000. For example, India, Bangladesh and the rest of South Asia ALWAYS had lower wages than China not just today.

So why is today any different from 2000?

 

[GiantPanda]

In terms of absolute size, manufacturing value added of China is larger than the next two (US, Japan) combined, or 5 times that of Germany, no longer world factory?

View attachment 812134​

When it comes to industrial competitiveness, it's never about labor cost (which in fact is part of the currency exchange rate factor) but a lot more other factors, UNIDO publishes the CIP (Competitive Industrial Performance) which gives a rough estimate on the subject. As per 2020 CIP report, China ranks 2nd among 152 countries overtaking US, Japan & South Korea.

View attachment 812137​

​

Right and unlike the US, Japan or Germany, China is not a mature economy.

In fact, it is not even fully industrialized. There is much more room for growth and improvement. More room for productivity gains.

Yet at this early stage, it is already the largest industrial power on earth, much bigger than the #2 industrial power who is much more mature.

BTW, Japan and Germany NEVER overtook the US as the top manufacturing nation even when they matured. China took over the top spot while it was just a middle income nation.

Wait till China matures a bit more to see what manufacturing dominance really means -- think about a 6G-connected, AI-infused and fully robotized Chinese manufacturing complex. lol