The Topic Of Whether China Has Lost The Comparative Advantage Of Manufacturing Industry Is Once Again Fermented.

For China

The current situation seems to be looking at the peak of the ridge, and it is difficult to draw a unified conclusion.

The topic of buying toilet seats in Japan last year has also aroused great public concern over China's manufacturing industry: is China behind?

It is difficult to draw a conclusion from the domestic perspective of the problem, which requires an international comparison perspective.

In an interview with reporters recently, I pointed out that comparing the competitive advantages of manufacturing industries in different countries, cost is indeed an important factor, but it is only one of them.

The comparative advantage analysis of manufacturing industry is mainly based on the following three aspects:

Different countries have different characteristics when making specific analysis and comparison.

For example, the structure of primary energy consumption in China is obviously different from that in western developed countries. China is still dominated by coal. Therefore, the price of natural gas should not be used as a comparative index.

This is a complicated analytical framework. The author tries to make a few comments.

The rise of labor costs can not be applied to the labor contract law.

The cost of manufacturing industry is mainly the price of labor and land, as well as the cost of basic raw materials such as electricity and oil.

In recent years, there has been a sharp attack on the labor contract law in China. Lou Jiwei, the Minister of finance, has also publicly expressed his dissatisfaction with the labour law for the two time.

The labor contract law does have its problems, but the author thinks that the problem is technical and reduces the labor force.

Flexibility.

This is a common problem with the protection of workers' rights and interests.

At the same time, fundamentally speaking, labor cost is determined by the demand and supply of labor force.

At present, the rise in labor prices is mainly due to the reduction in the working age of our working population over the years, which is the fundamental reason for the rise in labor costs in China.

The author compares the salary levels of manufacturing industry in China, the United States and Vietnam from the CEIC database.

The above figure is still calculated by means of national currency units, taking the data of December every year.

Judging from the steepness of the curve, China's wage growth in recent years is much faster than that in the United States and Vietnam.

We will look at the comparison of wage levels after the exchange rate conversion. At the exchange rate of 6.58, the data of December 2015 show that the gap between Chinese and American manufacturing monthly wages is still obvious.

China still has obvious advantages.

Of course, the price of labor only depends on unit time.

Labor cost in China should be higher than that in Southeast Asia and India.

However, the degree of diligence of Chinese migrant workers is incomparable to that of many other countries. Overtime work has become the norm among migrant workers.

Moreover, there are many deficiencies in the protection of labor rights and interests in China.

Therefore, although we are at a disadvantage in terms of labor prices, China has an advantage over these countries.

The logic of price reform in the past ten years is that China's water, electricity and other energy prices are too low.

Take India as an example, is the land cost of China higher than that of India? It is not good to judge absolutely, because the land system of India decides that its land acquisition is very difficult, so the cost of land use is not low.

The system of commercial residential land and industrial land in China is separate. The price of industrial land pfer is relatively low, and some places are even zero land price.

But the problem is that residential land prices and housing prices are very expensive, affecting the cost of living of employees, indirectly affecting the cost of manufacturing.

Moreover, in large cities, especially in the first tier cities, the large number of industrial land available is becoming less and less, which has caused great pressure on manufacturing enterprises.

China's energy prices do not seem to be high, though the trend of price increases is obvious.

In the past ten years, China's price reform seems to have an unchangeable logic: China's water, electricity and other energy prices are too low, which not only leads to price system imbalance, but also leads to waste and pollution.

Liberalization of public service prices and price rises also seems logical.

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The following is a study of the price of 2007 by the State Grid Energy Research Institute and the China electric power [-1.90%] Research Institute.

But the author did not elaborate on the analytical framework of this data set.

In terms of infrastructure, India is far from China, and the two are not at one level.

Take India as an example, in 2010, I went to India and found that New Delhi was a "first tier city" in the country, and the infrastructure was not very good.

The difficulty of land acquisition in India has also affected the construction of infrastructure such as roads.

But in the relatively developed countries, there may be a distance between China's infrastructure and the central and western regions, especially in the central and western regions.

The third factor is the perfection of the supporting system of manufacturing industry.

Two countries in China and India have their own dominant industries and pillar industries. The IT industry in India is good, and it is an English speaking country, and the software industry has an advantage.

Of course, the development of China's Internet industry is also good, and China's pillar industries are more, forming an industrial agglomeration effect. For example, Chongqing, some industries are rising rapidly in a short period of time, and the government's supporting facilities are also in place.

In contrast, India's industrial supporting capacity and the efficiency of local governments are not so strong. There are too many factors to consider.

Although western high-tech companies build R & D centers in India, they also build R & D centers in China. Many companies build Asian R & D centers in Hongkong or mainland China, especially for consumer companies.

In search of a depressions for labor costs, although Foxconn is moving to India, it may be difficult to move all factories in China to India.

In addition, China's entire market is unified, free and open, and there are many market barriers in India. This difference will also have an impact on the development prospects of the two countries' manufacturing industry, and India's market environment is not so good.

At present, the growth rate of GDP in India is more than that in China. It will not be surprising to continue to surpass China in the later stage. However, China's economic volume is large and its base is large, and its GDP added value still surpasses India.

Although India has the advantage of labor, it is not certain whether India can pform its own labor advantages into industrial advantages. Many countries in the world have a large number of young labor force, but not all of these countries can develop labor-intensive industries into a global economic division of labor system, because the labor force advantages turn to industrial advantages, which need supporting systems such as supporting industries, infrastructure and government efficiency.

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"The ability to innovate should really be taken seriously. We do not have the advantage in this regard.

In particular, we should pay attention to our educational problems.

Comparatively speaking, basic education in India may not be as good as China, but its high-end education is doing well. Its scientific research environment and system are worth learning in China.

Of course, India has not yet formed an overwhelming advantage over China.

Let's look at the status quo first.

This is officially released by the four national manufacturing value-added curve, in 2013, China's manufacturing output accounted for 20.8% of the world's share, for 4 consecutive years to maintain the status of the world's largest power.

Another data: in more than 500 kinds of main industrial products, China has more than 220 kinds of output ranks first in the world.

According to magazine, 80% of the world's air conditioners, 70% of mobile phones and 60% of shoes are made in China.

The demand from the Chinese market has greatly strengthened a series of Asian supply chains.

China is gradually becoming a key link in the demand chain.

It believes that this is one of the advantages of China's economy.

The data released by WTO in 2015 show that China's export growth has been higher than the global average export growth for 19 consecutive years, and its export share has jumped to 13.8%, a 1.5 percentage point increase over 2014. The proportion of China's export growth has been the largest since reform and opening up, and has surpassed the highest export share of developed countries since 1969.

This shows that China is going against the trend when global trade shrinks.

This is also the embodiment of the competitiveness of China's manufacturing industry.

However, in recent years, China's manufacturing costs, whether labor, land prices or resource and environmental costs are accelerating, and capital chasing the economic bubble has a significant negative impact on the development of manufacturing industry.