Analysis of the three major problems of Chinese manufacturing

Dr. Wang Xiwen, Director of the E-Commerce Research Institute of the Center for International Economic and Technical Cooperation of the Ministry of Industry and Information Technology, has worked in the field of industry and information technology for more than 10 years.

Although China is already a big manufacturing country, the manufacturing industry is "big but not strong", and there is still a large gap with the manufacturing power, there are many problems, some of which are fundamental, the most important are three major problems:

First, the industrial structure is unreasonable. From the perspective of production, the irrationality of the industrial structure of China's manufacturing industry is manifested in structural and regional overproduction at a low level, and it is also manifested in the high consumption and high cost of enterprise production. Specifically, many important industries are highly dependent on foreign technology, weak in independent development capabilities, and difficult to adapt to fierce international competition; In 2013, the national industrial capacity utilization rate was 79%, and backward production capacity accounted for 15% to 20%.

With the rapid expansion of the scale of China's foreign trade, the binding force of external market demand has risen significantly, the terms of trade of low-grade products and primary products have shown a deteriorating trend in the long run, and the export pattern dominated by labor-intensive products will not have much room for growth in the future.

Second, the added value of the product is not high. For a long time, most Chinese enterprises have adopted OEM production methods, which are at the middle and low end of the global value chain, and they mainly rely on imports for product design, key components and process equipment. Even for products that occupy a certain share of the international market, Chinese manufacturers are more in the assembly and manufacturing links, and generally do not master the core technology, and key components and key technologies mainly rely on imports.

Due to the low added value, Chinese products make little profit. At the end of 2011, American scholars released a report called "Capturing Apple's Global Supply Network Profits", in which a study on the profit distribution of iPhones showed that in 2010, Apple alone accounted for 58.5% of the profits for every iPhone sold, while Chinese mainland workers received only 1.8% of the profits. It is precisely because there is no technological advantage in the value chain that despite the hard work, the bottom and very little profit are obtained.

Third, the energy consumption is large, and the pollution is serious. China is the world's largest manufacturing country, in 2013, the country's primary energy consumption of nearly 3.75 billion tons of standard coal, accounting for 21.3% of the world's energy consumption, creating 11.6% of the world's GDP. At present, China's chemical oxygen demand, nitrogen oxides, sulfur dioxide, ammonia nitrogen, etc., and carbon dioxide emissions rank first in the world.

In the chain of division of labor in the world's industry, the link belonging to China is manufacturing, which itself is an industry with a great demand for natural resources, coupled with low utilization efficiency, resulting in the rapid consumption of natural resources in the process of economic development. Rising prices in the international commodity market are putting increasing pressure on China's low-cost manufacturing market.