1/5
"Many companies realize how difficult it is to wean themselves off of the incredibly competitive Chinese production and logistics ecosystems."
This is why, for all the talk of offshoring, China's global share of manufacturing is unlikely to decline.
sc.mp
"Many companies realize how difficult it is to wean themselves off of the incredibly competitive Chinese production and logistics ecosystems."
This is why, for all the talk of offshoring, China's global share of manufacturing is unlikely to decline.
sc.mp
2/5
China-based manufacturers are incredibly competitive not because they are especially efficient or enjoy domestic comparative advantages, but rather because of the huge amount of direct and indirect subsidies and government support they receive.
China-based manufacturers are incredibly competitive not because they are especially efficient or enjoy domestic comparative advantages, but rather because of the huge amount of direct and indirect subsidies and government support they receive.
3/5
This combination of low labor costs, local-government overspending on logistical and transportation infrastructure, cheap and easily available credit, an undervalued currency, etc., are simply the obverse of China's incredibly low household share of GDP.
This combination of low labor costs, local-government overspending on logistical and transportation infrastructure, cheap and easily available credit, an undervalued currency, etc., are simply the obverse of China's incredibly low household share of GDP.
4/5
As long as these direct and indirect subsidies continue, and unless the rest of the world takes similar steps, Chinese manufacturing will be extremely competitive. It is also why Chinese domestic demand will continue to be too weak to absorb domestic production.
As long as these direct and indirect subsidies continue, and unless the rest of the world takes similar steps, Chinese manufacturing will be extremely competitive. It is also why Chinese domestic demand will continue to be too weak to absorb domestic production.
5/5
In that case China will continue to run large trade surpluses that must be absorbed by its trade partners, and its share of global manufacturing will continue to rise, while that of the deficit countries will decline further.
In that case China will continue to run large trade surpluses that must be absorbed by its trade partners, and its share of global manufacturing will continue to rise, while that of the deficit countries will decline further.
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