Latest News:  
Beijing   Light to moderate rain/Light rain    13 / 8 ℃  City Forecast

English>>China Business

Exporters adjusting to rising wages (2)

By Mark Williams (China Daily)

10:44, November 21, 2012

Second, the sheer size of China's manufacturing workforce plus a focus on investment in factories and the infrastructure that surrounds them allows Chinese enterprises to respond quickly to shifts in demand and ship their goods to market faster and at lower cost than their overseas rivals.

Third, many enterprises benefit from generous government support in the form of cheap loans and a supportive currency policy. Opinion is now divided on whether the renminbi is close to "fair value". But exporters in China have the luxury of knowing that the People's Bank of China will intervene if needed to prevent a sharp appreciation in the Chinese currency.

The clearest evidence of the competitiveness of China's exporters is their continued ability to undercut companies' elsewhere in the world. The prices of the goods that China exports to the United States, still its most important market, have barely increased since the start of 2009 (they are up just about 2 percent). This is all the more remarkable because the renminbi has appreciated substantially against the dollar over the same period.

Most significantly, the prices of manufactured goods imported by the US from elsewhere in the emerging world have risen four times as fast. This ability to raise productivity enough to keep prices low explains why China's exporters have continued to expand their share of the global market, even though they no longer have the advantage of cheap labor.

Of course, today's success provides no guarantee for the future. If exporters are to succeed against a backdrop of continued rapid wage increases, they will have to continue grinding out improvements in productivity.

There may also be a limit to how high China's share of global exports can rise before it triggers a protectionist push back from trading partners. For most of the period since the launch of economic reforms, China's emergence as a global export powerhouse followed a similar path to that traced by Japan 30 years before. But whereas Japan's share of global exports peaked at one-tenth in the 1980s, China's share passed that level two years ago and has continued to rise. If this continues, the pledge of Mitt Romney, who contested the recent US presidential election against President Barack Obama, to designate China a "currency manipulator" is unlikely to be the last such threat that China faces.

【1】 【2】 【3】


We recommend:

Yangtze River Highway Bridge in Taizhou to open

Eastern Boom Lightens Western Gloom

Chinese firms 'potential Trojan horses'? slows

AVIC unveils new aircraft engines

China's MA700 to take flight in 2016

13th Int'l Automobile Industry Exhibition

China Int'l Industry Fair opens in Shanghai

Caofeidian coal wharf put into use

Galaxy Soho building in Beijing

Email|Print|Comments(Editor:梁军、马茜)

Related Reading

Leave your comment0 comments

  1. Name

  

Selections for you


  1. China's stealth fighter concept model

  2. PLA Macao Garrison finishes 13th rotation

  3. Unforgettable moments in Nov. (III)

  4. Flight test of unmanned aircrafts conducted

  5. First inter-blood-type liver transplant in China

  6. Harbin Autumn Automobile Exhibition

  7. Embroider best wishes on insoles in Shanxi

  8. China's rich people will reach to 280 million

Most Popular

Opinions

  1. Commentary: Hot money needs cooling
  2. Smart solutions for better city, better life
  3. China remains an 'engine' in global economy
  4. M&A of listed companies gaining steam
  5. Is 'culture' inferior to 'commercialization'?
  6. Chinese liquor makers "sober up" over bans
  7. Strength of Chinese culture lies in understanding
  8. Securing China's e-commerce growth
  9. Hammered ore prices threaten Chinese iron miners
  10. CNN Beijing chief: China's challenges, opportunities

What’s happening in China

Landmark building should respect the public's feeling

  1. Herders, sheep flock move to winter pasture
  2. First inter-blood-type liver transplant in China
  3. HIV patient to sue hospital over cancer op refusal
  4. Test in intelligent vehicle for food detection
  5. Smart card, dumb refund rules