China: The Complicated Scenario of Manufacturing Hub of the world

China worked tirelessly in establishing itself as a global manufacturing hub of the world accounting for 28% of total world output in 2018.

With total value added by the Chinese manufacturing sector amounting to almost $4 trillion in 2018, manufacturing accounted for nearly 30 percent of the country’s total economic output. The U.S. economy is much less reliant on manufacturing these days: in 2018, the manufacturing sector accounted for just 11 percent of GDP in the world’s largest economy.

How China rise exponentially in recent years

Technological Advances: China spends on R&D accounted for 70% higher in 2017 than in 2012 with an emphasis on high-tech industrial parks and incubators focusing on technologies such as artificial intelligence, robotics, and big data.

Made in China 2025: 10 Yr plan to accelerate the development of high-tech industries where it aims to become a world leader in telecommunication, electrical power equipment, robotics, high-end automation, and new energy vehicles.

Rapid expansion: Heavy investments: High levels of government spending and foreign investment have enabled China to roughly double the size of its economy every eight years since the introduction of economic reforms in 1979.

However, CORONA Pandemic and Tariff war with the US is testing the resilient power of china to continue as a manufacturing Hub. Several key discussion points have been going around the world whether China will continue to be the Manufacturing Hub or we will see the exodus.

The current scenario doesn’t indicate a clear-cut answer to this question, but a lot depends on how well the alternative destinations ASEAN, India and, Bangladesh can leverage the current situation to their advantage