China is the world’s largest manufacturer, sometimes referred to as ‘the world’s factory’. It has been an attractive destination for manufacturing in recent decades thanks to its low labour costs, technically skilled workforce and good infrastructure. But China’s competitiveness and manufacturing profile are changing, with more developed regions moving up the value-chain and labour-intensive manufacturing moving inland. Businesses are increasingly choosing to manufacture in China to service the growing Chinese market, rather than use it as low-cost option to manufacture export items.
Manufacturing’s percentage share of Chinese GDP has been slipping in recent years, but it remains a major sector, accounting for 42.6 per cent of GDP in 2014. The sector employs about 30 per cent of workers in China, and has ensured China remains the world leader in gross value of industrial output. On the more developed Chinese eastern coast, the focus has increasingly moved to advanced manufacturing, while lower cost and more labour intensive manufacturing is increasingly located further inland.
However, as China’s focus on the services sector likewise grows, increasing numbers of Chinese will be employed in the financial services sector, rather than manufacturing or agriculture.