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Economic 360 for China: Growth Prospects and Emerging Opportunities in the Manufacturing Industry
Frost & Sullivan, Aug 2011, Pages: 96
The Chinese manufacturing industry has been primarily export-driven, supported by low labour costs, economies of scale and stable currency in the last two decades. This state of affairs has augmented the industry’s reliance on external markets, increasing the economy’s sensitivity to global economic cycles. In an attempt to reverse this trend, China’s 12th Five Year Plan focuses on the development of high-end strategic industries, bolstered by improved transportation, infrastructure and scientific bases. This is expected to usher in sweeping changes in the manufacturing industry over the next decade. Favourable government policies are encouraging the industry to move up the global value chain, from low-end manufacturing to high-end production and from high-energy consumption to energy savings. The appreciation of the Ren Min Bi (RMB) is resulting in much cheaper imports, but higher costs for enterprises that depend more on foreign markets rather than the domestic market. Against this background of consumption stimulation, more enterprises will concentrate on the domestic market and trade in the manufacturing industry. Industrial reforms are expected to have a positive impact on the quality, productivity and competitiveness of the goods manufactured in China.
The issues of low production efficiency, which have been restraining the growth of this industry, are likely to be assuaged as the industry’s reformation progresses. Manufacturers can stay afloat only if they learn to strategize to tackle the cost pressures, overcapacity and environment pollution challenges faced by the industry. Policies and funds will be mostly tuned to the R&D of applications for environment protection technology, new-energy automotive industry and novel materials and high-end equipment manufacturing. The highest growth is expected in the seven strategic emerging industries of energy-saving environmental protection, new generation of information technology, biological technology, high-end equipment manufacturing industry, new energy, new materials and new energy automotive industry.
China’s economy has shown outstanding growth since 2004 and weathered the global economic downturn well in 2008 and 2009. There was a modest recovery in 2010 and the economy is forecast to reach growth rates of above 9 per cent in 2011. Foreign direct investment (FDI) inflows increased to a new high, indicating that the Chinese economy is attracting higher capital. Other key drivers are the Grand Western Development Programme, urbanisation, development of low-carbon technologies, policy of indemnificatory apartments, environmental protection and the reform of the income distribution system. The government has committed to stabilizing exports and boosting imports to reduce the trade surplus. The higher inflation rate is the biggest concern of the Chinese Government for 2011, so the control of inflation and the management of inflation expectations are the focus of the country’s fiscal policy and monetary policy adjustments.
Economic 360 for China: Growth Prospects and Emerging Opportunities in the Manufacturing Industry is Frost & Sullivan’s Country Industry Forecast service, which provides vital inputs for evaluating the attractiveness of a country and its manufacturing industry. Apart from enabling decision makers to assess the impact of non-market forces, it also helps in identifying new market opportunities. This service provides a strong base for preparing contingency plans. In addition, investors can assess industry-specific risk factors as well as conduct a more in-depth micro research.
Benefits
The following benefits are offered by this research:
Identify New Market Opportunities
Key trends and developments in the Chinese manufacturing industry have been analysed by studying the political, economic, social and regulatory environment, as well as the government’s economic and industry development plans. This analysis provides valuable information to industry participants on emerging market opportunities in different segments of the manufacturing industry.
Understand Future Industry Trends
This study is time-sensitive and takes into account developments in the economic, political and regulatory environments. It is a single-point of reference with a global perspective on the Chinese manufacturing industry, and a focus on the impact of country-specific factors on different segments of the manufacturing industry. This will help in understanding critical industry-specific trends that are likely to affect industry performance and growth.
Comprehend the Policy and Economic Environment
A detailed analysis of the policy, economic and regulatory framework of the Chinese manufacturing industry is provided, which helps understand the linkage between industry performance and the level of economic growth and industry plans. Further discussions on government initiatives about policies and financial support are invaluable to industry participants.
Devise Country Entry Strategies
The research service provides valuable information and analysis of the strengths and weaknesses of the economy of China, which are relevant to the manufacturing industry. It offers information to companies seeking to enter new geographic markets and provides both country and industry trends and forecasts for major variables. These vital inputs are particularly useful in devising country-specific strategies for equipment manufacturers and service providers.
Evaluate Industry Segment Potential
This research service includes an analysis of the major segments in the manufacturing industry in China, with detailed coverage of economic and industry indicators as well as their impact on the future direction and growth of major manufacturing segments. This will help corporate planners develop accurate business plans and enhance their ability to optimise company resources.
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