"Made in China" products， either to keep forging ahead or to keep falling behind

In the year of 2011, the "Made in China" products have undergone an unforgettable year. On the one hand, the made-in-China products have played important roles in the world; on the other hand, they are in the face of tremendous pressure to survive all the difficulties. Global manufacturing landscape is changing, and the "Made in China" products will regress if they fail to make any progress.

According to statistics from the United Nations, by exchange rates in early 2011, China's manufacturing output this year reached 2.05 trillion U.S. dollars, while U.S. manufacturing output was 1.78 trillion U.S. dollars, and China will continue to become the world's countries with the highest manufacturing output after 2010.

However, as the world's first manufacturing country, China still can not get rid of confusion of low-end manufacturing. As China is still in the middle and lower reaches of world manufacturing chain, the situation of price trade between Chinese manufacturing sector and the United States has been deteriorating, reflecting diminished exchange capacity of China's unit exports. Actually, the decline also happens to export earnings and trade-added value of per unit of commodities exported.

There is imbalance in the distribution of China's trade with the European countries. Return on capital is not only significantly higher than the international average, but also higher than the average level in the developing countries. Where does highly-yielded profit come from? To a large extent, it derives from the long-term distortion of the labor price.

During these years, China has accumulated a large trade surplus, but it did not get a high profit. According to the calculation of the Federal Reserve Bank of San Francisco, U.S. consumers spent 88.5% of spending on the products made in the USA, including the bulk of total consumer spending for services; however, they only spent 2.7% on the products made in China.

The global financial crisis is forcing developed countries to re-examine their industrial structure, to explore further revitalization of the real economy, and to encourage high-end manufacturing industries to stay at home.

This is a time that if the made-in-China products do not make any progress, they will lag behind. In the future, America's competitive advantage will come from the revitalization of new high-end manufacturing industries and these industries are using a huge innovation advantage and the ability to integrate global resources to strongly return to the market, then how will the products made in China face the market competition?

If China can not really establish a foundation for innovation, not to improve total factor productivity as soon as possible and on the other hand it gradually lose the cost advantage, then these will result in the loss of advantages in both low-end manufacturing and high-end manufacturing industries, which is China's biggest economic challenges of the next decade.

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