Chinas Competitiveness and Manufacturing Socioeconomic Outcomes - Essay Example

China’s Competitiveness and Manufacturing Socioeconomic Outcomes China’s Competitiveness and Manufacturing Socioeconomic Outcomes China’s economic development in the recent past has been extremely significant, thereby making it one of the most competitive nations across the globe. This increased competitiveness compels business experts to mull over the factors that deem China to be among the best nations in terms of relative competitiveness. Besides, various foreign investors have settled on establishing firms within China, thereby having promising results. Diverse factors are critical in increasing China’s competitiveness. Inexpensive labor and liberated policies are among the key factors that contribute significantly to China’s competitiveness. This manuscript mulls over these aspects while considering the socio-economic outcomes of manufacturing in China. Among the key factors that contribute significantly to China’s relative competitiveness are its favorable investment opportunities. China’s favorable macroeconomics has significant positive impacts on its competitiveness (Dunning & Gugler 2008, 170). For instance, foreign manufacturers have the capability to negotiate with the Chinese government over tax benefits. As such, organizations may have more tax benefits, owing to their adherence to specific government norms. Various manufacturing firms have received priority in this aspect, thereby creating a suitable environment for manufacturers. Besides, the promotion of reinvestments in China significantly boosts its competitiveness. Firms within China may recover their taxes up to over 40 percent, owing to their reinvestment for next five years. The reinvestment of numerous foreign firms within China has significantly promoted its expansion, thereby critically boosting its competitiveness. Increased inexpensive and skilled labor also boosts China’s competitiveness. Survey shows that China has cheap literate labor as compared to other competing Asian nations such as India, thus making it a choice destination for foreign investors in manufacturing (Liang et al. 2014 1106). Besides, technological advancements have significantly boosted China’s relative competitiveness. In the recent past, China has significantly improved its infrastructure, thereby providing a suitable manufacturing environment for foreign investors. The nation boasts of sophisticated road and water transport networks, with highly efficient communication networks. Many significantly reduce foreign investment, owing to diverse stringent regulations that tend to favor local firms. However, this concept does not apply in China, where it provides flexible government regulations that critically favor foreign direct investment (Cheung 2006, 9). However, there may be unfavorable regulations for foreign investors such as mandatory joint ventures, but other aspects that may be conducive may deem this negligible. Government incentives such as tax breaks, grants low-cost loans and subsidies critically favor China for investment. China is also perceived to have had a long-term political and economic constancy. This political and economic dependability has significantly contributed to an influx of foreign investors, particularly in the manufacturing sector. The characteristic of the majority of Chinese populace adhering to the implemented law and order has significantly contributed to this stability (Cheung 2006, 9). However, the nation has experienced few incidences of social unrest particularly owing to the dissatisfaction of local employees, but this does not have significant impacts to deter foreign investors. China is also perceptible to have a stable local market. This emanates from the fact that its populace is in the capacity to purchase the various products, owing to a large number of employed individuals, particularly in the urban regions. Additionally, the extremely population provides a steady market for diverse manufactured products. Besides, the China’s cultural aspect of embracing westernization has significantly increased the consumption of assorted products, thereby creating a suitable platform for local and foreign investors particularly in the manufacturing segment (Prime et al. 2012, 312). However, though the population is apparently vast, a critical disparity exists between the rural and the urban populaces, thereby creating significant challenges for investors for China’s rural investors. Owing to this, China puts key emphasis on factors aimed at increasing investment within these regions such as offering incentives and improving transport and communication networks. Other aspects that have crucial positive impacts on China’s competitiveness are China’s low debt. The nation has also increased in its savings in the recent years. Survey shows that China’s saving rate hit 53 percent, thereby reducing its budget deficits. The nation has also increased its standards in the education and health sectors. Its global ranking increased to 32, thereby critically boosting other aspects of the economy (Li et al. 2009, 569). The nation is also critical in terms of inventions and innovations. The government support significantly promotes inventions and innovations for local and foreign investors. However, though various factors promote China’s competitiveness, the nation needs to work on other aspects that deter the same. China’s economic development has also seen the challenge of corruption within dissimilar economic sectors. This is a setback to various manufacturers, and the government needs to focus on alleviating this predicament. Poor accountability is also perceptible within various sectors of China’s economy (Prime et al. 2012, 312). Individuals do not uphold various business ethics. Other setbacks may include challenges in safety. Various production and manufacturing plants have neglected adherence to safety policies, thereby posing dangers associated with accidents. Manufacturing in China has had diverse socioeconomic impacts. The establishment of diverse manufacturing firms has had diverse outcomes within China. Various manufacturing firms within China have been significant in incorporating China’s population within the various production levels. This has significantly reduced the challenges of unemployment within the nation (Dunning & Gugler 2008, 170). This has significant positive impacts in the social aspects of the nations by improving the purchasing power, and thereby the living standards of the population. This has also reduced diverse social ills such as crime and drug abuse related to idleness, thereby significantly promoting coexistence among inhabitants. The diverse manufacturing firms within China play a critical role in increasing government revenue. As such, various aspects of the economy are bound to improve, owing to the government’s ability to support them. Besides, this capacitates the government to provide various social amenities for the populace, thereby making China a destination of choice for FDI, thereby resulting in further development of the economy (Li et al. 2009, 569). Manufacturing firms are also critical in the promotion inventions and innovations. The diverse inventions and incorporation of technology has had significant positive impacts in promoting efficient production, and hence the creation of inexpensive high-quality products that boost the ultimate economic development. This may also have positive implications in China’s exportations. This has significantly boosted the stability of Chinese currency. The manufacture of inexpensive quality products has also boosted China’s competitive advantage within the foreign markets. However, issues regarding the quality and safety standards of Chinese products are recurrent, thereby posing questions over their suitability for diverse utilizations (Cheung 2006, 10). This has critically reduced their sales, since the consumers have a trend of opting for costly but suitable products. The nation has reacted to this through the manufacture of diverse products that meet the international safety standards. Additionally, the government has implemented stringent measures that serve to ascertain safety and quality of the products for local use and export. However, challenges of unregistered nations manufacturing unsupervised low-quality products are still perceivable. Pollution is another critical challenge associated with manufacturing. The establishment of diverse manufacturing firms has resulted in the emission of dissimilar influences that pose challenges to the population’s health and the environment. Additionally, the advancement of technology has seen the advent of e-waste that poses challenges to the environment. The waste management within China continues to experience deficits, thereby highlighting the need to look into the issue (Dunning & Gugler 2008, 170). The government needs to implement stringent measures aimed at pollution control, and safeguarding the environmental and population health. The improvement in various manufacturing modes has influenced the production of various products that critics argue that they could be hazardous to the Chinese populace (Prime et al. 2012, 314). Such is the case of the development of the genetically modified food substances. Experts claim this to have significant negative impacts on the consumers’ health. As such, it is critical to look into the issue, create safe products for the consumers. Bibliography Cheung, G 2006, China Factors: Political Perspectives and Economic Interactions, Transaction Publishers, New Jersey.9 Dunning, J & Gugler, P 2008, Foreign direct investment, location and competitiveness, Elsevier JAI, Amsterdam. 170 Li, H, Li, V. Skitmore, M. Wong, J & Cheng, E. 2009, Competitiveness factors: a study of the real estate market in China. Construction Management and Economics, 27(6), 567-579. Liang, S, Liu, Z, Crawford-Brown, D, Wang, Y & Xu, M 2014, Decoupling Analysis and Socioeconomic Drivers of Environmental Pressure in China. Environmental Science & Technology, 48(2), 1103-1113. Prime, P, Subrahmanyam, V, & Lin, C 2012, Competitiveness in India and China: the FDI puzzle. Asia Pacific Business Review, 8(3), 303–333. Read More