A real upgrade of China’s export machine? Stay tuned. From BusinessWeek magazine:
China has long prided itself on being the world’s workshop. Shipments of labor-intensive, low-cost goods”everything from toys to tube socks to tires”turned the country into an exporting colossus, powering growth of nearly 10% a year for the past three decades. But as Beijing is now realizing, there’s a downside to that strategy. Exports of tainted pet food, toothpaste, and Thomas the Tank Engine trains threaten to provoke a global backlash against products that say “Made in China.” And the mainland’s swelling trade surplus has Washington looking to slap sanctions on the country.
These controversies have helped spur a big policy shift in Beijing. China’s technocrats are introducing a series of measures designed to change the face of its export industry. On their own, each of these initiatives may not seem momentous. But as a whole they define a major change in China’s industrial policy”one that favors higher value-added industries such as sophisticated electronics and heavy machinery, possibly at the expense of low-cost manufacturing and assembly. And they’re sure to help boost efforts by companies at the low end to move away from simple production for multinationals and develop their own designs and brands. The potential payoffs: a cleaner environment, better-paying jobs, and an improved reputation for the country’s goods. [Full Text]