The Global Manufacturer

How China Views the US Manufacturing Renaissance

Last Thursday, President Obama announced the launch of the National Additive Manufacturing Innovation Institute (NAMII), designed to "help make sure that the manufacturing jobs of tomorrow take root not in places like China or India, but right here in the United States of America." The announcement did not escape the notice of China.

In a commentary in China Daily titled "Wake-Up Call for Industry," Zhang Monan writes that the "U.S. 're-industrialization' strategy and its acclerated efforts to 'return' to manufacturing in the wake of the global financial crisis are re-forging the world's manufacturing landscape."

Zhang reviews some of the steps the Obama Administration has taken to promote manufacturing, develop free trade agreements and cut down on trade rule infractions. She notes that U.S. productivity has been increasing and its labor cost per unit of output has fallen by "an accumulated 10.8% from 2002 to 2010."

She contrasts this with China, which has relied on a strategy of cheap labor and scale to become the world's "manufacturing workshop." But Zhang points out that China's labor costs have been rapidly increasing (19% annually from 2005 to 2010), narrowing this advantage with the United States.

Rather than rely on cheap labor, she writes, China needs to compete with the U.S. by also focusing on advanced manufacturing technologies and promoting innovation in its manufacturing sector. She references the Obama Administration's efforts to promote technologies such as nanotechnology, high-grade batteries, additive manufacturing, biomanufacturing and industrial robotics.

"Given that the U.S. is on the threshold of a new 'technological and industrial revolution,' China should change its manufacturing strategy in order to overcome its insufficient technological innovation capacity and low competitiveness," she writes.

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