Posts tagged ‘manufacturing’


Survey Shows China Passes U.S. in Stuff Built – China Real Time Report – WSJ

China is the world’s No. 2 economy by most measures, but by one it has surpassed the U.S. China has overtaken the U.S. as the world’s wealthiest nation in terms of built assets in 2014, and is likely to double that of the U.S. by 2025, according to the Arcadis Global Built Asset Wealth Index.

The study compares 32 countries in terms of their buildings and infrastructure – homes, schools, roads, airports, power plants, malls, rail tracks  and other structures. In fact, China’s stock of built assets will exceed the next four economies combined in the next 10 years, according to the index.

The firm calculates the data at purchasing-power-parity rates, which adjusts the figures to account for differing costs in each country. That measure tends to boost the size of figures from developing countries. China has the largest stock of built assets at $47.6 trillion in 2014 and the U.S. came in second at $36.8 trillion, according to the study released Monday. In the last report, the U.S. was ahead at $39.7 trillion in 2012 compared to China’s $35.4 trillion. China’s rapid asset building came alongside soft investment in the U.S. to replace old machinery, equipment and buildings, the report said.

The index is billed as an alternative economic indicator to measure a country’s performance. the index quantifies the value of a country’s infrastructure as well as its public and private property.

Policymakers have been trying to direct the Chinese economy to rely more on consumer spending rather than investment. Still,  the pace of economic rebalancing has been slow, leading to softer growth despite some positive signs in China’s consumer sector.

The transition “is encountering difficulties, as the government has repeatedly used fiscal stimulus to try to meet its growth targets,” said the report. “The proportion of the economy accounted for by investment is falling only very slowly.  This keeps China’s built asset stock growing rapidly.”

China’s economy grew at 6.9% in the third quarter this year, falling below 7% for the first time since 2009. In the past two years, Beijing has been struggling to turn to more sustainable drivers of growth amid mounting concerns about manufacturing overcapacity and an oversupplied property market.

“There is also likely to be significant underutilization of assets in China given growth is so rapid and much asset creation is pre-emptive, also known as ‘build it and they will come,’” said the biennial report. Since 2000, China has invested $33 trillion in built assets, with its investment in infrastructure at 9% of GDP, dwarfing the U.S.’s current 2%said the report. In per capita terms, however, populous China appears far from being overbuilt.

China’s built asset wealth per person stood at $34,100, which ranks it No. 24 worldwide, unchanged from its previous ranking in 2012, according to the index. The latest figure is slightly less than a third of the U.S. per capita figure of $114,100. The countries at the top of this ranking are disproportionately made up of smaller nations by population or area, hence the density of built asset stock is much greater per resident, the report said.

Source: Survey Shows China Passes U.S. in Stuff Built – China Real Time Report – WSJ


China’s Xiaomi to Make Smartphones in India – India Real Time – WSJ

Chinese smartphone maker Xiaomi Corp. will begin manufacturing phones in the southern Indian state of Andhra Pradesh, according to the state’s highest elected official.

A tweet from the verified account of N. Chandrababu Naidu, the state’s chief minister, said Xiaomi would announce the move today.

Xiaomi’s move follows Taiwanese contract manufacturer Foxconn’s announcement Saturday that it plans to spend $5 billion on factories and research and development in the western state of Maharashtra. Foxconn, known officially as Hon Hai Precision Industry Co. assembles Apple Inc. iPhones and as well as most of Xiaomi’s phones. Foxconn has a plant in Andhra Pradesh.

The Indian government amended its customs rules recently to make it more attractive to make electronic goods in India, as it seeks to boost manufacturing, create jobs and reduce reliance on expensive imports from China.

via China’s Xiaomi to Make Smartphones in India – India Real Time – WSJ.


Why China May Have the Most Factory Robots in the World by 2017 – China Real Time Report – WSJ

Having devoured many of the world’s factory jobs, China is now handing them over to robots.

China is already the world’s largest market for industrial robots—sales of the machines last year grew 54% from 2013. The nation is expected to have more factory robots than any other country on earth by 2017, according to the German-based International Federation of Robotics.

A perfect storm of economic forces is fueling the trend. Chinese labor costs have soared, undermining the calculus that brought all those jobs to China in the first place, and new robot technology is cheaper and easier to deploy than ever before.

Not to mention that many of China’s fastest-growing industries, such as autos, tend to rely on high levels of automation regardless of where the factories are built.

“We think of them producing cheap widgets,” but that’s not what they’re focused on, says Adams Nager, an economic research analyst at the Information Technology & Innovation Foundation in Washington. Mr. Nager says China is letting low-cost production shift out of the country and is focusing instead on capital-intensive industries such as steel and electronics where automation is a driving force.

via Why China May Have the Most Factory Robots in the World by 2017 – China Real Time Report – WSJ.


Bargaining With Chinese Characteristics: Labor Group Defends Practices – China Real Time Report – WSJ

When Chinese Premier Li Keqiang omitted a reference to collective bargaining in an annual policy speech last week, labor scholars worried that Beijing may be backing away from a much-needed policy tool for dealing with rising industrial unrest.

China’s state-controlled trade unions are seeking to allay such concerns. They are pledging to keep promoting collective bargaining in a way that calms labor tensions without derailing growth in the country’s already-slowing economy.

“Collective wage bargaining is something we will continue to promote,” said Li Shouzhen, a senior official at the All-China Federation of Trade Unions, or ACFTU. “It is a tried-and-tested process that’s practiced by successful enterprises.”

via Bargaining With Chinese Characteristics: Labor Group Defends Practices – China Real Time Report – WSJ.


Hope floats for Delhi’s e-rickshaws after minister’s backing – India Insight

The office of the New Arcana India e-rickshaw company is not easy to find. It is in a nondescript building nestled among other nondescript buildings in West Subhash Nagar, a middle-class neighbourhood of New Delhi.

If enthusiasm showed up on a map, it would be hard to miss the place. Inside on a recent Thursday, a meeting of Delhi’s Battery Rickshaw Welfare Association was in session. Steaming cups of tea were being handed out to members, mostly manufacturers of battery-operated rickshaws.

There are an estimated 100,000 such “e-rickshaws” working Delhi’s streets. Introduced in 2010 and operated by unlicensed drivers, they are a less environmentally harmful and cheap way to get around the city compared to traditional gas-powered autorickshaws and cars that are too expensive for many people to buy. They’re also easier on the operators than pulling a traditional rickshaw or riding a bicycle taxi. But transportation officials nearly made driving e-rickshaws illegal earlier this year in a bid to curb nightmarish traffic congestion and reckless driving.

via India Insight.


China’s services sector grows apace, mirroring rebound in manufacturing | South China Morning Post

China’s services sector grew at its fastest pace in six months last month as new orders rebounded, an official survey showed, reinforcing hopes that the economy may be steadying after a tumultuous few months.


The official non-manufacturing purchasing managers index (PMI) climbed to 55.5 from April’s 54.8, the National Bureau of Statistics said. That is well above the 50-point level that separates an expansion from a contraction in activity.

In a sign of buoyancy in the sector, new orders rebounded to an eight-month high of 52.7 from April’s 50.8. Business expectations also held their ground at a solid 60.7, compared with April’s 61.5.

The pick-up in the services PMI echoes a rebound in the factory sector, which turned in its best performance in four months last month as export orders improved, although activity still contracted, a private survey showed yesterday.

The final reading of the HSBC/Markit PMI for May rose to 49.4 from 48.1 in April, although lower than a preliminary “flash” reading of 49.7.

The final PMI was weaker than the flash reading because of an upward revision of the inventory of finished goods, HSBC said.

via China’s services sector grows apace, mirroring rebound in manufacturing | South China Morning Post.

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* China Factories Try Karaoke, Speed Dating to Keep Workers

WSJ: Third in a Series: China’s Changing Work Force

“After years of offering production bonuses and other financial incentives to boost employee loyalty, TAL Group this year tried an unconventional tactic at its factory here in southeastern China: holding a “Sewing Olympics.”


The manufacturer for such companies as Burberry Group BRBY.LN +1.21% PLC and Brooks Brothers Group Inc. had workers race to cut, stitch and fold raw fabric into high-end dress shirts. The 10 winners received small cash prizes and had their life-size images hung at an outdoor location where thousands of workers pass on the way to meals.

Cheng Pei Quan is a winner of the ‘Sewing Olympics’ at a factory. Manufacturers are looking beyond bonuses to retain workers and boost production in China.

First in the Series: China Manufacturers Survive by Moving to Asian Neighbors

Second in the Series: A Billion Strong but Short on Workers

“Chinese people put quite a lot of value on ‘face,’ ” says 23 year-old winner Cheng Pei Quan, who earned the nickname “The King of Collars” because he can sew 95 collars an hour, a third more than average. “This competition gives me a sense of pride that other benefits such as rising wages cannot give me.”

After boosting pay to compete with other manufacturers, factory owners are finding money alone no longer is enough to attract and retain a generation of workers that demand a greater work-life balance than their parents did.

Companies are holding “American Idol”-esque singing contests, sponsoring dating events, constructing libraries and karaoke rooms on campus, and organizing small dinners between managers and top workers.

Businesses also are sending postcards to workers who visit their families during the Lunar New Year—when manufacturers can lose 20% or more of their staff—urging the employees to return to work.

The measures are a response to an unprecedented shortage in China’s workforce. Demand for workers exceeded supply by a record in the first quarter. China’s working-age population, defined as people from ages 15 to 59, fell last year for the first time in decades, a result of the national one-child policy that was implemented in 1980.

While the number of migrant workers in China rose 3.9% last year, manufacturers face stiff competition from construction, mining and other industries for staff. The average monthly wage for such workers has increased 74% in the past four years, to $395 in the first quarter.

For factory owners, the ability to recruit workers is a matter of survival. If plants can’t find or replace staff quickly enough, they won’t be able to fill customer orders on time. Those that can’t will be forced to turn elsewhere in Asia to manufacture goods—or go out of business.

via China Factories Try Karaoke, Speed Dating to Keep Workers –


* China offshores manufacturing to the U.S.

CNN Money: “Chinese conglomerates, on a mission to expand their global footprint and avoid “anti-dumpingtariffs, are shifting more of their production to America.

This flag is for the Chinese community in the ...

(Photo credit: Wikipedia)

In the United States, cash-strapped states desperate for revenue and jobs, are rolling out the welcome mat for foreign companies that can guarantee both. More Chinese manufacturers have been launching their own U.S. facilities in the last five years, said Thilo Hanemann, research director at Rhodium Group, a New York-based economic advisory group. The biggest investments are being made by Chinese firms with products that have been slapped with hefty anti-dumping tariffs, he said.”


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* Chinese manufacturing continues to expand

China Daily: “Manufacturing bounced back to a five-month peak in February, supported by stronger exports, easing concerns about a possible contraction.

The purchasing managers’ index, an indicator of manufacturing activity, hit 51 last month, 0.5 points higher than January, the National Bureau of Statistics and the China Federation of Logistics and Purchasing revealed on Thursday.

It has stayed above the 50-point level for three consecutive months after it dropped to a 32-month low of 49 in November. A reading higher than 50 means expansion, while below 50 shows contraction.

“The continually increasing PMI proves the nation is undergoing an economic rebound,propped up by industrial production,” Zhang Liqun, a research fellow with the DevelopmentResearch Center of the State Council, said.”

Fears of a ‘hard landing’ for the Chinese economy recedes. Good news for global economies!


* Workers follow manufacturers moving inland

As a direct response to suicides and other labour issues, large manufacturers sucvh as Fozconn, one of the world’s largest contract manufacturers of electronic devices, employing nearly half a million workers in Shenzhen have started to open plants in inner provinces where the labour costs are 2/3 of that of coastal cities.

This will be good for the companies, good for workers of the local province who will not have to travel as far, and good for China who would prefer to reduce the immigrant worker population to more manageable levels, add economic stimulus to interior provinces as well as spreading the industries across China and reducing security risks.

For a view of the challenges facing China, including migrant workers, go to

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