Chinese manufacturing continues to move up the value-chain

The numbers speak for themselves. China’s share of Asia’s exports of high-tech goods such as medical instruments, aircraft and telecommunications equipment was just 9 per cent in 2000 but by 2014 it had risen to 44 per cent, according to the Asian Development Bank. Chinese low-tech goods accounted for 41 per cent of Asian exports in 2000; by 2014 they were worth 28 per cent.
The shift marks China’s ability to boost innovation and technology as key drivers of its economy. Recent high-profile examples include the building of Britain’s first nuclear power plant in 20 years, at Hinkley Point in Somerset, by state-owned China General Nuclear Power in a joint venture with French energy company EDF. The project’s value to China of the project is said to be equivalent to the export of 100,000 cars. Another example is building passenger jets. Late last year, state-owned COMAC unveiled its first plane, the C919, which can seat up to 168 passengers and is intended to compete with single-aisle jets such as the Airbus A320 and Boeing's 737. COMAC is reported to have received orders from around 20 customers for more than 500 planes, mostly from Chinese carriers but also from GE Capital Aviation Services.
Global airline CEOs have said they wouldn’t hesitate to buy Chinese planes if the standard is high enough. I thought Qatar Airways chief executive Akbar al-Baker made a good point when he embraced the idea of buying Chinese.
“You use an iPhone, which is made in China. Designed by somebody else, but made in China.”
Indeed, these days Chinese designers as well as manufacturers are making global inroads. As a previous column noted, China leads the world in patent applications, is blessed with a growing mass of bright-minded entrepreneurs who are incubating and accelerating China’s start-up culture, and has started to increasingly woo foreign venture capitalists and technologists. Innovation is certainly one of the keys to China’s long-term success, as the country needs to create enough high-value-added, high-productivity jobs to support its growing urban population, especially in the services sector.
Reflecting on the challenges for Thailand as many of us come back to work after Songkran, we need to seriously consider how we too can successfully move up the value chain and raise our productivity levels – without necessarily building nuclear power plants or passenger jets.