China, Like the US, Faces Challenges in Achieving Inclusive Growth Through Manufacturing

Robert Lawrence

No PB19-11, Policy Briefs from Peterson Institute for International Economics

Abstract: For more than three decades the goal of becoming "the factory of the world" has been at the core of China's development strategy. This strategy, in combination with high rates of domestic investment and low rates of consumption, made Chinese production the most manufacturing intensive in the world. But as its wages have risen, China's competitiveness in the most labor-intensive manufacturing industries has eroded. Its ability to assemble products remains a major source of its exports, but it has also tried to shift toward more sophisticated value-added production domestically. Chinese domestic spending has shifted away from investment toward more consumption as citizens' incomes have grown. Like Americans, Chinese people are also spending more on services than on manufactured goods. All these changes are fundamentally altering the structure of China's production, reducing the role of manufacturing, and increasing the skill levels of workers in manufacturing. This Policy Brief reviews the challenges posed by these developments for China's long-term goal of achieving more inclusive growth. It presents evidence that commonly held perceptions that Chinese manufacturing employment growth is robust are wrong. In fact, such growth has peaked and China is now following the pattern of structural change that is typical of a more mature emerging economy, in which the share of employment in manufacturing declines as workers are increasingly employed in services.

Date: 2019-08
New Economics Papers: this item is included in nep-cna and nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.piie.com/publications/policy-briefs/ma ... wth-challenges-china (text/html)

Related works:
Journal Article: China, Like the US, Faces Challenges in Achieving Inclusive Growth through Manufacturing (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iie:pbrief:pb19-11

Access Statistics for this paper

More papers in Policy Briefs from Peterson Institute for International Economics Contact information at EDIRC.
Bibliographic data for series maintained by Peterson Institute webmaster ().