Rising costs, technical shortages, weaker manufacturing advantages in China

China's attractiveness as a global manufacturing center is still there, but some development trends are gradually weakening this advantage. Domestic aspects include rising labor costs and technology shortages, and lack of protection of intellectual property rights.

In contrast, the United States is clearly in a leading position in high-end manufacturing, the creation of "smart" companies, and complex touch screen technologies. More importantly, the United States has a competitive advantage in the new shale oil and gas exploration technology and the so-called rapid prototyping manufacturing. Rapid prototyping technology will change the mindset of manufacturing.

Rapid prototyping enables companies to make localized production and react quickly to changes in demand without having to prepare large quantities of inventory. The importance of these advantages of flexibility and proximity to the market and advanced technology centers may in the future exceed the advantages of overseas production and large-scale processing manufacturing. It is with the latter advantage that China has become a global manufacturing center, but this status of China is facing a threat.

Even if China can match advanced economies in rapid prototyping and manufacturing, it is no longer reasonable for foreign companies to spend long-distance input of raw materials and components and output products. Shenzhen's assembly line, supply chain, and economies of scale will become obsolete; Silicon Valley’s expertise, R&D and production integration, and emphasis on marketing, sales, and value creation will become mainstream.