Export of Products made in US to China: Hopes or wild wishes?
Of late, the emerging technologies, particularly the 3D printers and intelligent robots, have become the focus of attention from the developing countries, so some scholars point out that these Hi-tech automation technologies will touch off the arrival of “New Industrial Resolution”. At the same time, the developed countries also hope to regain the shares of the manufacturing industry sought by the emerging market countries and try again to strive toward China for exporting the manufactured products.
In the 1980s the globalization process arose, so the emerging market countries like China, etc., continued to consume the market shares of the European and American manufactured products. Against such a scenario, China shot up its output out of the global manufacturing industry from 7% in 2000 up to 19.8% today, ranking as No. 1 in the world and far more than the US. In recent years, countries in Europe and Americas tried all means possible to keep this trend in check, so the environmental protection and social responsibility, etc., in addition to the conventional trade barriers, have been successively used by the developed countries as the efficient tools to resist the continuous expansion of the emerging markets. The US even went too far as to require the Chinese government “to improve the distribution pattern of the national income, gradually increase the proportion of the resident income out of the national income so as to enhance the building of the social security system” to “do more for the benefit of the Chinese people”. Under such a background, it is not difficult to understand why Europe and the US try to seek the new industrial development path to prevent China and other countries from taking more shares of the manufacturing industry.
Professor Jeremy Rifkin from University of Pennsylvania and Peter Marsh, editor of Manufacturing Column of “Financial Times” and other scholars clearly pointed out that “New Industrial Revolution” would be built on the basis of the new energy, Internet and intelligent automation, etc., so the invention of a series of technologies, particularly representative of smart software, distributed energy sources and 3D printers would make it efficiently possible for individuals to manufacture the complicated products. Finally, the large-scale production will give way to the customized and localized production. Small operators will have the sufficient strength to vie with the large enterprises, and the technologies like Internet, etc., will render it possible for us to have “Mini- multinationals”.
With the in-depth development of the commercial society, consumers are increasingly seeking the commodity individuation, so products from the durable consumer goods to the industrial machines are increasingly demanded in the “Custom-Made for You” pattern, which highly promotes the customization and miniaturization of the manufactured products. Rivkin and Marsh draw such a picture for us: Hundreds of millions of people can process or manufacture all types of products, transform the building top into the mini power plant at their respective backyard gardens by using the 3D printers, and also sell their products and share the energy in the entire world through the communications revolution.
It is very good to have this idea, yet will the future go like that? Prior to the Industrial Revolution, the manufacturing industry was mainly dominated by the individual economy on a small scale and no division of labor. However, for more than 100 years after the industrial revolution, the manufacturing industry tends towards the large-scale production strongly supported by abundant capital, technical resources and the corporate management capacities, which represents the essential conditions for the manufacturing industry. Mass-manufacturing, professionalism and standardization are the typical markers of the modern manufacturing industry and the landmark event is the pipelining technology invented by Henry Ford. Therefore, the mass-manufacturing and professional division of labor force made it possible for the business entities to conduct the element resources allocation within a larger scope to identify the cheaper element portfolio, which is of the paramount significance for the large manufacturing enterprises.
Based on this opinion, we think that all countries in the world are trying to orient their policy towards breaking the internal trade barriers and promote the free circulation of the factor resources. The current globalization will expand such a policy into the global domain, so the micro-economy, representative of the multinational enterprises, in particular, will allocate their production elements within the global scope. The global allocation of the capital and labor force and the global flow of the commodities will deepen division of labor force among countries: China will become the world factory while the US will become the world innovation center.
Perhaps one day in the near future, the manufacturing industry will develop into a new phase just like the service industry, highly following the mainstream orientation of individuation, localization and miniaturization. However, the production model of the mass-production and standardization of the manufacturing industry demonstrates that the labor force is still the vital production element. The labor force among different countries is characterized by the strong substitutability via the commodity circulation, which determines the sustainable competition for labor force in the manufacturing industry among countries.
There is no doubt that the current global industrial pattern is the very outcome of the division of labor. The addition of the globalized countries into the labor force distribution structure will determine the distribution of the global manufacturing industry. Yet, the imbalance of the labor force distribution structure among countries leads to the imbalance of the global manufacturing industry. To solve the imbalance of the global manufacturing industry, the important prerequisite is how to solve the imbalance of the labor force distribution.
It seems that as long as the current manufacturing industry remain unchanged, it is rather difficult to change the current global industrial structure. Just imagine that it is almost impossible to headquarter Foxconn in the US or Europe, and now that it is headquartered in China, it is more crisis-prone. Although the salary for the laborers in China continues to go up, its labor productivity, likewise, grows faster. With the popularization of the higher education in China, the Chinese laborers will enjoy the higher Performance price ratio.
From the perspective of a longer period, today’s development trend of the manufacturing countries in view of the labor force distribution follows the more rational distribution pattern. As the statistics conducted by Peter Marsh indicates, in 1800 the output of the manufacturing industry in the emerging market countries as thus named accounted for 71% in the world, and particularly China accounted for 33%，yet by the end of 2011, it moved up to 46%. As compared with the western countries, the proportion of the manufacturing industry as from 1990 has constantly dropped from 76% to 54%.
The leading denominator is the change of the quantity and quality of the labor forces of these countries involving in the manufacturing industry, but China’s rise is contributable to the transformation of the massive quantity of agricultural laborers into the manufacturing ones, whereas the American labor forces are highly concentrated in the technical progress and innovation. To proceed from this point, we wonder whether the US can regain the first position in the world manufacturing industry and whether Europe can seize back the market shares from the emerging markets will depend on advantages of their levels of the manufacturing industry, the advantages of the labor productivity or whether they can totally surpass China and other emerging market countries will depend on their subjective will, or whether they are willing to have the industry downgrade to conduct the competition in the manufacturing industry on the same par with China.
In the short run, it is rather difficult for the US middle and low-end manufacturing industry to compete with China, so the American workers should face up to reality, either enhancing their own strength to have the differentiated competition with the Chinese factories or reducing their pay or withdrawing from this industry. Yet, in the long run, those people who think that “Products made in US” can be exported to China just believe that the American labor force is advantageous to their Chinese counterparts and that it is the US not China will dominate and own the technical progress and the initiatives for technical innovation, or believe that the barrier hindering the free circulation of labor force among countries will remain eternally unchanged. On the contrary, those who think that China has far better outlook than the US will natural believe that Chinese laborer have huge potential space, likely to completely surpass the developed countries. Whether the US can again hold sway in the manufacturing industry is just a hope or wild wish totally depends on the value judgment by observers. The final outcome will wait for the test of history.
Originally published on Time Weekly | 2012-9-27
