China’s Manufacturing Industry Faces 10 Dilemmas

China is the equivalent of a world plant; however, it makes only minimal profits because foreign multinational companies, which have Research and Development (R & D) and management advantages, take away most of the profits. (Sasin Tipchai / 123rf)
China is the equivalent of a world plant; however, it makes only minimal profits because foreign multinational companies, which have Research and Development (R & D) and management advantages, take away most of the profits. (Sasin Tipchai / 123rf)

On March 3, 2014, Qiushi, a journal of the Central Committee of the Chinese Communist Party, published an article titled: China’s Manufacturing Industry Faces Ten Dilemmas. A description of the 10 dilemmas follows:

  1. A lack of the capacity to innovate: China lacks self-owned independent intellectual property products.
  2. Low value-added products: China is the equivalent of a world plant; however, it makes only minimal profits because foreign multinational companies, which have Research and Development (R & D) and management advantages, take away most of the profits.
  3. Severe overcapacity: China currently has a total of 24 sectors, but 21 out of these 24 sectors already have overcapacity problems.
  4. High-end talent shortage: China lacks Research and Development talent.
  5. Corporate tax burden is too heavy: Chinese enterprises have to pay a tax of over 30 percent. Then there is the cost of corruption, plus additional fees. Thus China’s actual corporate tax burden is among the highest of all countries in the world.
  6. Increasing costs: Salaries and wages keep increasing.
  7. A shortfall in funding: The problem of financing directly restricts the survival and development of small and medium enterprises.
  8. Strained resources and the environment: Pollution.
  9. Deterioration of the domestic environment: These include debt problems, a widening gap between the rich and the poor, economic depression, and the abnormal development of real estate.
  10. Trade barriers: Increasing trade conflicts with other countries.

Source

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