China‘S One Child Policy

648 Words3 Pages
Sophy Huang
DSOC Essay 5 Revision
9 April 2012
It’s time to change a manufacturing model
In the last two decades, China’s economy has grown rapidly, becoming the world’s second largest economy after the U.S. China has gained this achievement by becoming the factory of the world and exporting cheap products to oversea markets. However, recently China has been losing its advantages in the export sector, which its economy is heavily reliant on. New data shows a visible slowdown in manufacturing in China and it’s time for China to reform its manufacturing model to resist this slowdown.
Several factors caused this slowdown. First, China’s biggest advantage in the export sector, the cheap, seemingly unlimited supply of labor is gradually
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Second, China is facing strong competition in low-end manufacturing, like Mexico, Cambodia, Laos, India and Vietnam. Asian countries like Cambodia, Laos, India and Vietnam have a lower living cost than China and Mexico has geographical advantage since it is closer to America. And fast-paced inflation, the increasing cost of raw materials, the rise of wages and other costs have pushed China to a less competitive position.
Third, Chinese currency appreciation makes Chinese products more expensive to developed countries. In 1994, the dollar-to-yuan exchange rate for was 8.7, and 18 years later, the rate has decreased to 6.3, which means Americans have to pay 28% more to buy the same “made in China” products. Furthermore, the regulations and tariffs western countries have imposed on China make export more difficult and costly.
China is facing difficulties both inside and outside. Since China cannot regain its advantages, the only choice is transiting away from low-end manufacturing. The days of cheap, endless labor is limited, but has not ended. China still has time to invest in research, design and development and train skilled workers to create China’s own high-tech products and brands. If China could relax the One-Child Policy and invest more on children’s education, Chinese manufacturers could have more skilled workers to innovate and produce their high-tech products. China’s manufacturing is at a

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