China’s transformation into the world’s manufacturing powerhouse has been remarkable. When it joined the World Trade Organization (WTO) in 2001, it was a minor player on the global manufacturing stage. But after years of reforming its economy around producing goods for export, its formal entrance to the WTO helped its output soar. In the years since, it has offered itself up as the world’s low-cost factory, making labor-intensive products such as textiles, toys, clothes, footwear, and furniture for companies, and ultimately consumers, around the globe.
These industries were a springboard, allowing China to develop economically and move into more advanced production of items such as electronics, as they were for economies such as Hong Kong and South Korea before. With education and wages on the rise, shrinking its cost advantage, China now wants to focus on higher-end manufacturing, lean on domestic consumption to fuel its economy, and leave the work of cranking out cheap, labor-intensive goods to others.
But if its plan works, who will step in to take China’s place as the world’s workshop?