Reuters
On Monday, The Atlantic wrote a story based on an International Business Times infographic that portrayed China's enduring prominence in manufacturing. Remember, though; prominence is not the same as success. (Just consider this sentence: "Alex Rodriguez continues to be a very prominent baseball player.") China will play a major role in global manufacturing for years -- and probably decades -- to come. But the country's role is not a healthy one, and the weaknesses in Chinese manufacturing outshine the huge numbers displayed in the graph.
The apparently dominant Chinese industries listed in the infographic, such as cell phones, shoes, and cement, suffer from three different problems:
- China doesn't make as much as it seems
- China doesn't want to make as much as it does
- China soon won't be able to make as much as it does
In the category of not making as much as it seems are computers and cell phones. Here, China is an assembler, not a manufacturer. The components of computers and cell phones are made elsewhere, shipped to China, and then boxed there. The advanced technology jobs in design and precision manufacturing of semiconductors are located elsewhere, while Chinese workers essentially provide the packaging. This is why Beijing so much wants to move up the production value chain, and why Chinese trade surpluses are exaggerated.



