The Shift of Manufacturing Employment in China

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Jun Hou, Stephen Gelb and Linda Calabrese, August 2017

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Chinese manufacturers, in particular in labour-intensive industries, are striving hard for ways to withstand the pressures emerging during the ‘New Normal’ transition– such as slowing economic growth, labour force shortages and rising factor costs. As a result, they are forced either to relocate production to other low-cost destinations or replace workers with machines by upgrading technological capability levels. The relocation of Chinese manufacturing is forecast to open up major employment opportunities for low-cost regions and countries, with some potentially becoming the next global manufacturing centre.

Light manufacturing offers growth solutions for under-developed regions and economies as it is driven by low factor costs and an abundant workforce. Using data from multiple official sources, this background paper aims to identify the pattern of current manufacturing employment shifts within China and focus on regional and industrial disparities – primarily through the study of four manufacturing sub-sectors: textile clothing and footwear, toys, household appliances, and information and communication technology (ICT).

 

Photo credit: Huajian International Ethiopia, www.acfic.org.cn