1、The 112th session of the Canton Fair, Chinas largest trade fair, witnessed a decline in both participants and turnover. Industry insiders say that transactions at the fair are a barometer for Chinas foreign trade. The decline indicates that China is losing its edge in the global manufacturing sector
2、, amid weak global demand, compounded by the countrys waning cheap labor. How can Chinas manufacturing industries find a way out. Wang Wei has more.According to official statistics, transactions at the last session of the biannual Canton Fair shrank by 9.3 percent, compared to the spring session.Ind
3、ustry insiders say labor intensive industries are most seriously affected and face not only a shrinking global demand but also challenges from other emerging foreign competitors in South and Southeast Asia trying to grab market shares.It is a fact that a growing number of giant international textile
4、 and shoes retailers are shifting orders to factories in Vietnam and Malaysia.President of multi-brand clothes manufacturing company SEVENDAYS Zhang Longjiang says factories in these countries do have advantages in terms of labor costs.The cost of labor in China is about 2 to 3 thousand yuan per per
5、son a month, but the cost in Vietnam is only one third of that. So, if the value of a product is 100 yuan, 30 yuan of that goes towards labor costs, but in Vietnam, its only 10 yuan. Thats 20 percent cheaper than China.Increasing wages, production and shipping costs have also forced enterprises to r
6、elocate their manufacturing out of China. Statistics show that more than 2,000 foreign funded enterprises shutdown their production lines in Guangdong last year. Li Chunhong, director of Guangdongs Development and Reform Commission, says this is an inevitable trend.Low-end labor intensive manufactur
7、ing doesnt fit in Guangdongs environment any more. In order to survive, they have to move to those countries with cheaper labor.However, industry insiders say that the shrinking market can work as a propelling power for labor intensive industries to take the initiative to adjust product structure an
8、d strengthen technological innovation.Luochi Shoe Company in Fujian Province is a technologically innovative enterprise. President Chen Hongying says the global economic downturn didnt give his company a hard time, but rather a thriving chance.We couldnt find any factories willing to take our orders
9、 when we first put out innovative products because production requires delicate and complicated skills, and our order volume was small. It was not until the impact of economic crisis hit the shore that they began to take our orders.Despite the unfavorable market environment, Chen Hongyings company h
10、as seen a steady rise in export order profits, largely due to its products technological value. One of its innovations is the speed lacing system, a simple turning button on the shoes that allow the lace to be tied and untied in a blink of an eye. It bumps up costs 60 yuan, but the profit can jump u
11、p by 300 to 500 yuan.According to Zhejiang Trading Delegations observations at the fair, some technological enterprises received orders that pile up to next August, and those producing low-end products rarely found orders, not even during the booming Christmas season.Li Chunhong is the director of Guangdongs Development and Reform Commission.We need develop innovative technology, design and products to explore and open up a new market. So, we should speed up the technological reform and upgrade the process. For CRI, Im Wang Wei.
