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China Briefings

Reports on China issued by Samsung Economic Research Institute

Challenges of China's Manufacturing Industry

Challenges of China's Manufacturing Industry

Samsung Economic Research Institute Beijing Office

Nov. 24, 2010

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China's economic growth is closely related to the growth of the manufacturing industry, which accounts for 40% of China's GDP with the rate of its contribution to the nation's fiscal volume estimated at 50%. The manufacturing industry provides jobs to one fourth of the urban employees in China, while absorbing 50% of excess rural labor. Also, it plays a vital role in attracting foreign capital, thereby contributing to the national economy. However, the increase in labor costs and a yuan appreciation, accompanied by China's economic growth, have weakened the price competitiveness of the Chinese manufacturing industry in the international markets.

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