China shifts focus to high-end goods

Cheap and Chinese may very well have very little in common in the very near future. According to a source at The Beijing Axis, China has emerged as a global manufacturing powerhouse in the past two decades – but for low-value goods. “The focus is, however, fast changing from lowvalue goods such as clothing and footwear. The country is now looking to transition up the value chain.” Furthermore, the spokesman said, rising input costs as a result of rapid economic growth have been eroding China’s cost advantage. “As a result, it is increasingly looking to shift its manufacturing focus to high-value goods – and technology and innovation will emerge as significant drivers of opportunity in Asia in the future,” he said. “For example, Chinese mobile phone manufacturers are rapidly gaining market share globally. By focusing on providing highquality mobile phones at affordable prices these companies already have a substantial presence in emerging markets and are increasingly looking at developed markets.” He said the rapid growth in the Chinese middle class had also changed the global consumption landscape in fields such as retail, fashion and other consumer-oriented sectors by creating a large, wealthy and increasingly globalised consumer class. “China has also become a source of global capital with investments across the world. While it has historically been dominated by mining and energy-based investments, the trend is shifting with industrial, manufacturing, technology and servicesbased investment attracting capital from China.” The biggest challenge for companies looking to do business in and with the Far East continues to be the sheer differences present there, he added. “These range from differences in language, customs and other cultural factors to political and regulatory differences and a host of others.” Whilst globalisation is bridging the gap between East and West it is still a very gradual process, he added. “As a result, navigating and overcoming the many challenges is critical for any company looking to be successful in the Far East,” he said. CAPTION 'Cheap and Chinese' may soon have little in common. Photo: Calvin Teo