China Review News (CRN) recently published a review by Zhou Yanwu, the Chief Research Officer of an industrial research institute, Research in China. The review gave a few examples to demonstrate the weakness in China’s manufacturing industry. One example was automobile seats, which, (instead of the engine) are the most costly component in a regular car. The 10 top manufacturers hold 95% of the world market, but not one of them is a Chinese company. Another example was paint and coating products. Although China is the largest producer in the world, in 2010, all 2,749 large-scale Chinese companies in this industry made a total profit of US$2 billion. This amount equals the profit of one U.S. competitor – PPG. At the same time, the company that holds the largest share of China’s domestic paint and coating market is a Japanese vendor named Nippon. A third example was the LED industry. China has over 1,000 companies in this category. Their total income is only half that of their Japanese competitor, Nichia. On the profit side, the total of the profits that these Chinese companies receive equals only 20% of Nichia’s profits. The author concluded that China is a big manufacturing country, but it is also a very weak one.
Source: China Review News, June 19, 2012