Tag Archives: Industry

A Long Way For Chinese Heavy Industry

While china developing so rapid in the past decades years, more and more Chinese businesses went abroad to broaden their career. At first, manufactures are the most important part. Million tons of apparels, groceries were exported from China to the countries all over the world. Gradually, some light industries and technical products, including air conditioners, mobile phones, computers, became accepted by foreign consumers. Maybe it is time to talk about the issue of heavy industry.

China’s heavy industries are always controlled by the central government by nearly 100 percent. Due to the poor economy circumstance at the beginning of the People Republic of China, central planning economy was utilized, especially for fundamental industries. However, from the beginning of 90th in last century, the state-owned firms presented weak performance, which led Chinese government decided to make some profound reforms. Though the progress was a little sluggish, but the accomplishments were still impressive, especially in the last five year. “At the end of 2013, China had about 155,000 firms owned by central, provincial and local governments, according to the Ministry of Finance. Beijing itself directly controls less than 120 of the biggest and most strategically significant industrial companies, which are responsible for building the world’s largest nuclear reactors and most extensive high speed rail network, buying up mining and agricultural resources overseas, and spreading Chinese goodwill with infrastructure projects across the developing world. To do so, they get access to cheap credit and a raft of other subsidies.” Many Chinese industries have spread their business to foreign lands but problems also emerge meanwhile.

Chinese industry’s core competence is still in low price, which cannot be a sustainable mode to develop. More and more competitors with even lower cost, including India, Vietnam, and some Latin American countries, are swallowing the business from Chinese firms. Moreover, unlike apparels or groceries, heavy industry need to be pretty feasible and durable. Thus, high level of techniques should be pertained to ensure the quality. Besides the inner factors, other factors in the world also can be challenges for China. Economic environments all over the world are not well. Many governments suffered from heavy pressure of budget deficit. The constructions of infrastructure is stepping into a slumping way. Some expecting project was forced coming to a premature end unfortunately. “The halt on construction of the roughly 130-mile bullet-train line, from Mexico City northwest to Querétaro city, has become a sore point in China. On Monday, China’s National Development and Reform Commission, the country’s top economic-planning body, called on Mexican officials to protect the rights of Chinese companies.”

There is still a rocky road for Chinese heavy industry.