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Outsource In The Us, Prc And Other Involved Countries

2197 words - 9 pages

    Outsourcing is not a strange word for China, the World Factory. China is earning this name by the 30-year experience of OEM, ODM and assembly manufacturing. However, the economic crisis has become a watershed for both the US and the PRC on topic of international labor cooperation. According to the statistics, the foreign capital is retreating from China, and nobody knows where it went. Chinese government started to eliminate labor-intensive industries and expand domestic demand by investing funds. For example, a 4 trillion RMB stimulation plan is announced in 2008 (Xinhua.net). The merge of labor demand is majorly because of the rising wage level in China and the need of new vocation in the US. In the foreseeable future, China is transforming itself to be a domestic-demand stimulated country, and new manufacturing labor demands turns to other countries and US mainland.
  As a result of observing the economic data in China and the US, the business relationship of China and the US has really changed in some ways. One of the most significant cases is that the increase pace of foreign capital in China is slowing down recently. According to the database of the National Bureau of Statistics, the total foreign capital in China increased from 867.164 billion RMB in 2004 to 1,975.588 billion RMB in 2011, that is about 2.5 times multiplied. However, after 2008, the increase rate in total foreign capital dropped from averagely 18.9% to 5~6%. Referring to the inflation rate, it is actually not an increase but a decrease instead. It revealed that investors start to revise the investment in China, or at least new investors are losing their interest to Chinese labor market.
  Secondly, the originally unstable import/export economy in China has become more and more unstable because of the economy crisis. The total import in China doubled from 2003 to 2005, but from 2007 to 2010, the three-year increase has dropped to 30%(National Bureau of Statistics). Generally, the import-export balance has two important objectives: increase and balance. According to national statistics, the balance is fairly good that in the past 10 years since China has kept a 100 million RMB surplus in export. However, the worrying fact is that the export increase rate from 2007 to 2010 dropped to 30%, along with import increase dropping to 17%. A more visible data is the “contribution” and “stimulation” of three demands to GDP. The contribution of export in China kept a bit less than 20% in China in the past 10 years. However, the watershed showed in the year 2008, where the contribution steeply decreased to 8.8%. And in 2009 the contribution is amazingly -37.4%(National Bureau of Statistics). Without special reasons, the decrease in output is majorly because of a low liveliness in world market. As a result, flanked by the national and international disadvantages, the government and non-government decision-making institution started to revise the strategy and started a painful...

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