Study on the Relocation of Chinese Manufacturing Industry

When the globalized economical crisis broke out the negative and pessimistic comments came into play. The trend to criticize both cargo export and manufacture orientations is the main stream in China. The proposals accordingly are either to replace the export of goods by service export i.e. by undertaking out-sourcing granted from other countries or transfer manufacturing industry to inner land for cheaper cost. Encountering this ridiculous notion the paper clarifies that the fundamental principles for both international division of labor and the theory of compared advantage are still valid. The relocation of Chinese manufacturing industry is crucial and is first discussed structurally. The paper suggests a dragon-like Chinese manufacturing structure as consolidation of strategy with 3 sectors: dragon head-equipments ( including machineries), dragon body-infrastructure and dragon tail-hard wares and fittings in synchronous proportion. And then geographically stresses that coastal cities are still of superiority as front and master for manufacturing supply chain. And the potential to expand throughout the world for Chinese transnational companies mainly in the field of equipments have been revealed. The paper at last introduces a new concept, "supply loop", linking African market, the lion's share.