Many countries are struggling when it comes to the manufacturing industry. Manufacturing companies are facing a wide range of challenges that need to be addressed by relevant governments. China is one of the countries that is facing challenges that slow down its economic growth. The country is working hard to improve the competitiveness of the manufacturing companies in the country. On top of that, the country needs to be very smart when it comes supporting manufacturing industry. Below is a detailed discussion of some of the challenges affecting Chinese manufacturing industry and how the country can revive the industry.

Challenges affecting the industry

High costs

For every sector to grow, the cost of production needs below. Manufacturing companies need to work hard and use strategies that bring the cost of production down. Due rapid growth in China, capital, Huma resource, and energy costs have gone up. The high costs have significantly affected the Chinese manufacturing industry and slowed down their growth. On top of that, other costs are bureaucracy and government-related which impact the sector negatively.


Overcapacity is a situation where manufacturing companies cannot sell as many products as they are designed to produce. China has been experiencing economic slowdown since 2013, and that has resulted to overcapacity. This mainly affects manufacturing companies that produce low-end products that have a high degree of homogeneity.

Research and development

China is lagging behind when it comes to research and development. Most of the manufacturing companies in China don’t engage researchers and developers with vast experience who will help in coming up with new technologies and new products that are market-oriented. The companies lack sufficient funds and innovative talents to drive their companies to greatness.

Severe competition

Many of the manufacturing companies in China are facing stiff competition in international markets. Many countries like Vietnam and India are doing in the international market as they have highly competitive labor cost. Germany and the USA are investing heavily in technology to promote their manufacturing industry which has significantly affected the Chinese manufacturing industry.

How to strengthen Chinese manufacturing industry

China is a leading country when it comes to manufacturing products and inventing new technologies. The government needs to cultivate industrial competitiveness. Also, new policies need to be developed and implemented to reduce overcapacity. On top of that China should help reorganize companies affected by overcapacity. Manufacturing companies need to be encouraged to manufacture high-end products that have high demand locally as well as internationally.

When it comes to taxation, the government should offer tax incentives and support manufacturing companies with financial challenges. Bringing cost of production for manufacturing companies is a good thing to do by the government. Encouraging the companies to be more service-oriented is a good thing that government should do and it will help in making them more competitive internationally. On top of that, the government should encourage and support the establishment of research and development centers that will bring new technologies and products to the market.


China has been experiencing economic slowdown since 2013. This has affected the Chinese manufacturing industry negatively. The government needs to come up with new policies and implement them to support manufacturing companies. On top of that, China should promote the research and development centers are working hard to bring new technologies and goods.


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