China's rapid industrialization has proceeded more quickly than Japan´s. Chinese products are on the rise in the value chain, says Ernst & Young's Global Chairman and CEO James Turley.
When I was a boy in the USA, “Made in Japan” was associated with cheap goods with low value added. However, when my son was born, “Made in Japan” was associated with some of the finest and most high-tech manufactured goods in the world.
This happened over one generation. China's rapid industrialization including moving up produced goods in the value chain has gone even faster than in Japan, he said.
“Made in China” will reach a higher level, but, it will still take time for Chinese products to reach the high end of the global value chain. Today, there are Chinese companies that have the skills for advanced manufacturing, and the number of companies increase every year.
China's GDP has surpassed Japan as the second largest economy in the world. "Made in China" is already available worldwide, but usually with low value-added products and China has a shortage of world class brands.
There is a lack of high level technology and in addition to this, Chinese companies' exports and investments abroad have encountered trade barriers and protectionism in recent years.
However, China will continue to evolve rapidly. For example, Geely Automobile was the winner of Ernst & Young´s contest “Entrepreneur of the Year” in China. Now, the company has successfully acquired the automaker Volvo.
This is an example of how Chinese companies buy more foreign companies which results in that China continues its development.
Cecilia Helland