Main Industrial Development Issues and Challenges

Need to enhance competitiveness through industrial restructuring and upgrading technology

China’s exports are concentrated at the relative low-end of the value-added ladder, such as apparel, footwear, and household products, although it has tripled its export quantity of machinery and electrical equipment since 2001. Labour productivity increased 772 percent between 1978 and 2004, but value added per labourer-hour is still substantially lower than in developed countries, at US$ 2,600 compared to for example, US$ 63,000 in France. Energy intensity in China has also improved, but is still 7 times higher than in Japan and 6 times higher than in the US. Out of date technology and industrial structures are the main source of inefficiency in labour and energy use.