GReCEST members collaborate to study the Chinese manufacturing industry in transformation

GReCEST Secretariat


In 2017, two GReCEST members, the Institute of New Structural Economics (INSE) and the Overseas Development Institute (ODI) jointly undertook a case study project “Supporting Economic Transformation - Survey of Chinese Manufacturing Firms”. The goal of the partnership is to examine the transformation paths that Chinese manufacturing firms may take amid pressures of rising costs, outward foreign direct investment activities, and to advise on the development and going-out strategy of Chinese manufacturing firms.

In May 2017, the INSE researchers travelled to Ningbo City and Guangzhou City to conduct field investigations into the clothing industry across the Yangtze River Delta and Pearl River Delta. The team interviewed hundreds of local garment firms to understand what decisions they would make when faced with the challenge of rising labor costs.

The second phase of the project conducted large-scale surveys to 1,400 foreign trade enterprises under four categories: clothing, footwear, toys and home appliances. Based on the structured questionnaires, cluster-based sampling and strict data verification and cleaning, the survey eventually brought about a dataset consistent of 280 variables and 640 observations. The quantitative research on Chinese firm’s transition and upgrading as well as their ‘going-out’ strategies and activities based on this dataset were presented at the 12th NSE Academic Team meeting on October 23rd.

The final project report - Adjusting to Rising Costs in Chinese Light Manufacturing: What Opportunities for Developing Countries? - was first published in Peking on December 4th, in Ningbo, on 11th, and in Guangzhou, on 12th. At the three book launch conferences, Dr. Stephen Gelb, Senior Researcher at ODI, Dr. Zuoxiang Zhao, and Jiewei Li introduced the report from different aspects to a wide audience of government officials, industrial leaders, scholars, researchers, representatives from academic institutes, and news agencies.

The project is the first cooperation between the Global Research Consortium for Economic Structural Transformation members. It is also the first successful research project result based on in-depth enterprise case study combined with the use of extensive surveying based on industrial cluster sampling. The research findings provide informative descriptions and insights into the transformation, upgrading and going abroad strategy of China’s light manufacturing industry in coastal areas.