Commentary: Maintain hard-won advantages

China's manufacturing and foreign trade sectors still enjoy a strong competitive edge in the global market

Despite a lingering sovereign debt crisis in the eurozone, the "fiscal cliff" in the United States, and a heavy cloud over the growth prospects of emerging markets, China's economy managed to pick up during its traditional "golden September and silver October" period after a months-long foreign trade slump.

Statistics show China's exports grew 11.6 percent year-on-year in October to $175.57 billion, 1.7 percentage points higher than the 9.9 percent growth in September. In the first 10 months of this year, the country's total import and export volume reached $3.1616 trillion, an increase of 6.3 percent year-on-year. The export value was $1.6709 trillion, an increase of 7.8 percent year-on-year. Against the backdrop of a steep decline in global trade, these are remarkable achievements.

The fact that China's trade conditions have turned better means its manufacturing and foreign trade sectors still enjoy a robust competitive edge in the global market. Despite facing ever-growing pressures from rising costs, China's diligent and well-trained labor force, its relatively complete industrial system, enormous domestic market and well-developed infrastructure, as well as improved public services and stable macroeconomic environment have all contributed to the success of domestic manufacturers and exporters in the global market. It is with such advantages that China's labor-intensive industries have achieved a tangible export growth rate even though they have been under huge pressures from rising costs. For example, from January to October, exports of shoes grew by 10.6 percent year-on-year, while furniture exports rose by 31.9 percent year-on-year and plastics by 39.7 percent.

China should by no means belittle the ongoing transfer of some of its labor-intensive manufacturing to Vietnam, India and other lower-cost neighbors, but it is also unnecessary for it to exaggerate the negative impacts the transfer will have on its overall export prospects. With a far smaller trade scale than China, these countries have a much weaker ability to curb any rise in costs. For example, the export volume of China's textiles was $240.55 billion, exceeding the total export value of any single Southeast or South Asian nation except India. Due to their much smaller economic scale and populations, most Southeast Asian nations are expected to witness a faster rise in labor costs in their processing trade than China has experienced over the past three decades. Compared with its neighbors, some of China's exporting hubs, such as the Pearl River and Yangtze River deltas, have maintained relatively stable labor costs over a long period due to the availability of labor in the vast inlands they border.

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