By Xu Zhaoyuan, Research Department of Industrial Economy, DRC

Research Report, No.318, 2021 (Total 6383) 2021-11-01

Abstract: Many economies that have become economically developed, such as the United States, the United Kingdom, Japan and France, now see long-term decline of the proportions of manufacturing industries in their economies, while manufacturing proportions in Germany, Republic of Korea (ROK) and Taiwan of China have remained relatively high. This report makes comparisons on the proportions of manufacturing industries in seven economies including the United States, the United Kingdom and France that have seen downward trends and Germany, ROK and Taiwan of China whose proportions of manufacturing in their economies have remained relatively steady. Research findings show that the stable proportion of manufacturing industries in the latter group can be boiled down to three reasons. First, the proportion of input in manufacturing industries of the total industrial input, especially that in the service industry, remains stable in Germany, ROK and Taiwan of China. Second, they have strong production capacities and complete industrial chains, which have resulted in the low proportion of imports in the manufacturing industries. Third, the proportions of exports in the manufacturing industries in their total demands have kept improving. Further analyses show that Germany, ROK and China’s Taiwan with high exports and low imports in the manufacturing industries have seen long-term foreign trade surplus. Although China with a larger economic scale cannot draw on the modes in the long term, their practices of maintaining complete production and supply chains at home, improving the input in high-end raw materials, parts and production equipment, and enhancing competitiveness of exports still prove worth refering to.

Keywords: proportion of manufacturing industries, international competition, trade surplus, industrial upgrading