Heavy duty China

The most remarkable thing about China is her resilience and ability to achieve just about anything. Buttressed by economies of scale, whatever sector China embarks upon, it impacts the global trade with a heavy blow.
The same was proved by a recent publication by The Economist Intelligence Unit. According to the report, China has steadily increased its share of global manufactured exports by around one percent per year.
With Chinas iron curtain lifted in 1992 amidst new economic reforms, the country became a crucial trading partner for the rest of the world with her share of global manufactured exports reaching 13.7 percent. Statistics from IMF illustrate that the combined value of trade of the developed countries as a percentage of their imports and exports from China ballooned from 13.9 percent in 1992 to a plenteous 59.7 percent in 2010.
During the past decade, China earned herself the reputation of the worlds workshop. Chinese goods became synonymous with dirt cheap goods, flooding the international markets. Much of this demand came from the developed regions like the EU and USA.
However, the gears are now shifting, especially after the global financial crisis. Developing countries, led by China are increasingly entrenching upon product categories which have customarily been the pride of developed nations.
As China advances technologically and wage rates increase, exporters are moving up the value chain and soon China will take the lead in the production of heavy machinery and construction equipment. Already, the country is expected to become the worlds second largest exporter of such goods after USA, overtaking titans of construction-equipment: Japan and Germany.
Moreover, the reign of foreign-invested companies in China is nearing its end as domestic firms overtake them in driving the countrys exports. Chinese exports by foreign-invested manufactures are surrendering after peaking at 60 percent in 2005. The current 48 percent share of Chinas exports by domestic firms is apt to surpass the half-way psychological level during the next year.
In the wake of the current economic crisis, the country is shedding its reliance on the West that consumes more than half of its exports at present. Much of Chinas export demand in the coming years is expected to come from the non-OECD countries, gradually nibbling into the market share of the developed countries in these regions.
On the flip side, the question of Chinas ability to embark upon a technology spree and sustain it also arises. At about 50 percent, Chinas investment to GDP ratio is exceptionally high. However the country lacks in social infrastructure and welfare. The working conditions are still woeful and social security nets are inadequate.
One might also wonder, how soon it will take China to curb its export dependence on the West since every one percent of GDP growth in the US or Europe brings about a six percent growth in Chinese exports. Given the rising wages and razor-thin margins, pressure is also mounting on the country to sustain a 10 percent export growth rate to avoid any massive export-related layoffs.