Markets

China to play a key role in the future world of tooling

| Author / Editor: Dr. Wolfgang Boos, Michael Salmen M.Sc., Thomas Kuhlmann M.Sc., M.Sc., Dipl.-Ing. Dipl.-Wirt.Ing. Max Schippers, Dipl.-Wirt.-Ing. Maximilian Stark / Barbara Schulz

Fig. 1: China's tool and mould production regions. The large share of the economic power concentrates on the east coast.
Fig. 1: China's tool and mould production regions. The large share of the economic power concentrates on the east coast. (Source: WBA)

China - Over the course of the entire year 2016, WBA Aachener Werkzeugbau Akademie, Germany presents spotlights of the most important international tool and mould markets. This edition focuses on China, the world’s largest and most complex tooling market.

Located in East Asia, China is the most populated country of the world with its 1.35bn citizens, where almost 19% of the global population resides. The demographic growth is at a low level of approximately 0.5%, largely due to political family planning measures. Estimations of the UN imply that the population will decrease to 1.3bn by 2050. Nevertheless, the average age of 36 years is well below the average of western industrial nations. China possesses strong inter-regional disparities.

The large share of the economic power concentrates on the East Chinese coast, where the development level is significantly higher than in the more rural areas in Central and East China. Especially the metropolitan cities - Shanghai and Hong Kong - occupy top positions by international standards regarding for instance educational institutions. Nevertheless overall China invests only 0.5% of its gross domestic product into education. Differences are also visible in the health care system, the labour market and the income. Beside economic centres, China is still in many domains a developing country, while metropolises are often comparable to the highly developed industrial nations. At the same time, the recent year’s high rate of urbanisation was responsible for supply and environment problems particularly in the metropolises.

The economy and the industry

In terms of the Gross Domestic Product (GDP), China is the second largest economy in the world, second to the United States of America (Fig. 2). The GDP per capita is approximately €6,764 and thus within the lowermost third of the countries, which were compared in the present study. The economy has grown by an average of 8.1% in the last four years. Since 2000, China’s economy grew by more than €1bn. In 2009, China for the first time took over from Germany as the largest exporting nation in the world. China’s economy was and is an essential factor for the global economic growth. While still being positive, the outlook for the years 2015 and 2016 shows signs that growth will slow down significantly, implying that monetary policy as well as structural economic problems must be amended. China is currently the world’s largest exporting and second largest importing nation. Nearly 10% of all global exports and imports are directly linked to China. The country’s exported goods are worth €1.86bn in 2014, mainly originating in electronic, textile and machinery sectors. The country has various natural resources, such as tungsten, coal, iron ore, graphite, tin, platinum and petroleum. Nevertheless, primary materials are the second largest import goods. More than 50% of the total GDP is generated at the east coast of China. In 2013, the wage level was on average €6,549 and thus significantly lower than all industrial nations, while the income per capita in urban areas is twice as high as in rural areas. On average, every employee works 2,288 hours per year, which is more than in any other country considered in this study. Labor productivity has risen proportionally to the labour costs in recent years. However, this average is particularly supported by the increase of productivity in agriculture. Particularly in the industrial sector, labour costs have increased for several years faster than productivity.

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