Cao Dewang, founder of China’s largest vehicle glassmaker Fuyao Group, has said that manufacturing is crucial for a country’s competitiveness. “Manufacturing is part of the secondary industry sector, and only when secondary industry is developed is there demand for service industries,” which are classified as tertiary industries, he told the Global Times.
The comment followed the recent debut of documentary American Factory, produced by former US president Barack Obama and his wife Michelle Obama. The film records Cao’s journey of building his factory in the US.
Cao said that when he began to invest in the US, he was deeply struck by the realization that Americans who were willing to work in factories were mostly older people. Many young Americans prefer to work in finance or technology.
“Even with competitive salaries, we could not recruit young workers,” he said, and the US manufacturing sector had been weakened by decades of “hollowing out” that led to a shortage of skilled workers.
Cao mentioned three advantages of manufacturing in the US: low-cost resources, low taxes and fees, and strong market demand. But there are drawbacks as well, such as high labor costs and union disputes that led to industrial inefficiency.
The Trump administration has been rolling out measures to attract manufacturing enterprises back to the country.
China maintains advantages in manufacturing, such as low compensation costs, a good supply of skilled workers and low-priced industrial land, he said, although these advantages have been diminishing.
A weak manufacturing sector may drive up unemployment rates, he said. Industry needs to be supported to ensure the employment and welfare of ordinary people.
Fuyao Group has been the largest vehicle glass manufacturer in China for many years, and it had a 60 percent domestic market share in 2007. But it only had a 3 percent global market share at that time, which made going overseas its only path.
The documentary American Factory recorded that Cao’s factory in the US provided more than 2,000 jobs in the Rust Belt state of Ohio in 2014, by investing in a factory there that had previously been shut down by US carmaker General Motors.
Fuyao Glass America and its US subsidiaries realized revenue of 1.9 billion yuan ($265.6 million), up 13.7 percent year-on-year in the first half.
Newspaper headline: Manufacturing still cornerstone of Chinese economy: entrepreneur