Service-Driven Quality: Investigating Servitization'S Effects On Export Standards
Li Ming Chen
School of Business, Southeast University, Nanjing, China
Jing Wang
Assoc. Prof. Dr., Department of Management, Southeast University, Nanjing, China
Abstract
In recent years, China's manufacturing industry has been a cornerstone of its economic development and global trade dominance. Despite its impressive achievements in manufacturing value added and exports, there are significant challenges and vulnerabilities that demand attention. China's manufacturing export prowess has predominantly been in resource-intensive and labor-intensive industries, leaving it dependent on developed nations for the core aspects of the manufacturing value chain. Furthermore, China is grappling with demographic challenges, including a rapidly aging workforce, which erodes the traditional advantage of abundant cheap labor. By the end of 2021, China had officially entered the ranks of severely aging societies, with a substantial portion of its population aged 60 and above. This demographic shift presents a threat to the traditional labor-driven manufacturing model. Additionally, other countries like India, Vietnam, and the Philippines, offering competitive labor costs, have been seizing market share in manufacturing. Moreover, the "reindustrialization" policies in Europe and the United States pose further challenges as they limit China's access to high-end technologies. To overcome these challenges, China must transition away from a reliance on low-cost factors and explore avenues to enhance its international competitiveness in the long term. This necessitates a fundamental shift in the development approach, focusing on innovation, technological advancement, and value-added manufacturing processes to maintain its global manufacturing leadership.