Chinese manufacturers losing cost advantages over US: report

Inspire 1, an unmanned aerial vehicle model developed by Shenzhen DJI Technology Co. [Photo provided to China Daily]

WUHAN - China's manufacturing industry is losing out to the United States in terms of its cost advantage, a new report has suggested.

Prices of energy, logistics and some raw materials in China have surpassed those in the United States, according to the 2015 China Purchasing Development Report, released on Thursday by the China Federation of Logistics and Purchasing.

The report said that the United States has slashed its energy costs with exploitation of shale gas, increasing the competitiveness of American manufacturers.

"Many raw materials are cheaper in the United States," the report said. "For example, US cotton is 30 percent cheaper than that in China." It also pointed out China's price disadvantages with statistics in sectors including logistics and industrial land.

Citing a survey by the Boston Consulting group, the report said the cost advantage of China's manufacturing industry over the United States has plummeted to 4 percent in 2014 from 14 percent in 2004.

"If the trend continues, China's cost advantage in manufacturing could be completely wiped out by 2020," the report predicted.

It suggested China steps up innovation and relies on made-in-China equipment and Chinese brands to sustain growth in the future.