HOW CHINA'S SUPPLY CHAINS AND INTEGRATED DEVELOPMENT LEADS TO MORE EFFICIENT AND STABLE PRODUCTION.

 Warwick Powell outlines what is happening with production in China...

'Equipment manufacturing forms the backbone of China’s ability to reproduce and expand its productive system. Its strengthening signals an expansion of the country’s autonomous capacity to generate and deploy new techniques. It also contributes progressively to greater internal coherence of the production system, reducing dependence on external technological inputs. Lastly, it points to a structural tendency toward increasing returns, because machinery production is subject to learning-by-doing, scale effects and cumulative technological improvement...China’s dominant sectors are shifting from heavy industry and construction to high-tech and equipment production, which inherently possess higher productivity potential and greater scope for cumulative learning. There’s still some way to go for these transformations to stabilise, in part because some of the key technological and scientific foundations enabling deep shifts in production coefficients remain in relatively infant or nascent states. I speak of, for example, advances in energy storage systems - whether they be hydrogen or sodium-ion solutions - or the development and application of AI technologies across production and circulation systems....Finally, we can note an unfolding structural advantage in that China’s integrated supply chain reduces costs at every production stage, enabling new techniques to diffuse rapidly through the system. This is not merely a competitive advantage, it is a structural one'.




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