Resources & market potential to boost manufacturing

China's role as the world's manufacturing hub has been dented amid mounting costs and Western multinationals relocating but the country's advantages in resources, regulations as well as market potential will continue to enhance its position as a key manufacturing base, said Gary Coleman, managing director of Global Industries at Deloitte Touche Tohmatsu Ltd, a global consultancy.

Compared with other manufacturing candidates, China is endowed with unique natural resources associated with manufacturing, such as rare earths, said Coleman.

These critical resources of basic industrial products are of increasing significance especially in emerging and fast-developing application fields like new materials and energy saving electronics, he noted.

"With these natural resources, China has two different options: export raw materials directly, or export after manufacturing. If China chooses the latter option, it may also seek some advantages in production," he said.

Another advantage is China's capital and financial market, which mobilizes large amounts of funds for investment.

The huge population and market opportunities are also in its favor, he noted. The urbanization call and a consumption-led economy transition are set to fully unlock consumption potential.

But to move up the value chain, it is necessary for even Chinese enterprises to seek lower-cost markets and devote more resources to research and development, said Kenneth DeWoskin, director of China Research and Insight Center at DTT.