The latest research shows that labor production efficiency is becoming a new competitive advantage of China's manufacturing industry, and this trend makes China's manufacturing production base gradually shift from the southeast coastal areas to the central provinces.

On December 16, the Economist Intelligence Unit released the "Advantage Still - China's Manufacturing Labor Cost Analysis", which showed that the average annual income growth rate of China will remain around 12% in the next six years, which means that the advantage of price competitiveness will not be enough to maintain China's manufacturing advantage in the world for a long time.

The publisher of the above report told the reporter of the Daily Economic News that at present, domestic manufacturing enterprises are looking for provinces with higher labor productivity as new production bases, and central provinces such as Anhui, Henan and Jiangxi will become emerging places for manufacturing production in China. In the next six years, the average annual income growth rate of the country will exceed the GDP growth rate and maintain at about 12%. The publisher of the report said that this was mainly due to the reduction of labor supply, the improvement of the minimum wage standard and the improvement of the negotiation ability of employees' wages.

The above trend will lead to the labor cost of China's manufacturing industry reaching 177% of Vietnam's labor cost and 218% of India's labor cost in 2019. This means that labor cost competitiveness alone is not enough to maintain China's global productivity advantage.

Based on this, experts from the Economist think tank said that the competitiveness of China's manufacturing industry will rely more on labor productivity and more effective supply chain infrastructure capabilities.

"Since 2007, the growth trend of real manufacturing labor productivity has slowed down, while the real manufacturing income has maintained the growth momentum. In the five years from 2008 to 2012, the growth rate of income has exceeded the growth rate of labor productivity in four years. This phenomenon shows that China needs to rapidly improve its position in the value chain." said Tom Rafferty, China economist at the Economist think tank. At the same time, the above report shows that with the narrowing of the labor cost gap in the manufacturing industry, China will emerge as an emerging place for manufacturing production. According to the report, the growth rate of workers' income in Anhui and Henan will remain stable from 2013 to 2020. As the rural labor force in the region becomes increasingly large, more workers choose to work nearby, and the labor supply tends to be stable, which will greatly attract labor-intensive manufacturers to gather. At the same time, weak local demand in provinces with commodity-driven economic growth, such as Inner Mongolia and Hebei, will also slow the growth of labor income. Jiangxi, Henan and Shandong provinces have become the choice of manufacturing enterprises because of their relatively low labor costs, adequate labor supply and perfect infrastructure.