China: the world's top manufacturing nation

While the United States of America has enjoyed premier position as the world's top manufacturing nation for over a century, this prestigious spot is now claimed by China. According to a report by the American consultancy firm HIS Global, the 110-year reign US came to an end in 2010. While American manufacturing output accounted for 19.4% of the global total, this figure was eclipsed by China, who enjoyed a 19.8% the share of the market.

Traditionally, China's manufacturing base has been dependent on relatively cheaper products, like appliances and textiles, with American companies producing higher denomination groups such as aircraft, medical and scientific equipment, industrial machinery and media industry-related items. In recent times there has been a seismic shift in China's manufacturing potential. While recognising the continuing appeal of the traditional output, especially for emerging countries, China is increasingly embracing the latest technological advances and innovations.

Partially driven by its strong trade links with Japan, a nation which has been at the forefront of technological innovation for some time, Chinese manufacturing output is now spreading into all manner of contemporary areas. Advances in the way the pharmaceutical industry operates in China have led to a boom in drug research and other health-related scientific investigation. This has prompted increases in the production of many drugs and medicines previously seen as a sector dominated by Western companies.

Another area where there have been change is in electronics. China has long been dominated by foreign owned firms. Again, this is a situation which is evolving constantly changing as China continues to forge its own identity in potentially lucrative global markets.

Economic historians have stated that China enjoyed around a third of the world's manufacturing output in the mid-19th century. By 1990 this had dipped to 3%. However, China has been successfully utilising its labour cost advantage and manufacturing skills to attract considerable overseas investments. This has created a massive shift in the nation's manufacturing potential. Government subsidies have helped this situation considerably, helping to push resources towards a domestically based manufacturing sector.

China expands its fracking program

As the world's oil resources continue to dwindle, or be affected by the sometimes severe fluctuations provoked by the volatile political situations in the oil-producing regions, more and more countries are being drawn to natural shale gas exploration. China is currently one of the world's leading authorities on the technology required to source shale gas.

Hydraulic fracturing, or ‘fracking' as it has been termed colloquially, has been labelled with certain scaremongering stories. The process involves drilling down into shale rock and creating explosions which shatter the solid sedimentary seams in order to release the trapped natural gas. Afterwards, water, sand and other chemicals are injected into the fissure at high pressure, allowing the prized shale gas to flow from the well head. This is actually straightforward, compared to many of the potentially hazardous techniques having to be applied to extract fossil fuel from ocean beds.

As recently as a decade ago, the production of shale gas accounted for a very small percentage of any country's investment into drilling for gas. That has changed, with China becoming the world's leading power in this type of natural gas production. In fact, according to estimates, over the next two decades shale gas will account for a huge percentage of China's energy requirements. As China contains the planet's richest reserves, the production of shale gas is regarded as a potentially rewarding aspect of the country's resources extraction.

Of the many benefits to the Chinese economy, the fact that this type of natural gas is stored in such extensive pockets under China is one of the key incentives for the energy devoted to perfecting the fracking process. With a strong natural gas industry of its own, China will be less susceptible to the ebbing and flowing of the fossil fuel prices dictated by Russia or the Gulf states.

Geologists have estimated the recoverable reserves lying beneath Chinese soil could be as high as 25 trillion cubic meters. The fracking of this fuel is of particular interest to Chinese engineers because it is such a viable alternative to the burning of coal, which currently accounts for around 70% of the nation's combustible energy. Since shale gas can generate electricity at 50% less greenhouse gas emissions than coal burning, this will be one way for China to considerably reduce its carbon footprint.

China and Arctic exploration

Extensive photographic surveys have confirmed what scientists have long been anticipating in terms of the rapid rate at which the Arctic ice is disappearing. However, what were previously regarded as polar wastelands are now being revealed as potential treasure troves for all manner of natural elements. Naturally, China is keen to take advantage of any of these pockets of oil, gas or other minerals as they become exposed.

The potential for drilling for elements of these Arctic treasures has turned the world's gaze on this frozen realm. Harnessing untapped resources has previously been an area where the Western powers have jockeyed for position, with the USA, Russia and some of the European Union nations all owning territory north of the Arctic Circle. While China has no such territorial claims, it has been deploying considerable wealth and diplomatic influence to bear in this vicinity.

According to Linda Jakobsen, the East Asia program director at the Lowry Institute for International Policy, in Australia: the Arctic has risen rapidly on China's foreign policy agenda in the past two years. She added that there has been considerable exploration by Chinese companies who were very interested to find out about becoming involved in tapping into the polar area's hidden wealth.

Last summer, China sent an exploratory ship across the Arctic Circle to Europe. The country is also lobbying for permanent observer status on the Arctic Council – the body of eight Arctic nations that develops policy for the region. Unlike the major nations that are making claims to the North Pole's potential mineral reserves, China has never occupied large swathes of territory in other lands, having abandoned any colonial aspirations long in its history. It is therefore free of any of the labelling of ‘exploitation' often aimed at Western companies making territorial claims so far from home. In the words of China's State Oceanic Administration, the Arctic is the inherited wealth of all humankind.

As part of its diplomatic endeavours, both with improving its bid to join the council, and in establishing stronger relations with other Arctic nations, Chinese ministers spent much of the summer visiting Denmark, Iceland and Sweden. During this time they managed to broker several lucrative trade deals. There have also been high-level diplomatic visits to Greenland, a location where Chinese companies are already investing heavily in the mining industry.

One reason for the considerable interest in the types of mineral deposits available in the polar region is the fact that the retreat of the ice cap has exposed coveted mineral deposits, such as rare earth metals. These are crucial for cellphones and military guidance systems.

Four major Chinese market trends for 2013

As China enters the New Year it will certainly be consolidating its current position as one of the leading economies in the world. The nation is in the middle of a crucial transformation of its economy. There are many outside factors that will have an impact on this, from the impact of global trends to its internal environment, to the effects of government policies and scientific research.

1. Training As the Chinese economy gathers momentum in 2013 there are several major factors that will have considerable impact. First of all, the need for professional training solutions will transform the number of businesses which are performing effectively. Training is a vital component of any commercial enterprise. Failing to allocate sufficient energy or funds to establishing a comprehensive training plan are detrimental to the way any businesses perform. This is being increasingly recognised right across the board, and there is every indication that Chinese firms will continue to embrace the need to provide a rigorous tailored training platform for employees. During 2013 the number of schools and academies specifically designed to promote business understanding and professional expertise is set to increase.

2. Brand names Because the rest of the world is opening their collective eyes the potential of the Chinese economy, another great trend forecast for the year is the fact that branded applications, such as iPod for Android, will continue exploring the potential of investing in China. There is likely to be a steady rise in brand expansion over the following six months as key firms seek to develop both the employee and sales potentials within the country.

3. Online shopping 2013 is likely to see an explosion in the online shopping market in China. As consumers become ever more aware of what internal and global markets have to offer, the sheer convenience of comparing prices and then making purchases from the comfort of homes will see more and more big name retail outlets targeting China.

4. Pharmaceuticals The pharmaceutical industry will continue to prosper in China this year as the health industry continues to modernise, embracing both high-end chemical research and affordable drug prices. With the logistics of the supply and distribution of prescription drugs becoming ever more sophisticated, the whole field of biotechnology is set to continue expanding rapidly during 2013.