The Prompted by fast-rising wages, the graduation of China from labor-intensive manufacturing has opened up a golden window of opportunity for the other low-wage Southern countries to kick-start industrialization by attracting Chinese labor-intensive light manufacturing sectors. In this paper, we aim to diagnose challenges faced by Southern countries to seize the opportunity presented by Chinese industrial transfers to kick-start and speed up their industrialization process.

The miraculous economic development over the past forty years has transformed China from a poor and backward country into a prosperous and industrialized nation. As China will soon join the ranks of high-income economies classified by the World Bank, mass production of labor-intensive manufacturing may no longer be viable and industrial upgrading to higher value added economic activities is needed to carry forward China's growth in the future. The challenge of a successful structural transformation posed for China also presents a golden opportunity for other developing economies, as they are, given abundant supply of labor, well suited to take over low-skill labor-intensive manufacturing from China. Due to the scarcity of data, the current state of manufacturing relocation from China remains underexplored. By looking through a wide array of "outcome variables" of relocation based on publicly available data and first-hand information gathered through field research, this report evaluates the scale of overseas relocation of Chinese manufacturing production, both from a conceptual point of view and an empirical point of view.