Change underway: “Made in China” to “Created in China”

INTRO

Chinese products are often stereotyped as being low cost and poor quality.

But the country's manufacturing is reinventing itself - by fostering innovation, to produce more sophisticated goods.

Now, "made in China" is shifting to "created in China". We now take you to Yiwu, a major manufacturing city in Eastern China, to see the change underway there...

Entrepreneurs from eastern China's Zhejiang Province are known for their business savvy - and for finding opportunities, in every challenge...

In particular, those from Zhejiang's iconic small-commodity hub, Yiwu.

Every year, products made by Yiwu's 10 million workers are sold worldwide.

Cheng Qiyao used to be a salesman in the garment industry.... Until he started a business, by opening his own shirt factory...

SOUNDBITE (CHINESE) CHENG QIYAO, Manager of Yiwu Xieshou Clothing Co.:

"At that time most of my customers just asked for clothes with common design and quality... But since the second half of 2010, my profits began to drop, as prices were low. In addition, labor costs grew and RMB appreciated. So the more we produced, the more we lost."

But with exports to the U.S. and European market down following the global economic slowdown, Cheng decided to focus on quality over cost... To boost his business, in China:

SOUNDBITE (CHINESE) CHENG QIYAO, Manager of Yiwu Xieshou Clothing Co.:

"... I realised the company had to change. In 2011, I spent nearly a million U.S. dollars in upgrading equipment and training workers.

SOUNDBITE (CHINESE) ZHANG FENG, Worker of Yiwu Xieshou Clothing Co.:

"We adopted stricter quality inspection procedures. There used to be only one inspection step for end products, but now from semi-finished to end products, every stage is monitored."

Upgrades that have called for more expensive material...

SOUNDBITE (CHINESE) WANG JIANMIN, Designer of Yiwu Xieshou Clothing Co.:

"Now our designs and styles are more complex and diverse. Also we use better textiles, normally pure cotton, over polyester."

But though input costs are rising, Cheng's company is reaping more profits, than ever before...

SOUNDBITE (CHINESE) CHENG QIYAO, Manager of Yiwu Xieshou Clothing Co.:

"We have many big clients now, including Pierre Cardin, Cartelo and G2000. So our added value grew tremendously. We also combine Chinese elements with global trends to develop our own design, which is favored by our customers..."

At Yiwu's International Trade Market, similar changes can also be seen.

The cheap merchandise that used to dominate the market, have been replaced by more exquisite, creative products.

Wu Shuyan, one of the earliest self-employed businesswomen making in exports in Yiwu, says she's more confident in her products now:

SOUNDBITE (CHINESE) WU SHUYAN, Manager of Yiwu Yanhua Handbag Co.:

"A few years ago, products with a 'Made in China' tag were considered as cheap in price but poor in quality. But with several years' efforts, our products began to catch up, and now 'Made in China' means something both good and affordable... and is being well-received around the world."

The perception of higher-end Chinese manufacturing was seen on the international stage, last year...

Official statistics show more than 50 percent souvenirs at the 2012 London Olympics, were made in China - mostly in Yiwu.

As Chinese manufacturing transforms... with higher-tech and higher-value products now fast replacing 'made in China,' with 'created in China'.