China-US Trade Dispute: Chinese company says it could come out stronger

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02:18

The ongoing China-US trade dispute is having an impact on a lot of businesses, but it's not all negative, as this Chinese manufacturing company in the Pearl River Delta region can attest to. CGTN's Sun Ye has this report.

By the end of this year, even this will be gone. There will be a dramatic decline in the amount of manpower at this factory which, only a year ago, had about one-thousand people producing LED lights and components. Fewer than 100 will remain on the floor.

MICHAEL LU DEPUTY GENERAL MANAGER, LTS GROUP "So what you see here at the site is actually just a transition process, so by the end of the year we plan to place new automated manufacturing line."

It's also outsourcing parts of its manufacturing to places like Vietnam, and relying on its brainpower from its headquarters in Shenzhen.

MICHAEL LU DEPUTY GENERAL MANAGER, LTS GROUP "You must make it happen. And we decided to accelerate the change from labor intensive, low profit margin manufacturing to design-focused, high value-added activities."

He said change is good.

MICHAEL LU DEPUTY GENERAL MANAGER, LTS GROUP "I think the process is good for China, it forces us to move up the value chain and become a lot more competitive. Forces us to ditch OEM manufacturing, I think Companies coming out of this shift would be the good ones."

And it's not the only one. For years, the Pearl River Delta region, long a manufacturing hub has been working to move upward the value chain, becoming leaner and smarter.

HUO JIANGUO, FMR. PRESIDENT CHINESE ACADEMY OF INT'L TRADE & ECONOMIC COOPERATION "There has been pressure, but our businesses are competitive enough to weather the recent trade tension, especially those higher in the value chain. And our companies will continue to trim costs and sharpen their own edge."

And as Lu anticipates, it will come out of it even stronger. Sun Ye, CGTN, Guang Dong PROVINCE.