Singapore, November 07, 2014

Leading businesses anticipate evolution to a higher-value, customer-centric approach according to new findings with regional significance

UPS (NYSE:UPS) announced today the release of the "Made in China 2.0" (MiC 2.0) Readiness Index. "MiC 2.0" represents a new era of innovation and collaboration for manufacturing in China. The Readiness Index, launched in collaboration with Caixin Media, is based on a survey of 1,000 Chinese export manufacturing panies, maps out a new path for Chinese export manufacturers. The survey results and related research have identified important traits which Chinese manufacturers exporting globally will need to adopt and the significant reforms they would need to undertake in order to retain leadership position in the manufacturing industry globally. The survey findings also show that while Asia is the most mon market for Chinese export manufacturers (73%), more than one half of the respondents plan to export to Western Europe and a third to North America.

"UPS is privileged to work closely with Chinese manufacturers in their challenging transition from 'Made cheaper in China' to 'Made possible in China'. The MiC 2.0 Readiness Index recognizes a major shift taking place in the Chinese economy that has regional and global importance," said Nando Cesarone, President of UPS Asia Pacific. "We see that a more customer-centric approach built on collaboration, industry-vertical solutions, and robust supply chain strategies will continue to be imperative for Chinese export manufacturers to pete globally. Change is happening and these latest findings show that those panies who adopt vital MiC 2.0 traits, including strong logistics partners, are more likely to outperform their petitors."

"The Chinese economy is evolving and a number of successful, though labour-intensive, Chinese manufacturers are now facing new challenges and need to transform and evolve. I believe the solution to this is a move towards high value-added sectors, and investing in innovation," mented Professor Huang Yiping of Peking University's National School of Development. "The MiC 2.0 Readiness Index provides an excellent edge to business owners looking to set up development strategies and improve their petitiveness. It is also helpful for government bodies engaged in policy making and for supporting the upgrade of the manufacturing industry in China."

Note to Editors

The MiC 2.0™ Readiness Index suggests that there are clear opportunities for Chinese manufacturers to improve their state of readiness for MiC 2.0. The research identifies four areas that Chinese export manufacturers need to address for continued success in the future:

  • Build a deeper and more nuanced understanding of customers' business, markets and environment
  • Elevate customer relationships to the level of true partnership - "their success is your success"
  • Use logistics to derive petitive advantage and deliver value
  • Build up internal capabilities for change

Ten priorities were identified under these four key areas, and the priorities represent the change in the mind-set and behaviour Chinese export manufacturers will need to display to remain petitive. The survey respondents' levels of recognition and implementation of the priorities were then measured to create the Readiness Index.

"We are proud to partner with UPS to present this new Index to Chinese manufacturers to help them develop better strategies for their business", mented Yang Daming, Publisher and Deputy Editor-in Chief of Caixin Media. "With solid findings and in-depth case studies, the "Made in China 2.0" Readiness Index provides Chinese business leaders with a framework to assess priorities and establish a practical roadmap towards transformation."

Key highlights from the "Made in China 2.0" Readiness Index include:

Manufacturers Must Innovate Continuously to Compete Internationally

The panies who participated in the survey were categorized into three groups - Leaders (8%), Followers (56%) and Laggards (36%) based on their performance in the MiC 2.0 Readiness Index. The research finds that being ready for "Made in China 2.0" has significant impact on their broader business performance.

Leaders are significantly outperforming their peers in profit (+16% more likely to have increased in the past year), revenue (+16%), market share (+15%) and productivity (+15%). Leaders are also more likely to have seen year on year increases in the level of business output (+15%), the level of employment (+27%) and the prices they charge (+23%).

MiC 2.0 Leaders Adopt a More Customer-centric Business Model and Have a Broader Global Footprint

Being Made in China 2.0-ready may also help panies reach a greater number of markets worldwide. The research shows that Asia is the most mon market for Chinese export manufacturers (73%). A large majority of Chinese manufacturers (76%) plan to increase their presence in Asia in the next two years, pared to more than half (52%) which plan to export to Western Europe, and a third which plan to expand in North America, Oceania, South America and Central America. This suggests the Asia is where the greatest growth potential for trade is.

The Made in China 2.0 Leaders have a much larger global footprint than other less-ready export manufacturers. They are more than twice as likely to sell their products in the emerging markets of Eastern Europe, Africa, the Middle East and North Africa, Oceania and Central America.

Moreover, those Leaders tend to have a customer-centric focus when considering strategies for future growth. They prioritize collaboration with customers on product innovation and increasing the knowledge of their customers' operating environment.

Retail Manufacturers and Shenzhen-based Manufacturers Topped the Index

The research also examined the performance of exporters across three key vertical sectors - retail, high-tech and automotive & industrial - as well as four key manufacturing regions in China: Chengdu, Qingdao, Shanghai and Shenzhen.

With a score of 52 out of 100 on the Index, exporters from the retail sector are most prepared for the new petitive environment. The fast MiC 2.0 transition is most likely due to them facing significantly more challenges than the other sectors to innovate and pete.

From a country-wide perspective, Shenzhen-based manufacturers, who scored 52 out of 100, are better prepared for Made in China 2.0 than their peers in other parts of China. They also displayed a higher level of recognition of the MiC 2.0 priorities.

Shenzhen-based manufacturers' engagement in reform may be seen as a response to the tougher market conditions that they face in terms of petition, business challenges and demands from customers, as pared to manufacturers based in other parts of China.

"UPS is well positioned to help Chinese manufacturers and their customers tap into the power of advanced global logistics in order to outperform the petition. We do this with our human talent, extensive global network and industry vertical expertise," said Richard Loi, President of UPS China. "The Made in China 2.0 Readiness Index is a new - and exciting - stage of our ongoing mitment to China's evolving generation of export manufacturing. To help propel this transformation, UPS will continue to invest in China as part of our long-term China growth strategy."

For more information about the Made in China 2.0 Readiness Index, please visit http://www.ups./mic, or follow UPS corporate Weibo and WeChat.

About the "Made in China 2.0" Readiness Index

The "Made in China 2.0" Readiness Index research was conducted by GMI (Global Market Insite,Inc.) on behalf of UPS and Caixin Media. A total of 1,000 senior decision-makers in export manufacturing panies across China were interviewed: Shanghai (31%), Shenzhen (24%), Chengdu (10%), Qingdao (10%) and other areas of China (25%). Respondents were drawn from GMI's online panel. To qualify for the study a respondent had to work for a pany that exported at least 40% of the value of the goods it produced and have senior decision-making responsibility within that pany. Interviews were conducted between July 24 and August, 6 2014.

About Caixin Media

Caixin Media Company Limited is a leading Chinese media group dedicated to providing financial and business news and information through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin Media aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms. Its flagship publication-Century Weekly has been internationally recognised as a leading business media magazine in China. For more information about Caixin, visit http://www.caixin.

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