|Driving China's rapid economic growth were the country's exports, valued at US$1,897 billion in 2011, a solid 26% of the country's gross domestic product ("GDP"). Between 2001 and 2011, China's GDP had recorded a compound annual growth rate ("CAGR") of 18.6%, reaching US$7,296 billion in 2011. The country's growth in exports was underpinned by the availability of a mass labour pool and low labour costs. However, in the wake of rising wages and inflation, high-profile labour incidents and disputes, many believed that this model of low-cost manufacturing would not last in China. This research note sketches the current state of affairs in China's manufacturing industry, using contract manufacturing as a focus to examine the changing dynamics in China's labour market, and elucidate the critical social, economic and political forces shaping the future of China's manufacturing industry.