The Chinese manufacturing industry is fourth among the manufacturing industries of the world, behind the USA, Japan and Germany. It is a highly important industrial sector in China, producing 44.1% of GDP in 2004 and accounting for 11.3% of total employment in 2006. Machinery and transportation equipment have been export mainstays, as China's leading export sectors for the past 11 years from 1996 to 2006. In 2006, the export value of machinery and transportation equipment reached US $425 billion, a 28.3% increase from 2005.
The six predominant industries in the manufacturing industry in China are petrochemicals, metallurgy, forestry, medicine, food and machinery. However, the electronics industry, medicine and the food segments have recently been rapidly gaining popularity. The year 2000 witnessed these industries, namely, medicine, food and electronics industries accounting for 14.7% of industrial yield. China's cotton textile industry is the largest in the world, producing yarn, cloth, woolen piece goods, knitting wool, silk, jute bags, and synthetic fibers. In addition to garments and textiles, output from light industry includes footwear, toys, food processing, and consumer electronics. China is also the world's biggest sex toy producer, with 70% of the worldwide sex toys production, generating about two billion dollars a year.
The manufacturing industry forms the backbone of the Chinese economy. Following China's entry into World Trade Organization in 2001, China has enhanced productivity by leaps and bounds. However, China is still lagging behind the developed countries in many areas of its manufacturing, despite the rapid increase in output. Technical standards of Chinese manufacturing industry are catching up, through a combination of simply copying designs and joint ventures with foreign companies. As China rises the value-chain in manufacturing, low valued-added jobs are leaving the developed seaboard cities (such as Shenzhen and Hangzhou) for inland provinces where wages are lower.