Silent revolution of 'made-in-China'

At the lower end of the value chain, China is losing its edge as surging wages and rising currency rates darkened the prospects of low value-added goods.

"We paid junior workers 700 to 800 yuan per month in 2005. Now we have to give them more than 3,000 yuan," said Lai Jushan, a senior manager of Hersun Plastics in Dongguan, Guangdong province, China's manufacturing hub.

Minimum wages have doubled since 2005 in Shenzhen, a metropolis bordering Hong Kong.

Adding to the across-board wage rises, the rising Chinese yuan has also eroded the profit margins of China's low-cost industries. The yuan appears to be on track to break the 6 yuan per US dollar mark in 2014.

The yuan has risen more than 36 percent since the currency's landmark revaluation in 2005, taking a toll on Chinese exporters.

Upgrading has since become a necessity for export-oriented enterprises.

"It is a matter of life or death," said Wang Mingxin, general manager of Zhejiang Xinle Textile & Chemical Fiber Co Ltd. "We must upgrade, with a particular emphasis in research and development," Wang said.

"About 90 percent of our staff used to work in the manufacturing department. In the future, we expect only 40 percent to work in manufacturing, and the others in development and design," Wang said.

"China's manufacturing sector has broadly been able to deal with the wage increases and appreciation of the currency that are part of successful development and rebalancing, " Kuijs said. "It is well-placed to continue to upgrade its industrial structure and raise the share of medium and high tech products in its exports."

Analysts expect Chinese exports' growth to pick up moderately in 2014.

"Brushing aside the noise, we think the recovering global economy would reduce growth downside risk in 2014," said Citi Senior China Economist Ding Shuang.

"Trade surplus and near-term capital inflow may lead to further appreciation of the Chinese yuan, but capital inflow may decline or even reverse following the US tapering and further opening of the capital account," Ding said.