Apprehensions are also growing in industry circles that the floating and shrinking labor force would soon become a grave threat to Chinese companies as they look to make rapid strides in global competitiveness.

"A foreign diplomat recently told me that Chinese products are facing the same challenges that Japanese and South Korean products faced earlier from China. The only difference is that the competition is now from other Southeast Asian nations," says Zhou Shijian, a senior trade expert at Tsinghua University.

The renminbi's appreciation against the US dollar has also been bad for the competitiveness of Chinese products, Zhou says.

"According to the research findings of a Japanese nonprofit trade institute, the average monthly wages for a worker in Guangzhou is 1,850 yuan ($295, 224 euros), while it is 752 yuan in Vietnam. With such a huge gap, China may find it difficult to compete with other Southeast Asian nations in low-end products," Zhou says.

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The 2013 Global Manufacturing Competitiveness Index, however, paints a totally different picture. Most of the 550 chief executive officers and senior leaders of global manufacturing companies, who participated in the survey, admitted that China remains the top destination for manufacturing, and will retain its top ranking for the next five years.

Germany and the US were ranked second and third after China in manufacturing competitiveness. But both these nations could be replaced by India and Brazil over the next five years, the survey said.

Meanwhile, members of the American Chamber of Commerce in South China expect their investment budgets to total more than $16.5 billion over the next three years, an increase of 40 percent on the previous three years. These companies in the region expressed strong confidence in the market and in China's economic reforms, according to a survey published on Feb 26 in Guangzhou.

Ricky Tung, co-leader of the manufacturing industry group of Deloitte China, says the ratings suggest that China is now more of a developed economy competitor rather than an emerging economy player.

"In addition to supportive policies, China still has relatively lower labor costs and is above average in the attractiveness of its corporate tax rates. With its focused efforts to localize supply chains and create innovation hubs, China is also seen by CEOs as the only emerging economy offering the same supplier network advantages as developed economies," Tung says.

A closer look at how China has scored in each category of manufacturing competitiveness in this survey also indicates China's strengths and weaknesses. Among 38 countries, China ranked high in "cost and availability of labor and raw materials", "attractiveness of local market" and "government's investment in manufacturing and innovation". But China ranked low in "legal system" and "healthcare system".

With labor costs, which is a grave concern domestically, the study shows China's average cost ($2.8 per hour) is lower than most manufacturing powers. By comparison, Brazil's labor cost is $12 per hour while in the US it is $35.4 per hour.

Andrew Heath, director of the international marketing division of Shenyang Machine Tool Co Ltd, China's largest machine tool producer, says China's manufacturing strength lies more in its established supplier network.

"Those who are talking about relocating units do not know the basics of business. It is not so easy to relocate these plants," he says. "We need to have natural resources. We have to purchase and have a supply chain. Since we have the huge market here, why would I even consider moving?"