A worker checks products made for the Southeast Asian market at a textile factory in Huaibei city, Anhui province. Xie Zhengyi / for China Daily

Tim Hanley, global leader of the Global Manufacturing Industry group of Deloitte Touche Tohmatsu Limited, says that China is driving efforts to bolster advanced manufacturing knowledge and capabilities.

"If China wants to climb up the pyramid of the manufacturing world, it has much to consider besides labor costs," he says.

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The best example is labor productivity, as Chinese workers generate just $14,200 worth of value per year, far below the global average of $33,000.

By comparison, German workers generate $43,300 worth of value per year. In terms of innovation capacity, China has 1,071 researchers for every million population. The global average is 2,980, while Japan's is 7,038, the highest.

China's poor performance in these areas has also led to a low score in "talent-driven innovation", which Deloitte says is a leading indicator of a country's competitiveness. China scored 5.89 in this category while Japan scored 8.14 and the US scored 8.94.

Global CEOs also feel that China's trade, financial and tax environment is less competitive than that of US, Germany and Japan. Though China's corporate tax is slightly lower than the global average, many CEOs think the government's non-tax revenues are not included. Some experts say if all hidden costs were considered, China's tax burden would exceed 40 percent.