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The outdoor furniture industry in China has achieved fast growth during the past two decades with a traditional focus on low-cost commodity-style production. Recent developments suggest that Chinese manufacturers are now seeking new advantages through innovations in the areas of processing, products, and business systems. China is reported to have become the number one buyer of furniture working equipment among Asian countries. By pursuing automation, Chinese manufacturers have been able to save at least *0 percent of total production costs. Robb and also state that saving costs is the motivation for the Chinese furniture manufacturers to adopt technologies. Mass customization, a practice recommended as a way for U.S. manufacturers to increase their competitiveness is being tried by some Chinese manufacturers located in the Guangdong region. New product development is also being increasingly pursued by Chinese furniture manufacturers. According to a recent study current innovation activities within the Chinese furniture industry are mainly based on incremental improvements of existing products and technologies, rather than aggressive breakthroughs. This can be attributed to the industry’s traditional low-cost/low-profit production philosophy and the limited resources they have for innovation investments. Still, respondents to the survey felt that innovation would increase significantly during the next decade, resulting in sources of competitive advantage beyond the tradition of low costs.