Three historical experiences to guide the industrial chain to stay in China

In recent years, economic globalization has encountered adverse currents, and countries have stepped up control of their own key industrial chains to promote localization production. The outline of the mainland's "14th Five-Year Plan" proposes to "guide the key links of the industrial chain to stay in China", which is a new task under the new situation and has historical experience to follow. The establishment of "mother factories", the transfer of domestic industries, and cross-border labor cooperation have in fact played a role in keeping the industrial chain in China. The Planning Institute of CCID Research Institute summarized the experience points of the three methods and domestic and foreign cases, and believed that in the future, it should play its role more consciously and purposefully, combine these mature layout strategies with accurate policy design, and reduce the loss of the industrial chain and key links.

First, the establishment of a global "mother factory" in China

The "mother factory" originated in Japan, which is an important model for large multinational enterprises to avoid the "hollowing out" of local industries under the situation of global layout, and the Japanese government has firmly controlled the global advantages of its own industrial chain in this way for a long time. Drawing on its experience, if representative enterprises or enterprise groups with ecological dominance in important industries or key fields in the mainland have built similar "mother factories" and effectively play relevant functions, they can minimize the risk of loss abroad in important domestic industrial chains and key links.

Lessons learned. The key to the "parent factory" model is to adhere to the locality, spillover and control ability of the "mother factory". One is a permanent layout in the local area. The "parent factory" is the core node of the global enterprise, no matter how large the scale of the multinational enterprise, the location of the "parent factory" will never leave the local area. The second is to control key manufacturing capabilities. The "parent factory" is large in scale, rich in product lines, and rapid production adjustment, and is generally responsible for the production of key core components and high value-added products. The "parent factory" carries out design and development and small batch manufacturing for high quality, high difficulty and new products, and standardizes the production process. The third is the mother of technology overflow. With the highest technical level of the whole industry chain, control the leading power of research and development, continue to provide key technologies, core components, senior talents and other support for the global "sub-factory", the standardized production process also spreads to the "sub-factory", is the "hub" of the entire enterprise group.

Examples from abroad. As a large multinational automobile manufacturer in Japan, Nissan Motor owns many well-known brands such as Nissan and Infiniti. The Chaibin Plant is Nissan Motor's domestic "parent plant" and covers an area of 1.7 million square meters. The plant is the first in the industry to achieve highly automated passenger car assembly, with an R&D and design center, vehicle testing ground and dedicated terminal to meet the various testing needs of Nissan engineers around the world.

Domestic practices. Huawei is a leading global supplier of information and communication infrastructure and smart terminals, with approximately 197,000 employees and operations in more than 170 countries and regions. Dongguan Songshan Lake Base is Huawei's world's largest R&D and production base, covering an area of 2 million square meters, is Huawei's terminal headquarters and its new "mother factory".

Second, the gradient transfer of domestic industries

General Secretary Xi Jinping proposed that the transfer of domestic industries should be regarded as an important way to retain the key links of the industrial chain. In response to the Yangtze River Economic Belt, he pointed out that it is necessary to "promote the coordinated development of the upstream, middle and lower reaches, guide the orderly transfer of capital, technology and labor-intensive industries in the downstream areas to the middle and upper reaches of the region, and retain the key links of the industrial chain."

Lessons learned. Match the industrial technology gradient with the regional development gradient, and orderly promote the transfer of industry from high-gradient areas to low-gradient areas, so as to delay the trend of industrial chain relocation and realize the retention of the industrial chain in China. The first is to maintain an appropriate gradient gap. High-gradient areas prevent industrial structure aging through innovation, and low-gradient areas gradually develop and upgrade from primary industries, and the potential energy gap between the two remains dynamic and moderate, so as to transfer and undertake low-end technologies or industrial spillovers. The second is to form a comparative advantage in the place where it is undertaken. Under the conditions of globalization, domestic undertaking areas are facing competition with foreign countries, and it is necessary to create relative competitive advantages in terms of resources and energy, land use and employment, and industrial ecology, improve the industrial undertaking capacity of low-gradient areas in China, and avoid excessive relocation of the industrial chain. The third is to establish a regional linkage development mechanism. Through market traction and policy promotion, a linkage mechanism is established between regions with different levels of development and between the upper, middle, and lower reaches of river basins to guide the orderly transfer of capital, technology, and labor-intensive industries.

Examples from abroad. In the 1950s, heavy industry in Tokyo, Japan, recovered strongly, and by the 1960s, Tokyo's manufacturing output accounted for half of the Tokyo metropolitan area. Due to the excessive concentration of industry, population, and resources, Tokyo began to implement the "industrial dispersion" strategy, and transferred a large number of general manufacturing industries such as mechanical processing, electrical production, and petrochemical steel with excessive land area, low production efficiency, low industrial level, and strict logistics requirements to Kanagawa Prefecture, Saitama Prefecture, and Chiba Prefecture, which are not far away.

Domestic practices. Over the years, the mainland has done a lot of work in terms of industrial gradient transfer. For example, the "Industrial Transfer Guidance Catalogue" is issued and rolled, guiding the development direction of key industries in various regions according to industry fields, promoting the rational and orderly transfer of industries, and optimizing the layout of industrial productivity.

3. Cross-border (cross-border) labor cooperation

Carrying out cross-border cross-border labor cooperation, especially along the border, aims to give full play to the respective industrial advantages and labor advantages of the two countries, especially the geographical proximity of border areas, rebound the pipa in the "going out" of industries and the "introduction" of labor, and realize the "stay" of the domestic industrial chain by introducing low-cost labor from other countries (especially neighboring countries).

Lessons learned. Focusing on cross-border labor cooperation in border areas, summarizing its main points. The first is to lay out labor-intensive industries along the border. Primary manufacturing, processing trade, etc. are sensitive to labor costs, and the border areas of the country need to combine local natural resources to lay out the deep processing of agricultural products, the production of electronic components, and the landing processing of imported products to achieve the development of local characteristic industrial chains. The second is to take advantage of the rich "demographic dividend" of neighboring countries. The border areas of neighboring countries are generally underdeveloped in economy, lack of manufacturing industry layout, relatively abundant labor resources, large gap between labor costs and domestic labor, and workers bear hardships and stand hard work and have strong environmental adaptability. The third is to establish a cross-border labor cooperation mechanism. It is required that the political and economic and trade relations between the two countries be normal and have a deep historical origin in labor transportation, and the two sides need to sign official documents, establish a cross-border labor cooperation coordination mechanism, and coordinate to promote cross-border labor cooperation models, policies and management affairs.

Examples from abroad. Japan and the Philippines carry out cross-border labor cooperation in order to solve their labor shortage and prevent the relocation of the industrial chain. Japan and the Philippines signed a memorandum of understanding on labor services, relaxing the scope of work visas for Filipino workers and including low-skilled jobs in 14 industries, including construction machinery, electronics, food manufacturing, and construction maintenance, solving the problem of insufficient labor in labor-intensive industries.

Domestic practices. From a worldwide perspective, the mainland has been the most outstanding and effective in implementing cross-border labor cooperation in border areas. For example, Guangxi and Vietnam have carried out cross-border labor cooperation, realizing the introduction of labor and the retention of characteristic industrial chains.

Author 丨 SADI Think Tank