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In today's global economic pattern, Foxconn recently suddenly announced its withdrawal from the joint venture production plan with India's Vedanta Group, which has attracted widespread attention. However, this is not an isolated incident, and recently, well-known multinational companies including Apple, Intel and other well-known multinational companies have encountered various troubles in their investment projects in India. These problems seem to reveal that the US plan to encourage countries such as India and Vietnam to replace some of China's manufacturing industry has not gone as smoothly as expected. Next, we'll dive into the reasons behind this issue and its implications for China.
First of all, let us be clear that the investment difficulties of these multinational companies in India are not just a single event, but a product of a larger context. This background includes the Biden administration's initiative to provoke a trade war with China, the formation of an "Indo-Pacific" economic framework aimed at containing China, and the implementation of a "de-Sinicization" strategy of high-tech industrial chains. In this context, Indian Prime Minister Modi is actively preparing to "take advantage of China's crisis", planning to undertake part of China's production capacity and promote the "chip revitalization" plan. Therefore, the trouble encountered by multinational companies such as Foxconn, Apple, and Intel in investing in India is not only a setback to India's plan to catch up with China, but also a setback for the US strategy.
To understand why these plans are not going well, we need to consider China's unique strengths in manufacturing. First of all, China has workers who are deeply influenced by Confucian culture, with good professional skills and hard-working spirit. This workforce advantage is unique worldwide. Second, China has consolidated its position as a global manufacturing center, and its industrial supply chain and infrastructure construction level is far from reaching. Moreover, China has the world's largest single market and has huge potential. Finally, although there is still room for improvement in the investment environment, China's investment environment is still relatively favorable compared to other competing countries.
So why do these multinationals choose to invest in India? One obvious reason is the ideological Cold War mentality of the United States in recent years. Because of the differences in ideology and political systems between China and the United States, the United States encourages companies to diversify their investments to similar countries, such as India and Mexico, to reduce risk. In this mentality, many companies choose to put their eggs in different baskets to avoid possible political risks. However, the investment experience of Foxconn, Apple, Intel and others in India shows that not everything is going well.
Although these multinationals have suffered a setback in their investments in India, it does not mean that they will necessarily return to China. The United States plans to build a long-term production chain in the Indo-Pacific region aimed at reducing dependence on the PRC. This industrial chain will cover many countries, from Hokkaido, Japan, to South Korea, Taiwan, Southeast Asia, and eventually to India. Therefore, China still needs to be vigilant and not take it lightly.
In order to retain these multinationals, China needs to take a series of measures. First of all, China must continue to create an internal and external environment for peaceful development, and adhere to the concept of peaceful development even if the external environment is disturbed. Second, China should continue to actively integrate into the global industrial chain, especially in the field of chips, and work closely with international partners. Finally, China must unswervingly promote reform and opening up and make the investment environment more attractive. Only in this way can China maintain its position as a global manufacturing hub and attract and retain investment from multinational companies.
In short, the problems encountered by multinational companies such as Foxconn in India are not only an incident, but also part of the US strategy. China should remain vigilant, actively adapt to changes in the international situation, and continue to promote reform and opening up to ensure its competitiveness and attractiveness in the global economy. Only in this way can China steadily advance its position as a global manufacturing hub.
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