Danfoss Group, the world's largest refrigeration industry, has launched a global refrigeration R&D and testing center in China, BMW Group has invested 20 billion yuan in large-scale upgrades and technological innovation at BMW Brilliance's Dadong plant, and STMicroelectronics has entered the Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone in Hetao, Shenzhen...... A number of foreign-funded manufacturing projects have landed in China, demonstrating confidence in investment in China.
China is the only country in the world that has all the industrial categories listed in the United Nations Industrial Classification, and its manufacturing industry accounts for about 30% of the world's total value added. In 2023, the overall scale of China's manufacturing industry will rank first in the world for 14 consecutive years, the export scale of industrial manufactured products will account for more than 20% of the global market share of manufactured products, and the export volume of "new three" products will exceed the trillion yuan mark for the first time. Whether in the traditional field or in the high-tech field, the gold content of Made in China has been recognized by the world, and the advantages of scale, clustering, networking and digitalization are more prominent.
Analysts pointed out that China's complete industrial system, R&D and innovation vitality, rich talent pool and other advantages are the gravitational pull of global manufacturing enterprises to invest in China. In the first quarter of this year, the actual use of foreign investment in China's manufacturing industry reached 81.06 billion yuan, of which the investment in high-tech manufacturing reached 37.76 billion yuan, accounting for 2.3 and 2.2 percentage points of national investment respectively over the same period last year.
In March this year, China issued an official document stating that it would continue to expand high-level opening-up and implement the full lifting of restrictions on foreign investment in the manufacturing sector. For global manufacturing enterprises, entering the Chinese market is undoubtedly walking with opportunities.
"Big and Complete" continues to provide stable supply
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On April 16, in Yiwu International Trade City, foreign businessmen from the United States were negotiating with merchants to purchase electric Gallic roosters, which are the symbol of France. As the countdown to the 2024 Paris Olympics begins, the production and sales of Yiwu related commodities are booming.
According to the World Bank, in 2010, China's manufacturing added value surpassed that of the United States for the first time, ranking first in the world. In the 14 years since, this figure has remained at the top of the world.
Chen Yongjun, a professor at Renmin University of Chinese and a distinguished professor at Guangdong University of Finance and Economics, told the China Report reporter that "large and complete" is the traditional and unique advantage of China's manufacturing industry, which is closely related to China's development characteristics. He said that China's economic take-off began with reform and opening up, especially after joining the World Trade Organization, China successfully integrated into the global production network, supplied to the world, and became the center of the world's manufacturing industry.
"If you look at the manufacturing itself, the most important thing is whether and how the product to be produced can be made." According to Jia Jinjing, a senior researcher at the Chongyang Institute for Financial Studies at Renmin University of Chinese, a basic feature of most products today is that they are becoming more and more complex and require more and more parts, which means that they must organize production efficiently and at low cost in an environment that can provide the vast majority of components.
The research team of the Development Research Center of the State Council once wrote an article about this time, explaining that China's manufacturing industry has strong supporting capabilities, and most materials and components can find suppliers locally, which forms a strong support for the rapid trial production and mass production of innovative prototype products. The division of labor and cooperation of large and medium-sized enterprises, coupled with digital and intelligent empowerment, has formed a number of industrial clusters with centralized product production, professional supporting facilities, mature industrial chains and efficient and collaborative manufacturing networks, which can not only meet the needs of large-scale standardized production, but also quickly respond to personalized customization needs.
Thanks to the advantages of "large and comprehensive", China has become a major manufacturing country and the world's largest foreign trade exporter, and has established long-term and frequent trade relations with more and more countries, and "Made in China" continues to benefit the world.
In the first quarter of this year, the mainland's exports to the "Belt and Road" countries as an example, the export value of 2.68 trillion yuan achieved an increase of 7%, electronic information, instrumentation, high-end equipment and other high-tech intermediate goods achieved double-digit growth, automobiles, home appliances, clothing and clothing accessories exports increased by 30.9%, 19.4%, 6% respectively, the export of photovoltaic products exceeded 30 billion yuan, solar energy, wind and other renewable energy generator sets exceeded 120,000 units, providing support for the industrial development and technological progress of relevant countries. Effectively align with the consumer needs of the co-construction countries, and support their energy transition and green and low-carbon development.
Chen Yongjun said frankly that the global trade pattern is currently undergoing deep adjustment, and the external environment of China's economy is suffering from geopolitical impacts, but it is not in line with reality to break away from Made in China. Foreign media previously quoted a Washington, D.C.-based think tank research report that although the United States and Europe intend to reduce their dependence on Chinese products, China's share of global manufacturing jobs will continue to increase in the coming decades. At the same time, manufacturing jobs in developed countries are likely to continue to decline, with the share of manufacturing employment in the high-income workforce falling from 11.4% to 8.3% by 2050.
An important force in stabilizing the global industrial and supply chains
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On May 7, 780 tons of Brazilian pulp carried by Sichuan Deyang Hangfa MTR Logistics Co., Ltd. were transported from Brazil to Deyang by the "Jianghai Railway" multimodal transport mode across 16,659 kilometers, realizing the one-stop logistics delivery of ultra-long-distance "door-to-door".
From April 14 to 16, German Chancellor Olaf Scholz, who visited China for the first time in less than a year and a half, visited Chongqing, Shanghai and Beijing with a German "business delegation" composed of government officials and heads of heavyweight enterprises such as Siemens, BMW, and Mercedes-Benz. Scholz's three-day stay in China was the longest number of days he has visited abroad since he became chancellor.
Industry analysts believe that Germany, as the center of the European industrial chain, is a big manufacturing country with China, and the industrial chain and supply chain of the two sides are deeply embedded and the market is highly dependent. Scholz hopes that through this on-site visit, Germany will show its willingness to deepen understanding and promote cooperation with China, as well as Germany's unwillingness to "decouple" from China.
"If a country wants to develop, it is impossible to sever ties with China in the industrial chain and supply chain." Chen Yongjun told reporters that although trade protectionism has a rising momentum and the global industrial and supply chain is evolving under the logic of accelerated reconstruction, China's dominant position will not be easily shaken, and China is still an important force in stabilizing the global industrial and supply chain, Scholz's visit to China is an example.
"Looking at the advantages of the industrial chain and supply chain, it mainly depends on what kind of share it occupies in intermediate products, rather than final products. Because the vast majority of foreign trade products are intermediate goods, accounting for 75% of the total global trade in goods, this means that most products are in the intermediate link formed for the production of other products. When further analyzing why the global industrial chain cannot avoid China, Jia Jinjing told the "China Report" reporter that in the 5052 product classification catalogs of the global customs code, China's output accounts for more than 40% of the world's first classification items, which means that other countries cannot bypass China.
In terms of supply chain advantages, at present, China has basically built a comprehensive three-dimensional transportation network with the rapid development and coordination of various modes of transportation, and has formed a distribution network with a national logistics hub as the core and regional logistics bases, logistics parks, urban distribution centers, and community terminal outlets as the support, achieving efficient operation. In 2022, the average cost of express parcels in China will be about 1.5 US dollars, which is significantly lower than that of relevant developed countries. The advantages of logistics cost and efficiency are obvious, and the combination of large-scale manufacturing to form a supply chain network has greatly enhanced the market responsiveness of China's manufacturing industry.
On March 25, at the 2024 annual meeting of the China Development Forum, "Symposium on Opportunities for China's Sustainable Development and International Cooperation", Jin Zhuanglong, Minister of Industry and Information Technology, said that China's industrial chain and supply chain are constantly formed and developed in the process of in-depth participation in the global industry, and China will continue to expand high-level opening-up, fully cancel foreign investment access restrictions in the manufacturing sector, deepen cooperation with enterprises around the world, and jointly promote the optimization and upgrading of industrial and supply chains.
The interviewed experts all mentioned that in recent years, China has focused on improving the modernization level of domestic industrial and supply chains, and stepped up efforts to cultivate advantages in key areas. "To improve the modernization level of the industrial chain and supply chain, the most important thing is not what enterprises should do at the micro level, but the overall infrastructure and industrial environment to keep up." In Jia Jinjing's view, the core is to improve the overall level of digital infrastructure, China has the advantage of big data, and has also moderately advanced the construction of 5G, computing power and other information facilities, and the government and enterprises have also shown enthusiasm in the layout of future industries in advance.
Global Sources, a world-renowned international trade online platform, recently published a long article on its website, saying that China has invested heavily in R&D in recent years, promoted the upgrading of traditional industries and expanded to high-value manufacturing, and continued to promote the development of innovation and advanced manufacturing technologies, including automation, robotics and artificial intelligence, which has greatly improved the productivity and quality control of Chinese enterprises. "China's manufacturing sector remains an important driver of China's economy and an integral part of the global supply chain."
New quality productivity empowers manufacturing industry to be "big and strong"
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This is the first new intelligent heavy-duty electric locomotive in China (right) taken on May 9 (drone photo). On the same day, the first new intelligent heavy-haul electric locomotive in China jointly developed by the National Energy Group Shuohuang Railway Company and CRRC Zhuzhou Electric Locomotive Co., Ltd. officially rolled off the assembly line in Zhuzhou, Hunan.
On April 15, the first phase of the 135th Canton Fair with the theme of "advanced manufacturing" opened, at which a number of intelligent and innovative industrial manufacturing products empowered by new quality productivity emerged. Also opened in mid-April, the 4th CICGF featured a series of products and solutions related to typical formats of new quality productivity to stimulate new consumer demand.
At present, the key word in China's economic development is "new quality productivity". With the help of the in-depth application of digital technology, through scientific and technological innovation, industrial upgrading and green transformation, new quality productivity has been formed in practice, which will promote China's manufacturing industry from "big" to "strong" and create new competitive advantages.
"After the empowerment of new quality productivity, it can trigger changes in almost all manufacturing fields, including traditional industries and high-tech industries." Jia Jinjing took China's foreign trade "new three things" in the "fist product" new energy vehicles as an example and then explained that the power grid determines the upper limit of the capacity of electric vehicles, and relative to the power consumption of the car, the capacity of the power grid is unlimited, and physically, the principle of electrodynamics means that the controllability is higher, which will make electric vehicles more energy-saving and green than traditional fuel vehicles, and can also realize the functions that are difficult to break through by traditional fuel vehicles, such as automatic driving, or add many functions that do not belong to the car. For example, turning the car into a mobile "home".
It is found that since the "new quality productivity" was first proposed in 2023, it has been hot. The Central Economic Work Conference held at the end of last year stressed the need to promote industrial innovation through scientific and technological innovation, especially the use of disruptive technologies and cutting-edge technologies to give birth to new industries, new models, and new kinetic energy, and develop new quality productive forces.
The policy documents that continue to increase provide guidance for the high-quality development of the manufacturing industry empowered by new quality productivity. In January this year, the Ministry of Industry and Information Technology and other seven departments issued the "Implementation Opinions on Promoting the Innovation and Development of Future Industries" to support enterprises to actively open up new fields and new tracks and accelerate the development of new quality productivity.
In terms of the development of traditional manufacturing industry, the Ministry of Industry and Information Technology and other 8 departments jointly issued the "Guiding Opinions on Accelerating the Transformation and Upgrading of Traditional Manufacturing Industry" in December last year, from "accelerating the empowerment of digital technology, comprehensively promoting intelligent manufacturing", "strengthening green and low-carbon development, and in-depth implementation of energy-saving and carbon-reduction transformation" and other aspects of a series of clear measures, proposing that by 2027, the high-end, intelligent, green and integrated development level of traditional manufacturing industry will be significantly improved, and the proportion of the manufacturing industry will be effectively supported to remain basically stable. The position and competitiveness in the global industrial division of labor have been further consolidated and strengthened.
According to public reports, the reporter found that all localities also rely on their respective industrial advantages to vigorously promote the development of the manufacturing industry and accelerate the formation of new quality productivity. At present, Henan has issued an implementation plan for accelerating the "six new" breakthroughs in the manufacturing industry, Jiangxi has issued an action plan for the digital transformation of the manufacturing industry, and Guangdong has issued a work plan for the demonstration action of service-oriented manufacturing.
The market votes with its feet. According to a survey released by the China Council for the Promotion of International Trade (CCPIT), more than 70% of the surveyed foreign companies in the first quarter are optimistic about the development prospects of the Chinese market in the next five years, an increase of about 3.8 percentage points from the previous quarter, and more than half of the surveyed foreign companies expect the profit margin of investment in China to increase in the next five years, and the proportion of surveyed foreign companies with capital increase plans in China is expected to increase by 2.1 percentage points from the previous quarter.
"As China's economy transitions from a traditional economy to a dynamic new economy, we see great potential in sectors such as renewable energy, battery production and new energy vehicles." Standard Chartered Group Chief Executive Officer Victor Wen said that they are optimistic about the long-term prospects of China's economy and will develop together with China for a longer period of time in the future.
Foreign media also spoke highly of the "new" force of China's economy. AFP believes that China has a significant advantage in attracting foreign investment, from the perspective of industrial structure, with the continuous development of electronic technology, new energy, semiconductors, and intelligent technology, these frontier areas are giving birth to new quality productivity, which can become a new growth point for China to attract foreign investment; From the perspective of industrial base and domestic demand potential, strong industrial support and integration capabilities and high-quality personnel will provide strong support for the development of foreign enterprises in China.
Written by: Chen Ke, reporter of China Report
Image source: Xinhua News Agency, Chao News
Editor-in-charge: Zhang Lijuan
Editor: Zhao Jun, Xu Hao