We talked about a topic before: China's economy's resilience is manufacturing, So when Western manufacturing begins to decline, can China continue to write about the glory of manufacturing? Accept production demand from Europe and the United States?
Can China's manufacturing industry continue to make its glory?
Is the future the era of China, or the golden period for development in India and Vietnam? Can China seize the opportunity to rise again?
Today, let’s discuss the future development of China’s manufacturing industry. coded words are not easy, welcome to like, forward and collect.
Can China take over the decline of Western manufacturing?
Why are there any problems in Western manufacturing? The main thing is that they made it themselves,
first look at European countries. Starting this year, with the intensification of geopolitical conflicts and the energy crisis in , the cost of European countries to manufacture their own commodities has increased significantly. After all, is now discussing how to reserve natural gas that is enough for the people to survive the winter. Basically, whether the factory can start construction is not considered.
Europe is in an energy crisis, small and medium-sized enterprises collapse
Let’s look at the United States again. The US manufacturing industry has been hollowed out for many years, and now The United States is full of high inflation crisis, poor supply chain, increased production costs, and excessive labor costs , which means that the cost of investing in and building factories in the United States will be very high, and the product competitiveness is insufficient.
Of course, there are so many old-fashioned companies in the West that they still have the need to build factories in the end, so for them, the easiest way is to use Western countries to generate technology and capital to build manufacturing factories overseas to achieve a win-win situation. This is the migration of Western manufacturing.
American companies moved out, Tesla came to China to build factories
However, there is also knowledge to move out of manufacturing. Some countries and enterprises chose the United States, some chose China, and some also believed that India and Vietnam had greater development potential. Of course, from China's perspective, we hope that Western manufacturing can choose us. , so do we have this ability and confidence?
In my opinion, we have it. China's manufacturing industry has a great competitive advantage, and we are likely to be the biggest winner in the global manufacturing industry in the next round. Here I will talk about some of our strengths and resilience.
First, China has a complete industrial chain and industrial structure.
In the past few decades, China first developed the middle and low-end industries and the labor-intensive industry , laying a good industrial foundation. Later, due to the advancement of science and technology and independent research and development, began to develop into the mid-to-high-end manufacturing industry. We can build high-speed rail and large aircraft, and our home appliance exports are also among the best in the world.
China's high-speed rail exports to other countries
This means that no matter what industry factories and companies come, they can find corresponding supporting systems in China. If you see a computer in each country in the world, then China's compatibility is the best.
Second, China has a huge domestic demand market.
As the world's second largest economy , China has more than 10 billion yuan of GDP every year, and the population of 1.4 billion brings a huge market . So Western countries come to set up factories and sell them to us.
For example, after Tesla's super factory settled in China, many cars were sold directly to our Chinese people, and the orders had been queued for more than half a year. Musk even became the richest man in the world.
Relying on the production capacity of the Shanghai factory, Tesla can export European
For many foreign companies, China is a country that is not allowed to give up, so you will find that although many Western countries in the media are relatively tense about China, , China is actually utilizing more and more foreign capital.
According to data from the Ministry of Commerce, from January to August this year, China's actual foreign capital use amount was 892.74 billion yuan , equivalent to US$138.41 billion, an increase of 20.2%, especially in terms of high-tech, which increased by 33.6%. Therefore, even if diplomatic relations are tense, foreigners' bodies are still very honest.
Under the premise of a high base in 21 years, China's use of foreign investment still has a growth rate of 20%
Especially Germany, which suffered a big loss this time, 's investment in China is the highest proportion of all countries in the world. Therefore, when the United States called for decoupling from China, German Chancellor Scholz stood out: this time he not only expressed his firm opposition to anti-globalization, but also believed that it would never decoupling from China.
German Chancellor Scholz stood up
Third, China has comparative advantages in photovoltaics, new energy vehicles, etc.
Recently, many projects that have settled in China are heavyweight. For example, on July 26, , European , Airbus , launched a billion-dollar aircraft full-life cycle service project in Chengdu; Germany's BASF integrated base was put into production in Guangdong, costing 10 billion euros; and , BMW , gave , 2, Lithium Energy , and , CATL , large orders of more than 10 billion euros, etc.
Germany BASF invested 10 billion euros in Guangdong to build a factory
Why does Germany prefer China so much?
Because only China has advantages in new energy batteries, is also the high-quality engineer team of . The next air outlet is photovoltaics, wind power and new energy vehicles, and China's advantages in this regard are that many developed Europeans do not have.
Will India and Vietnam be China's rivals?
While we are taking over the industrial transfer of Western countries, we are also thinking about a question: Will countries such as India and Vietnam become competitors of China? In my opinion, our foundation is thicker than them, and both countries have relatively big shortcomings.
Although Vietnam and India are developing relatively fast, at present, can only undertake some primary manufacturing industries. Because there is a clear gap between the economic size of the two countries and China.
Vietnam's manufacturing transfers are mostly primary manufacturing
China's GDP16.86 trillion US dollars, ranking second in the world. India ranked sixth in the world with only US$360 billion, ranking 39th.
21 GDP
So India is one of our competitors, while Vietnam is still far from it. But India is a country that is quite strange. Their foundation surpassed us decades ago, but the more we develop, the further we are left.
The population quality of India is actually relatively poor. According to statistics, The current illiteracy rate in India is 85%, Most Indians do not have money to receive education, So although India has a large population, even surpassing China, it cannot enjoy our demographic dividend.
India has the highest number of illiterates in the world
For example, India's technological R&D and investment level are very low. Data shows that India's R&D funds only account for 0.7% of GDP, which is the lowest among the four countries of BRICS , and are not even as good as Vietnam. China's R&D investment accounts for 7% of GDP, 10 times that of India. In the long run, the development gap between China and India will be even greater.
Finally, I want to say that infrastructure construction is the basis for a country to undertake manufacturing transfer, while India's infrastructure is very backward. On the one hand, India invested very little in infrastructure, only 1.1 trillion US dollars in in 110. On the other hand, Indians are very calm, lacking the hard work of the Chinese nation, and the government is seriously arguing about it. The same road can be completed in one year, but India may need to build it for 5-10 years.
India’s old and backward infrastructure
Overall, although the global industrial chain will indeed transfer to India and Vietnam, they undertake the mid- and low-end manufacturing industries that China does not need, which is also the hard money we have made. What we need and are also taking over is the high-end manufacturing industry in developed countries like Germany, which is what we need.
summary
In general, The hollowing out of the US manufacturing industry and the inflation and energy crisis in Europe have forced Western companies to increase their investment in China, and The Fed's multiple hikes in rate have seriously suppressed the domestic manufacturing industry, leading to the bankruptcy of the US manufacturing recovery plan, so. China has become the most capable country in the world to take on their orders.
The Federal Reserve raised interest rates many times, hitting the US manufacturing industry
Even with the continuous intensification of Sino-US relations, more and more Western countries are still investing in and building factories in China, and the proportion of our use of foreign capital continues to increase.
Of course, the development of China's manufacturing industry has not been smooth sailing. geopolitical and the US's "decoupling" plan for China has indeed aroused the wait-and-see sentiment of many companies, which we need to consider and be vigilant.
Of course, I believe that as long as we adhere to the basic national policy of opening up to the outside world and increase efforts to develop foreign trade and the internationalization of the RMB, the dividends of China's manufacturing industry will continue, and the road to the great rejuvenation of the Chinese nation will be smoother and smoother.
surpassing the United States is our goal!
Vietnam and India are not our opponents that we need to care about. To surpass the United States in all aspects is our goal! I also hope this day will come as soon as possible! Come on, China's manufacturing industry!
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