Introduction: For the past 30 years, China has been known as the "world manufacturing center" and is a world-leading manufacturer country. But after the coronavirus outbreak, many people said, "China can no longer become a low-cost world manufacturer," can China retain its position as a world factory after the epidemic?
After the coronavirus outbreak, many people said, "China will never be a low-cost world manufacturer." While Western countries are talking about reducing their dependence on Chinese factories, China has consolidated its position as the world's leading manufacturing supplier in the past two years.
China quickly recovered after the outbreak of the new crown epidemic in 2020. Whether from fashion brands, technology companies to automobile manufacturers, or pharmaceutical manufacturers, almost all companies that produce consumer goods have turned to China for supply and manufacturing. China provides a large number of urgently needed goods to the Western market: low-cost medical equipment, such as masks and test kits, computer peripherals for remote work, and consumer products such as home fitness equipment.
Yantai Port is ready to ship the car
According to People's Daily report: my country's manufacturing added value in the world has increased from 22.5% of in 2012 to nearly 30% of in 2021, continuing to maintain its position as the world's largest manufacturing power. The added value of manufacturing industry increased from 1.698 trillion in 2012 to 1.14 trillion in 2021. In the past decade, my country's manufacturing industry's scale advantages have been continuously consolidated, the system's complete advantages have become more prominent, the comprehensive strength has continued to improve, and the vitality and strength of market entities have been continuously enhanced.
In terms of smart electronics, automobiles, etc., my country's automobile ownership has increased significantly from 78 million in 2010 to the current 310 million vehicles, especially new energy vehicles. production has ranked first in the world for seven consecutive years. In 2021, China's 5G mobile phone shipments reached 270 million units, accounting for 75.9% of mobile phone shipments in the same period.
UNCTAD data shows that China's global electronics exports increased from in 2019 to 42% in 2021, while the share of textile exports increased from 32% to 34%.
Image source: Amazon Elf Classroom
According to data from the United Nations Conference on Trade and Development on Global Trade, in the three years of the outbreak of the new crown epidemic, China's trade export volume increased from 13% in 2019 to 15% at the end of 2021. During the same period, the main competitor Germany's share of global exports fell from 7.8% in 2019 to 7.3% in 2021; Japan's share fell from 3.7% to 3.4%; and the United States' share fell from 8.6% to 7.9%.
In 2022, China's exports remain strong, while countries around the world are facing inflation, continued livelihoods, and the troubles brought by the Ukrainian-Russian War.
From the perspective of China's manufacturing industry itself:
According to national economic statistics, my country's manufacturing industry has 31 major categories , 179 medium categories and 609 small categories , which is the manufacturing industry with the most complete industrial categories and the most complete industrial system in the world. The industrial chain supporting capabilities of are the world's leading , with strong resilience and development potential of . The advantages of are fully demonstrated in the process of external impacts such as the new crown epidemic.
Over the past decade, my country's export volume of technology-intensive electromechanical products and high-tech products has increased from 7.4 trillion yuan and 3.8 trillion yuan in 2012 to 12.8 trillion yuan and 6.3 trillion yuan in 2021, respectively. The proportion of manufacturing intermediate products trade in the world has reached about 20%. The number of brands in the industrial and information technology field that are shortlisted for the top 500 brands in the world has increased from 210 to 24 in the past.
Under the influence of the coronavirus, the chain reaction of factory closures across the country has caused supply tightness in many industries around the world, but its negative impact will not be limited to China.As an irreplaceable manufacturing country in the world, China's production coverage has expanded to high-end products, such as chips, smartphones, new technology electric vehicles and green energy. As China is fully integrated into the global manufacturing and supply chain, it is basically unlikely that a complete decoupling will occur.
In fact, due to the numerous advantages of China's manufacturing industry, such as its huge scale, stable environment, strong supply chain and perfect infrastructure, some other manufacturing centers are being used to supplement China's manufacturing industry rather than replace China's manufacturing industry.
According to customs statistics, the total value of my country's import and export of goods in the first half of 2022 9.8 trillion yuan , a year-on-year increase of 9.4% . Among them, 1.14 trillion was exported, increasing 3.2% ; import 8.66 trillion , increasing 4.8% . Moreover, the current international market demand is relatively stable, which provides broad space for China's exports.
Image Source: General Administration of Customs released data on July 13
html Since May, with the overall improvement of the domestic epidemic prevention and control situation, various policies for stabilizing growth have gradually emerged, and foreign trade enterprises are resuming work and production in an orderly manner, especially the rapid recovery of imports and exports in the Yangtze River Delta and other regions have driven a significant recovery in the overall growth rate of foreign trade in the country. htmlChina's foreign trade imports and exports increased by 9.5% year-on-year in November, accelerating by 9.4 percentage points from April, and the growth rate in June further increased to 14.3%.
Image source: General Administration of Customs released data on July 13
With the support of the government, Chinese companies are also developing all-selected fields where international trade is expected to grow rapidly in the future. For example, China's solar cell exports soared to US$25.9 billion in the first half of this year, an increase of 113% from the same period last year. According to Chinese customs data, China's automobile exports hit a new record of about 290,000 vehicles in July this year.
In the United States, it has undergone a certain degree of decoupling from China. In recent years, China's share of total U.S. imports have declined, mainly due to increased tariffs on Chinese goods and the fact that some companies are moving factories to other countries, such as Vietnam . In addition, Thailand, , Malaysia, , India, etc. have also become popular choices for "manufacturing centers".
Let’s first talk about the advantages of these countries:
. Malaysia has a superior geographical location, has good trade ties with other parts of the world, has a good port infrastructure, can help the country compete with shipping from China, and has a skilled labor force. And we are striving for manufacturing contracts with a good economy, open trade and investment.
2. Thailand ranks high in terms of convenience of doing business, and its infrastructure quality is similar to that of China, especially in supporting international trade. It also plans to upgrade infrastructure to attract more Chinese manufacturers as part of the Belt and Road Initiative.
3. English is one of the official voices in India. Communication is a great attraction for manufacturing companies in India. Moreover, like China, India also has a huge cheap labor force.
But what is the actual situation? What are the disadvantages of these countries?
. Vietnam's production capacity is only equivalent to a small part of China. Compared with China's html's labor force, , Vietnam's labor force is only 55 million. Vietnam's infrastructure is not as developed as China. Shanghai Port handles more than 47 million containers each year, an increase of more than 8% year-on-year, setting a new record high, and has ranked first in the world in container throughput for 112 consecutive years.
Shanghai Port container development history
Shanghai Port
and Sai Kung Port (the largest port in Vietnam) can only process 6.15 million containers . In addition, border compliance clearance times are twice as long as China has, and there is a risk of frequent strikes by workers.
2. In Malaysia, political turmoil may deter foreign investors. Moreover, because its minimum wage is twice that of China, labor costs are much more expensive.
3. In India, the main problem is the lack of good infrastructure. India's ranking is lower than China in terms of customs, logistics capabilities, logistics tracking and timeliness. A decentralized government system can also complicate business.
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However, each of these countries faces challenges that China does not have. All manufacturing centers have pros and cons. So far, China has the upper hand, and its advantages are far greater than its disadvantages.
As the domestic epidemic prevention and control situation generally improves , the production of coastal factories has gradually returned to normal, and China's status as a world factory and a global production base is unshakable. At the same time, China's strong advantages such as complete system, complete supporting facilities, strong organizational and collaboration capabilities, and complete industrial chain also determine the irreplaceability of other countries.
This article comes from the official account: Cross-border supply chain prospect
Partial reference materials: General Administration of Customs, Amazon Elf Classroom, Sakura arrest
