Where Is The Upgrading Road In China?

Recently, the number of labor disputes in domestic manufacturing enterprises is increasing, which reflects that the economic and social pressure borne by the enterprises after the rise in the cost of labor is increasing.

At present, the task of domestic macro policy is shifting from growth to structural adjustment. What kind of pformation and upgrading are facing China's manufacturing industry? The global economic structure is also changing drastic. How can China maintain its competitiveness and growth potential? In order to explore related issues such as upgrading of China's manufacturing industry, Zhang Yansheng, director of the Foreign Economic Research Institute of the national development and Reform Commission, Cao Jianhai, a researcher at the Institute of industrial economics of the Chinese Academy of Social Sciences, and Mei Xin Yu, Vice Minister of international economics and trade of the Ministry of Commerce, were interviewed in this issue.

End of OEM mode?

Twenty-first Century: there is a view that the employment mode of China's "world factory" has ended.

How do we view the challenges faced by the traditional manufacturing industry?

Cao Jianhai: China's manufacturing industry, as the world's manufacturing giant, relies on low wages, sweatshops, high consumption and high emissions to drive growth.

The next step is to raise wages substantially, which will put pressure on some small businesses. Not only the pressure of wage increase, but also the pressure of RMB appreciation, and the tax pressure from resources and environment.

Only those enterprises that can withstand multiple shocks can survive. They can not withstand shocks or disappear or turn to the domestic market.

Now some people worry that these enterprises will be more unemployed if they are eliminated. I think this kind of low wage employment is of little significance.

Zhang Yansheng: OEM is a more important mode of trade and production in the development mode of the first 30 years of reform.

Processing trade is both ends, and China participates in the global production system of multinational companies with low cost labor force.

The product value chain of multinational corporations is allocated globally. Low cost labor, land and environment constitute the comprehensive competitive advantage of China.

This model has its limitations, because the core competitiveness lies in low cost. When the cost continues to rise, it will be difficult to say whether this chain of production processes or production links will remain in China.

When other countries and regions can replace China's low cost advantage, this part of the trade will be pferred externally.

The mode of OEM in the first 30 years is of great value to China's development.

The foundry mode has solved the shortage of capital and foreign exchange, fostered the market economy, promoted the pformation of the economic system, and enabled China to enter the tide of globalization and complete the pformation of the concept.

But in the next 30 years, this model is difficult to sustain.

The reason is very simple. The mode of OEM is a mode of small economy, a low end development mode, which is not in line with the direction of China's economic development mode pformation and manufacturing upgrading.

Mei Xin Yu: in recent years, China's labor dispute and labor dispute cases have increased rapidly, which is obvious to all.

The reason for this is partly because of the rising cost of living, and on the other hand, the right of workers to reasonably share the fruits of economic growth.

With the development of China's economy, the cost of labor, land and other factors will inevitably rise. This is an inevitable trend and can not be stopped by human beings.

If companies want to continue the strategy of cheap labor in the past, they will inevitably lead to a series of conflicts between employers and employees.

Therefore, now the government, enterprises and society should form a consensus. The original mode based on low cost labor force must be reformed.

In the context of globalization, the most important obstacle to improving the treatment of export oriented economies is pnational vicious competition among peers. What I call "global meat grinder" is to scramble to provide cheaper labor, land and environmental costs for multinational corporations and capital in Europe and America, thereby creating their own "cost advantage".

In this way, if our country wants to improve employee's treatment, some capital will be driven out of profit motive.

Some foreign companies are posing as such: if you ask me to raise my salary, I will close the factory and invest in other countries.

Compared with other emerging market countries, the relative advantages of China in macroeconomic stability, political and social stability have emerged from the outbreak of the sub-prime mortgage crisis, and it can not be compared with other emerging market countries in terms of macroeconomic stability, political stability, infrastructure construction, policy environment and staff quality.

In view of this, it is a good time to promote the treatment of workers.

How to satisfy welfare demands?

Twenty-first Century: what changes have taken place in the career choices and competitiveness of the new generation of post-80s and post-90s workers? How should the government, enterprises and ILO work to provide better social support in the face of the welfare demands of the new generation of migrant workers?

Zhang Yansheng: how to measure the difference between the two generations? The most direct criterion is hungry, hungry is the generation before the reform 30 years ago, and not hungry is the new generation in the next 30 years.

Who can accept "sweatshops"? Only hungry people can accept it.

The new generation of migrant workers grew up after the reform. Most of them were not hungry.

They are the first generation of people who are in line with the global concept after China's entry into modern times. They are the best educated generation.

It is impossible for enterprises to accept them in the first 30 years.

The unfair treatment of employees will be more and more protesting, which also requires higher employees' welfare and social responsibilities.

Mei Xinyu: in the future, the cost of labor will continue to rise. Where is the competitive advantage made in China? The first competitive advantage should be the high quality of our human capital.

Since the founding of new China, the government has made a strong push to popularize basic education. At present, the literacy rate of our country has reached over 90%.

India, which is regarded as our main competitor, has a better starting point than ours, but its literacy rate is still around fifty or sixty.

How can a country with nearly half illiterate people become a manufacturing power? So our strength in human capital is very significant.

In addition, the Chinese people have a strong spirit of struggle. Our cultural tradition makes people believe that fate is in their hands, and that they need to strive for a better life.

The spirit of self striving is the core value of China's human capital.

The new generation of post-80s and post-90s also inherited the spirit of struggle of the previous generation.

The society is worried about the self struggle and hardship spirit of the post-80s and post-90s. On the one hand, it has not noticed that the forms of hardship are not exactly the same as before. On the other hand, they paid too much attention to only a small number of decadent people. They regarded them as representatives of post-80s and post-90s, but ignored the "silent majority".

In fact, the main body of industrial workers is the new generation of laborers. Since the title of "world factory" is cast in their hands, this fact is enough to prove their spirit of struggle and hardship.

They work hard and bear the pressure of work. No matter in their work or in safeguarding their legitimate rights and interests, they have shown valuable abilities, responsibilities and boldness. These qualities and dynamics deserve to be affirmed. The society should pay more attention to the "silent majority" of this group, so that most people can express their reasonable demands and fair appeals.

Twenty-first Century: with the gradual development of the economy in the central and western regions, more and more migrant workers choose to work nearby and seek development in cities and towns near their hometown.

How should China's manufacturing industry be distributed in the region? How should the pfer of coastal industries to inland industries be completed?

Mei Xin Yu: the industrial policy should include two parts, one is the development of new industries, the other is the extension of the life cycle of traditional industries. Two

For the development of traditional industries, under the rising cost trend, the government should guide policies appropriately to alleviate the upward pressure on costs.

We have vast territory and large gap between different regions.

Therefore, industrial pfer can be carried out from coastal areas to the mainland.

The benefits of industrial pfer are many. The mainland migrant workers can find jobs with decent income and enjoy family life, higher quality of life and more dignity and happiness without leaving their homes.

Zhang Yansheng: workers working near their hometown can get support from their families. Parents, relatives and friends can share part of the work pressure of these young people.

But the unfair treatment of employees can not be solved.

We must be sure that the younger generation's demands for just production and living environment should push the reality to change in this direction.

The core issue of the pfer of export processing enterprises to the central and western regions is the fundamental pformation of the development mode, rather than pferring the backward production mode to the central and western regions.

Instead of pforming old models into new ones, we need to pform old ones into new ones.

Cao Jianhai: now there is not much demand overseas, and the demand in the eastern part is also limited. There is no need for factories to concentrate on the coastal areas. Therefore, the pfer of industry to the mainland is an inevitable trend.

But in the process of pfer, if we fail to achieve industrial upgrading, we can not promote energy conservation and emission reduction, but shift the polluting industries to the central and western regions.

In a big city, the cost of living is too high, the income is too low, and the workers simply can not maintain the basic life of the family, nor can they enjoy family happiness.

Even if they went back to their hometown, they could earn more agricultural products than they did.

Therefore, this simple mode of foundry is definitely coming to an end, and the next step is to raise wages.

Enterprises can not adopt temporary employment system for employees. They should focus on the long term, cultivate their talents and pay attention to the promotion of workers' human capital.

After the cost rises, enterprises need to renegotiate with the enterprises that have been subcontracted.

The advantages of China's manufacturing industry are still huge compared to those of Vietnam.

What is the advantage of "made in China"?

Twenty-first Century: with the coming of Lewis turning point, how can China's manufacturing industry upgrade? How can we maintain the competitiveness of "made in China"?

Cao Jianhai: industrial upgrading refers to the adjustment of economic structure and industrial structure, from the direction of high energy consumption and high emission to energy saving and emission reduction; from the investment market to the consumer goods market; from material products to services.

It is of little significance if we measure the productivity per unit time or the material consumption per unit output.

Just as productivity increases, the consumption of iron ore per ton of steel decreases, but because of the greater output of steel, the total consumption is still increasing.

In turn, the whole industry is changing to more consumptive, healthy, service and intangible products. The added value is bigger and bigger, consumption is less and less, and the demand for human capital and technology is more and more vigorous. This is called industrial upgrading.

The direction of future reform is to insist on solid industry, improve labor remuneration, and levy taxes on environment and resources.

Promoting technological progress on the basis of rationalization of factor prices, and adopting tax reduction and exemption measures to encourage enterprises that are in line with industrial policies to develop faster.

Zhang Yansheng: in the future, our engine of economic growth will be pformed from exports to domestic demand.

Economic growth in the future will depend more on urban and rural consumption and private investment.

In the future, OEM enterprises will pform from export to expand domestic sales.

The domestic industrial structure will also change, and the development of modern service industry will be more and more rapid.

To extend the "smile curve" to the both ends, it means that only those products and services with sustained added value can survive.

In the future, export enterprises should pform from low-level imitation to independent innovation, and rely on technological progress to lead product upgrading.

With the gradual improvement of the domestic market mechanism, the preferential policies enjoyed by the export enterprises will also be gradually reduced.

In the future, foreign enterprises must compete with other enterprises in a fair policy environment.

So in the next 30 years, these enterprises must rely on their own survival and development.

Mei Xin Yu: in the foreseeable future, China is still a big manufacturing and export country, or to maintain the status of the world's factory.

The modern service industry is built on the basis of manufacturing industry, and no manufacturing industry is the foundation. Modern service industry is simply a tree without roots and water without a source.

The development of manufacturing industry can provide enough people with the opportunity to share the fruits of development. The share that may be shared at the moment is not ideal, but it is better to share more than to share less, to share less than to share.

In the future, the government and society will promote the moderate increase of workers' income and welfare level. In the past, simply talking about "creating employment opportunities" will turn into "creating decent income employment opportunities".

Moreover, relying on domestic demand in the future does not mean that exports are no longer important.

The output of many products in China accounts for 80%-90% of the world's total. Although we have a large domestic market, how to digest such a high output in the market of 1/5 of the world's population depends on the international market.

At present, China's industrial base is the result of arduous struggle in the past 60 years after the founding of the people's Republic of China. It should not be abandoned easily under the banner of "economic growth mode pformation".

And if our industry wants to maintain sustainable competitiveness, we must have overseas markets.

Enterprises and industries that rely solely on the domestic market will inevitably decline when the domestic market is saturated and the aging of China's population is coming.

In order to prevent this from happening, we can not shrink and expand further in the international market. Only in this way can we maintain the competitiveness and industry status of our industry in the international market.

In addition, China's infrastructure is undoubtedly the best in developing countries, and in many ways even surpasses that of some developed countries.

Compared to those developing countries that want to catch up with us, our advantages in this regard can last longer.

Such as India, Vietnam and other countries, the government has limited financial resources and can not efficiently concentrate a large amount of money into infrastructure construction.

Finally, as a big country, our manufacturing industry has economies of scale, which is difficult for other small economies.

The whole industry chain is very complete and the domestic market is maturing gradually. The OEM enterprises can efficiently allocate production in China.

As the "China miracle" is attracting more and more attention from the world, we can pform the standards and fashions of the domestic market into the standards and fashion of the global market, and surpass the dilemma of the "global meat grinder".

At present, many popular products are carrying the Western lifestyle and value.

These products are popular in the world, and manufacturers can only give them OEM and OEM. The export processing countries are killing the manufacturing industry, and the high value-added links such as design, brand and circulation are all in the hands of European and American multinational companies.

Now China's economic strength is stronger and stronger, and developing its own brand can enable Chinese enterprises to occupy the highest yield link and dominate the direction of global products.