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Foxconn (Foxconn) is likely to appear in the headlines this year. This assembly IPod The Taiwan company is the largest manufacturing enterprise in the world.

In April and May this year, a series of suicides took place in Foxconn's factory in Shenzhen, and more than 10 young workers jumped to death. These terrible incidents have exposed many rigid and repetitive working conditions in many Chinese factories.

But in another important change in China, Foxconn is also at the forefront. The company plans to restructure the Chinese business and gradually shift most of its production to the mainland provinces.

Taking Foxconn's Apple as an example, Foxconn is planning to move parts of its production to northern Tianjin and central China. The company is negotiating with the local government of Zhengzhou, the capital of Henan, to plan for the construction of a large factory there.

This is not going to be done by the Foxconn family. The economic geography of China as a whole is shifting widely. Some manufacturing bases are moving from richer coastal areas to inland provinces. This shift to the mainland is not new. Some companies started making such plans ten years ago, but only accelerated in the past two years.

Such a shift may be significant for China's economy.

Moving to lower cost cities helps maintain Manufacture The competitiveness of enterprises at the same time promotes the formation of new modern consumers in these areas.

In addition, in the face of weak demand in western countries and overheated property market in some coastal cities, massive investment in the mainland will also help maintain rapid economic growth.

The transfer of manufacturing to the mainland has been driven by two forces: government investment and rising costs. During the global financial crisis, China took the opportunity to increase investment in infrastructure, especially transportation. For example, the government has launched an ambitious high-speed rail network expansion plan. By 2020, it will increase the total mileage of high-speed rail by two times, reaching more than 16 thousand kilometers. According to the World Bank, the Chinese government plans to invest more than $100 billion a year over the next few years to expand the high-speed rail network, which will account for more than half of the total railway investment in the same period.

Inland provinces are among the main beneficiaries. A new high-speed rail has been built between Guangzhou and Wuhan, which is becoming a major transport hub. The speed of the 1100 km journey has dropped from the past 11 hours to 3 hours. It is known as the world's fastest long-distance rail line. Another 505 kilometer new high-speed rail link connects Xi'an with another rapidly developing central hub city, Zhengzhou. In recent years, many highway networks in Central China have also invested heavily.

The improvement of infrastructure has greatly changed the prospects of manufacturing in many parts of central China. "The sense of distance has changed radically," said Song Hong, an economic adviser to the Anhui provincial government.

Another driving factor in the shift of manufacturing to the central region is the rising cost of production in coastal areas. The Foxconn factory in Shenzhen announced a pay increase of 30% after the suicide, which may be an extreme example. But in the southern manufacturing area and the eastern Shanghai surrounding area, the two digit wage growth rate is very common.

In textiles, Electrical manufacturing In industries with low profit margins, enterprises find themselves only two choices: to move overseas, for example, to Vietnam or to a low cost inland province. For many enterprises, the improvement of the logistics conditions in the central region means that moving to the mainland is a better choice.

The pattern of population migration is also changing. Over the past 30 years, provinces such as Anhui and Jiangxi have been exporting large quantities of labour to coastal provinces. Now, as workers choose to stay closer to home, the flow has partially reversed. This makes the central city a more attractive consumer market, thus forming another source of economic vitality. In Wuhan, developers are expanding the Mall City, whose owners say it will be one of the largest shopping centers in the world with a total area of 400 thousand square meters.

However, despite the strong force pushing the expansion of the central region, there is also a huge risk that may hinder its rapid development. China's economy is heavily dependent on investment, which is particularly evident in several central provinces. According to the figures released by the Anhui provincial government, last year, the province's investment accounted for more than 90% of GDP. In Hubei Province, the ratio is 64%.

However, these figures may be more doubtful of the accuracy of China's provincial statistics, and the real economic problems may not be so serious. For example, if the official data of Anhui province are accurate, the consumption of the province is basically negligible, which is unlikely.

But no matter what, these figures are also worth vigilance: if the Chinese government has to suddenly reduce the scale of investment for some reason (such as inflation is soaring Miao Tou), the economy of the central provinces may suddenly slow down.