China Made Glamour Multinational Companies Competing To Pfer

The "crying curve" of China made in the new round of industrial upgrading has gradually come to an end. The disappearance of demographic dividend has become the biggest factor in foreign investment in China's manufacturing industry.

Made in China, this young face is losing its charm.

In recent years, it has become a trend for multinational enterprises to withdraw their business from China, move back to their country or move to Southeast Asia and Africa.

In the international division of labor, China's manufacturing industry is at the bottom of the "smile curve" - the lowest profit division.

The acquisition of this market depends on low cost, especially the comparative advantage of low labor cost.

The rise of labor costs, the integration of two taxes, and the appreciation of the renminbi continue to increase. These irreversible trends have engulfed not only the profits of multinational enterprises.

Multinationals can choose to leave. They have traveled from Europe to the United States, to Japan, to Taiwan, to the mainland of China, and now they can choose to go to Southeast Asia and Africa.

A large number of export-oriented manufacturing industries in the southeast coast of China are facing the same cost pressure, but there is no way out. The new advantages have not yet been formed.

Data show that China is still one of the most favored countries in FDI (foreign direct investment), but FDI also shows more confidence in the service sector.

The opportunities left for China are far from enough.

According to the Ministry of Commerce's official website data, in 2012 1~7, 13677 new foreign-invested enterprises were newly approved in the whole country, a decrease of 12.33% compared with the same period last year, and the actual amount of foreign capital invested was 66 billion 669 million US dollars, down 3.64% from the same period last year.

In the month of July, 1972 new foreign-invested enterprises were newly approved in the whole country, down 7.76% compared with the same period last year, and the actual amount of foreign capital invested was 7 billion 579 million US dollars, down 8.65% from the same period last year.

This is the result of voting by foreign capital.

In recent years, the news of famous foreign enterprises withdrawing part or all of their business in China has been reported repeatedly.

According to twenty-first Century statistics, since 2004, lion group, the second largest brewer in Australia, has made a price of 154 million US dollars, which has been packaged in the Chinese business and sold to SAB Miller's stake in Huarun beer.

Since then, Holland's Filipino group has announced the end of its dairy production and operation in China, and Nike and Adidas have closed down Chinese factories.

Statistics show that PepsiCo sold its bottled business in China in 2011.

Beginning in March 2012, the American consumer giant Garton company withdrew the production of "Miken" carbon fiber baseball and safety equipment "First Alert" smoke alarms to the United States.

In addition, Ford motor company has moved 12 thousand jobs from Mexico and China to the United States, Starbucks has also made its ceramic cup from China to the Midwest of the United States.

Ito Yang Hua Tang chose to produce 95% functional underwear in China. In 2012, Ito Yang Hua Tang plans to pfer some of its capacity to Southeast Asian countries such as Thailand. It is expected that the proportion of production in China will be reduced to 75%.

ASICS and MIZUNO reduce the proportion of sporting goods such as sports shoes in China, and expand the scale of production in Vietnam and Indonesia.

Other parts of the business that will be withdrawn from China include: construction machinery company Caterpillar, headphone manufacturer Sleek Audio, toy manufacturer Wham-O, ATM machine manufacturer NCR, etc.

A recent case is that in July 18th this year, sporting goods manufacturers

The company will close its only factory in China by the end of October.

Nike, its rival, closed its sole shoe factory in Taicang, Jiangsu, in 2009.

Adidas's production base has been pferred from Europe to Japan, and then moved to Korea and Taiwan, China, and then to mainland China, and now it will leave from mainland China.

Correspondingly, Clarks, K-Swiss, Bakers and other international

The giants have also added production lines in Vietnam and Indonesia.

Capital is always chasing profits. The pfer of international capital shows that the comparative advantage of China's manufacturing industry is fading away.

Among them, the sharp rise in human cost is most obvious.

The disappearance of demographic dividend is considered to be the biggest factor in the pfer of foreign investment in China's manufacturing industry.

It is understood that the most direct reason for Adidas to close its Suzhou plant is that the cost of human labor is rising too fast.

At present, the average wage of the workers in Suzhou is nearly 3000 yuan per month.

British media broke the news that Adidas paid only $15 a week to the Kampuchea garment factory workers who produce London Olympic licensed products.

Adidas finally rectified the average monthly wage of local workers at 130 US dollars, or 828 yuan.

Compared with Suzhou, its cost advantage is obvious.

In fact, the rise in China's labor costs is not overnight.

Yuan Ni, an associate professor of Capital University of Economics and Business, described the situation of China's "labor shortage" in recent years, in the 2012 issue of "the study of China's economy - from the perspective of Lewis curve, demographic dividend and Kuznets curve".

According to its introduction, since 2004, China's coastal areas have gradually produced "labor shortage" phenomenon.

Especially in the context of the financial crisis, after the Spring Festival of 2010, the "labor shortage" occurred again. The labor-intensive small and medium-sized manufacturing industry was short of ordinary workers, and the capital intensive or technology intensive enterprises were lack of skilled workers.

In the first quarter of 2011, the wages of migrant workers in China increased by more than 10%, and the monthly income exceeded 1800 yuan.

According to the Boston consultants' report, from 2005 to 2010, China's wage rose by 69%.

In March 2012, the Standard Chartered Bank survey of over 200 manufacturers showed that wages rose by 10% in March before 2012.

A survey of 1856 enterprises by the General Administration of Customs shows that 80.4% of enterprises reflect the rise of labor costs, 56.4% of enterprises reflect significant increase in exchange rate costs, and 56% of enterprises reflect the rising cost of raw materials.

91% of the members of the American Chamber of Commerce in Shanghai mentioned the rapidly rising labor costs in China.

After years of per capita wage growth, China's comparative advantage in manpower costs has been getting smaller and smaller.

In terms of human resources, more advantages are in Southeast Asia and parts of Africa.

According to the statistics of Japan's Trade Promotion Council, compared with China, Vietnam's production cost is 15% to 30% lower than that of China. Compared to the mainland of China, the average monthly salary of Vietnamese factory workers last year was about 136 dollars, while that of Indonesia was about 129 dollars, while the average monthly salary of Chinese workers has reached 413 dollars, which is more than three times that of Vietnam and Indonesia.

According to French media reports, the wages of Chinese garment industry workers have risen to 180 euros to 300 euros per month, roughly the same as that of Belarus, while Madagascar is only 50 euros.

More and more French clothing brands, such as IgG and Xi Li o, have begun to establish processing sites in Madagascar.

Woodk, chairman of the China EU Chamber of Commerce, predicts that by 2020, the cost of manufacturing industry will be 2 times to 3 times.

According to the analysis of global business Consultation Service Co AlixPartners, if China's exchange rate and pportation cost increase by 5% every year and wages increase by 30% every year, the cost of setting up factories in China and in the United States will not be much different by 2015.

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The rising cost in China is not just manpower costs.

On taxation, the "super national treatment" of foreign-funded enterprises is also failing.

After the implementation of the new enterprise income tax law and its implementing regulations in 2008, the preferential tax policies for reinvestment, tax exemption and periodic tax reduction and exemption from foreign investment enterprises and foreign enterprises were cancelled.

The new tax law stipulates that foreign-funded enterprises set up after March 16, 2007 will no longer enjoy a preferential policy of two exemption and three reduction.

Since January 1, 2008, enterprises enjoying the preferential tax policy with low tax rates have gradually shifted to statutory tax rates within 5 years after the implementation of the new tax law.

This means that by 2013, foreign invested enterprises will lose their tax advantages in an all-round way.

In addition, the pressure of RMB appreciation has led to the overall rise in the cost of foreign enterprises in China, and it is also one of the important reasons for foreign companies to withdraw from China.

Bai Ming, deputy director of the international market research department of the Ministry of Commerce, believes that there is no need to panic too much in the face of the withdrawal of foreign capital.

It is normal for foreign capital or foreign enterprises to get in and out.

As the most important resource of optimal allocation, the pace of optimal allocation of capital worldwide may slow down moderately, but it will not stagnate.

It is preliminarily judged that in the second 10 years of twenty-first Century, international investment will return to normal growth on the basis of restorative growth.

The United Nations Trade and development organization's 2012 World Investment Report (hereinafter referred to as the "report") also shows that although foreign direct investment decreased year by year, China is still the most favored by FDI economies.

China in recent two years

Trend: continuous decline, the United States and the European Union issued a "manufacturing return", "industrial reengineering" and other voices.

The report shows that China's FDI inflow increased by 8% in 2011 to 124 billion US dollars, ranking second in the world, behind the US ($226 billion 900 million). At the same time, China is still the most attractive economy to FDI. The annual survey of world investment prospects conducted by UNCTAD in 2012 showed that China ranked first among the most popular host countries selected by multinational corporations, ranking second in the US and third in India.

However, it is worth noting that the report also acknowledged that the attraction of Indonesia and Thailand to FDI increased significantly, indicating that the competitiveness of Southeast Asian countries in attracting foreign investment was enhanced.

Although the report supports China as the most attractive economy to FDI, it also points out that the structure of China attracting FDI has begun to tilt towards the service sector.

As the FDI in the service sector increased, FDI in the manufacturing sector slowed down, and FDI in the service sector surpassed the manufacturing sector for the first time.

In the service industry, real estate, trade and business services have always been an important industry attracting foreign investment.

Foreign direct investment will continue to pour into China, but how many opportunities are there for China that has not yet grown up?

In today's international division of labor, the comparative advantages of different countries are reflected in different industries and in different links of the same industry value chain.

Multinational corporations make use of the differences between countries in the value chain link, and divide them into the best location to meet their global strategy by dividing the value chain.

In the "smile curve" of this division of labor, China is at the bottom of the curve - the lowest profit link.

China's division of labor depends on cost advantages and the cost advantage is losing.

The loss of cost advantage is not only a blow to China's participation in TNCs' business, but also to all export oriented Chinese manufacturing industries.

In the international competition, the biggest traditional advantage of China's manufacturing is being lost, and new advantages have not yet appeared.