From Producing Handbag Shirts To Producing Electronic Components, China Is Losing Its Status As A World Factory.

< p > latest data show that China is losing its competitive advantage as a low-cost production base. Manufacturers from manufacturing handbags, < a > shirts < /a > to producing basic electronic components in various fields are moving their businesses to cheaper areas such as Southeast Asia. < /p >
The change reflected in the foreign direct investment data released on Wednesday is a joy and worry for the Chinese economy, which is the main engine of global economic growth. On the one hand, the Chinese government hopes that the domestic industry will shift to high value-added products and raise its national income. But on the one hand, reducing the concern for the manufacturing industry means that Chinese leaders must ensure that other fields can create employment, thereby ensuring that the engines of the second largest economies in the world continue to roar. < /p >
According to data released by China's Ministry of Commerce on Wednesday, China's foreign direct investment decreased by 3.7% to 111 billion 720 million dollars in 2012, the first annual decline since the outbreak of the global financial crisis in 2009. < /p >
< p > economists believe that the reduction in actual use of foreign capital in 2012 is, to a certain extent, cyclical, and is affected by the overall slowdown in China's economy and the persistent debt crisis in Europe. < /p >
< p > but it should be recognized that the long-term trend of rising wage levels in China and the decrease in competitiveness caused by other cost factors, especially the weakening of the competitiveness of the basic manufacturing industry, are also the cause of this result. In contrast, Thailand's foreign direct investment soared by about 63% in 2012, and Indonesia's foreign direct investment in the first nine months of last year also increased by 27%. < /p >
< p > Coronet SpA is a Italian company that produces artificial a target= "_blank" href= "http://www.91se91.com/" > leather < /a >, and has a production line in Guangdong province of southern China. But the company is planning to build a new factory in Vietnam because of its lower labor cost and closer to its a target= "_blank" href= "http://www.91se91.com/" shoes, /a class and handbag manufacturers. Many of these manufacturers have already moved to Vietnam. < /p >
P Coronet CEO Jarno Tagliarini said in an e-mail that many of their customers were moving part of their businesses to the Far East countries with lower labor costs. After considering all the countries that could be chosen, Coronet thought Vietnam had the most promising future. < /p >
There are some uncertainties in the data of foreign direct investment (P) in China. According to the analysis of Thilo Hanemann, director of Rhodium Group research, in another set of data released by the Central Bank of China, the domestic reinvestment of foreign investors in China and foreign profits earned growth in the first nine months of last year. But he pointed out that the data could be substantially revised, and also showed that the growth rate of investment over the past two years was close to zero. < /p >
With the help of overseas capital, China has become a low-cost manufacturing center and a global growth engine with the help of P. But rising labor costs, increasing demands for jobs and working conditions, and serious pollution associated with low-end manufacturing industries have already eaten up China's cost advantage. < /p >
In order to foster a solid consumer base, China is trying to adjust its economic structure and change its traditional pattern of relying on low-end manufacturing and intensive capital investment, P. The subdivision data released on Wednesday also confirmed this direction: although foreign direct investment in manufacturing industry has been reduced by 6.2%, foreign direct investment in the service sector excluding real estate has increased by 4.8%. < /p >
Shen Danyang, a spokesman for the Ministry of Commerce, said at a news conference on Wednesday that China is keenly aware that the competitive advantage of foreign trade will continue to be dependent on the strength and cost advantages of the labor force. It is necessary to guide enterprises to improve the quality and grade of products and increase the added value of P products. < /p >
< p > < strong > he acknowledges that there is indeed a trend of manufacturing relocation. < /strong > < /p >.
< p > Shen Danyang said that the Ministry of Commerce believes that there are still some manufacturing industries moving out, but this is normal, and there is no large-scale foreign investment in China. < /p >
< p > a large portion of China's foreign investment is attributed to Asian enterprises. Last year, investment from 10 Asian economies dropped by 4.8%, accounting for 82%. The largest source of foreign investment is Hongkong, which reflects to some extent the flow of capital from mainland Chinese investors. < /p >
"P" is a country that can play a decisive role in accelerating the withdrawal of foreign investment from China. Japan's investment in China last year increased by 16% compared with 2011, but the deterioration of relations between the two countries triggered by the island dispute may prompt Japanese companies to look elsewhere. In September last year, Japanese cars and enterprises in China were smashed by Anti Japanese sentiment in China. < /p >
< p > many Japanese enterprises have started looking for second production bases to hedge the risks of China's business. For example, although Vietnam's foreign investment decreased by 15% last year, its investment from Japan has more than doubled. < /p >
< p > Japan was also the largest source of foreign investment in Thailand and Vietnam last year. In Indonesia, the scale of foreign investment from Japan ranks second, second only to Singapore. < /p >
A survey conducted by P Japan External Trade Organization in October last year showed that only 52% of the surveyed enterprises intend to expand their business in the next one to two years, which is lower than 67% in 2011. < /p >
< p > Yoichi Maie, head of the China and North Asia Department, said there are several reasons for this decline, especially the rise of labor costs, and the tense political relationship is not the most important factor. < /p >
"P >" real family Yang "also stressed that Japanese companies are limited in their ability to deviate from China and seek diversification because no other country, apart from the United States, can provide such a large market and highly mature production network. < /p >
The transfer of P to other countries does not mean abandoning China. Of the 300 American Chamber of Commerce in China members surveyed, 58% said China was still one of their top three investment destinations, but said China was only 20% of its preferred investment destination last year, which is lower than 31% in 2011. < /p >
< p > many enterprises are also seeking to move from coastal manufacturing cities to less expensive inland areas. The survey conducted by Federation of Hong Kong Industries last May showed that about 10% of the Hongkong enterprises in the Pearl River Delta region of China are considering moving to Southeast Asia because of rising costs, while 13% of them consider moving to inland provinces in Hongkong. < /p >