“The magnitude of the problem of time may be exaggerated”
The Chairman of the Intermediate National Committee for Trade, Craig Allen, found that after the outbreak, the foreign company, CEO, was very active in paying attention to the Chinese market, but that the perspective had changed, “including the United States, Europe and Japan’s CEOs, all in an effort to convince their boards to increase their investment in China”.
This is distinct from the three-year period of the epidemic. “The risk they believe to invest in China is likely to reduce future rates of return, and the three-year epidemic prevents many high-level managers from visiting China and does not allow them to visit their staff and visit their clients, which further exacerbates the Board’s view (investment in China). Craig Alan stated at the 2023rd Annual Forum of China’s High-level Forum on Development, held on 25 March.
In addition, the China Business Environment Survey, published by the United States Chamber of Commerce in China, although about 74 per cent of the enterprises visited have committed themselves to continuing to cultivate the Chinese market, the number of enterprises considering or having begun transferring production and procurement links to China has for the first time increased by 10 percentage points since the new coronary epidemic. The survey revealed that nearly six interviewed enterprises indicated that risk management and strict epidemiological control measures were the main factors for their companies to consider the transfer of capacity.
In the face of many challenges, foreign-owned enterprises continue to show growth resilience. According to the statistical analysis of the Ministry of Commerce, China has experienced a new and historically high level of capital inflows, and, on the basis of double-digit growth in 2021, FDI continued to grow at a steady rate in 2022, with actual use of foreign investment for the first time exceeding $120 trillion, or 6.3 per cent on a comparable calibre. The United States dollar has reached $1891.3 billion, an increase of 8 per cent, and the scale of the financing has remained the top of the world.
“The majority of foreign-owned enterprises indicated that China remains an important part of their supply chain, and that most of them prefer to work here.” What the Managing Director of the Chinese American Chamber of Commerce can tell the Chinese News Weekly about the type of companies that are or are preparing to embrace new markets, what can be transferred or sectors, why they leave, whether for common reasons or for the enterprise’s own consideration.
“The south-east of the poles”, not necessarily bad
The Secretary-General of the China-Indian Association (CMA) described the recent closing of a 120-member business reconnaissance mission in Viet Nam, with a full team of Chinese-owned enterprises, from various sectors such as electronics, mobile phones, cars, storage, photovoltaic, and even some of the business owners wishing to travel to the mission were unable to work because of their full membership.
“A large number of industrial enterprises have already started in the sea, not after the epidemic.” As illustrated by the intelligent mobile phones, most of the brands come from the sea around 2015 because the domestic market for smart mobile phones has become saturated, while the product ends have no revolutionary technology that can stimulate new consumption needs and therefore look for new markets overseas. By contrast, foreign-owned enterprises operating in China are more time-consuming and productive in other countries.
Electricity and automobile production lines in an enterprise in the Viet Nam City. Figure : Visual China
As early as October 2012, the three constellationists, Lee H. H.E., visited Viet Nam to promote investment projects in Viet Nam’s second plant. The three constellation electronics company, which had revealed in the media that the greatest consideration in the construction plant in Viet Nam was “costs”, when Chinese labour costs increased and prices declined, and that “the new plant, located in the far-old province of the largest agricultural province in northern Viet Nam, was accessible not only to major cities in Viet Nam but also to the extent that the labour force was sufficient to reduce human costs”.
To date, three stars have invested approximately $18 billion in Viet Nam, with six factories, two of which focus on the manufacture of smart mobile phones for the supply of North America and European markets. In 2021, Viet Nam produced three constellations of 60 per cent of the company’s total production, and although three stars have repeatedly cut down in Viet Nam’s intelligent handicraft production in recent years, according to the Government of Viet Nam, in 2023, the number of smart handicrafts in Viet Nam’s three-star plant was still 40 per cent.
At the same time, three-star plants in China were closed. At the end of September 1950, three stars announced a moratorium on production of the last mobile plant in China, the plant in the State of Wide-East Pleaf, which was established in 1992 as the largest global cellular production base for three stars. Subsequently, in August 2020, three stars closed the last computer factory in China and, at the end of November 2020, three constellations closed the television factory in Tianjin, the only television factory in China.
Apple also operates in the layout of markets outside China. The production line of some Airpods was first relocated from China to Viet Nam in 2020, and in June last year the production of the flat computer “iPad” was transferred from China to Viet Nam. Reuters also reported that apples will be produced iPhone in India “The second global intelligent mobile market”. The Morgan Chase analysts expect that by 2025 the percentage of apples produced outside China will be increased to 25 per cent, including Mac, iPad, Apple Watch and AirPods.
“The majority of foreign-owned enterprises that move part of their production to areas outside China are clearly different for the purpose of increasing international competitiveness.” According to Yang’s analysis, most of these TNCs use overseas markets as a springboard for production in order to export products to countries such as the European-American Republic of Korea.
Following the closure last year of a part of the Chinese line of production, the other camera factory, Son, also relocated most of the camera line to Thailand. According to Japanese media, Son was previously exported globally from two bases in China and Thailand, but later Chinese factories will produce only products for Chinese markets, and nearly all of the cameras sold outside China, such as Japan and Europe, will be converted into Thai factories.
“In the recent period, some industries have seen signs of “the south-east of the aperture” and have moved to areas such as South-East Asia, where there are multiple factors.” At the 2023 annual meeting of the High-level Forum for Development in China, the former mayor of the city of Kyushu, who analysed the fact that the United States was engaged in a trade war on China until now, the vast majority of the tariffs imposed had not been lifted, many of the industries that had been “in China, for the United States” had been transferred to South-East Asia for the purpose of obtaining certificates of origin and avoiding customs clearance.