The hottest epidemic cannot shake China's position

Xu Changtai, chief market strategist for Asia Pacific region of Morgan asset management company of the United States, published an article on the South China Morning Post station in Hong Kong on the 21st, saying that despite the covid-19 epidemic and trade war, China's position as a world factory is difficult to shake. The article is compiled as follows:

moving is painful. So imagine how it would feel to move a factory with equipment worth millions of dollars to another country with different tax policies and other regulations

the discussion about multinational companies moving their factories from China to other places has been going on for some time. However, in the context of the slowdown of global economic growth last year and the signing of the first phase trade agreement between the United States and China at the beginning of this year, some enterprise decision makers may hesitate to promote the relocation plan due to the difficulty of taking the initiative to measure and control common sense

in addition, the fact that U.S. President trump threatened to impose tariffs on goods from many trading partners means that there is almost no safe haven in this increasingly protectionist world

▲ trump data map (Xinhua News Agency)

although the novel coronavirus epidemic makes this discussion more urgent, China should continue to play a leading role in the global manufacturing industry. 1. Speed regulation system: servo electromechanical and reducer are adopted to play a leading role

this is because, just like people moving, enterprises need to weigh the advantages and disadvantages of relocation. Labor and supply chain are important considerations, but not the only ones

for example, China's logistics infrastructure is a key reason why enterprises can afford timely delivery and low inventory. China ranked 26th in the world bank's 2018 global logistics performance index, far higher than Vietnam (39th), Indonesia (46th) and other countries

another consideration is China's domestic market. When China's manufacturing industry began to prosper after its accession to the WTO in 2001, its goods were shipped to developed economies. But now the film used in greenhouses can be considered as a source of easily recycled materials, and China's domestic consumer market is also growing

▲ China's position as a world factory is difficult to shake. The picture shows that on February 17, the Tiexi factory of BMW Brilliance Automotive Co., Ltd., the world's largest production base in Shenyang, resumed work. (Pan Yulong/photo)

therefore, it is still wise to continue to regard China as an important production location. Maintaining a close relationship with Chinese customers is a very good reason to continue manufacturing in China

however, Chinese consumers are changing. They began to spend more money on service industries such as health care, education and financial services, thus promoting changes in business operations and workers' preferences

this means that in the long run, China will change and upgrade its manufacturing and production processes. China is unlikely to lose its status as the world's factory, but it may emerge in a form quite different from what we have known for decades

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