Beware of Chinese manufacturing falling into the "sandwich trap"

——Comment on “The End of China's Low-Cost Manufacturing Cycle” In January 2012, Roland Berger Strategic Consulting released the “End of China's Low-Cost Manufacturing Cycle” report that the low-cost advantage of China's manufacturing industry is weakening. Some industries have begun to decline, and many multinational companies are rethinking their development strategies in China. Earlier, Alix Partners, a global business consultancy, also reported that by 2015, the cost of China's manufacturing industry will catch up with the US, and manufacturing costs in countries such as India, Vietnam, Mexico and Russia will be more competitive than China's. . At the same time, after the international financial crisis, developed countries such as the United States, Britain and France are also stepping up efforts to revive the manufacturing industry. China's manufacturing industry faces “two-way squeeze” from developed and developing countries, and it is in danger of falling into the “sandwich trap”. In this context, as a global manufacturing country, how can we objectively understand the challenges, give play to the existing advantages of the manufacturing industry, grasp the development opportunities, how to transform the development strategy of China's manufacturing industry, and accelerate the transformation and upgrading of the manufacturing industry become an important topic worth studying. . 1. China's manufacturing industry is facing "two-way squeeze". If China's manufacturing industry cannot quickly achieve transformation and upgrading, the competitiveness of low-end and mid-end manufacturing products will be weakened under the condition that high-end manufacturing products are not yet competitive. The risk of “industry hollowing out” will continue to increase, and the status of China’s global manufacturing power will be seriously threatened. Whether it is Roland Berger’s “End of China’s Low-Cost Manufacturing Cycle” report or the “2011 US Manufacturing Outsourcing Cost Index” report released by Alix Partners, the core message is the manufacturing industry in China. The low cost advantage is weakening. Although China's manufacturing output accounted for 19.8% of global manufacturing output in 2010, surpassing the US's 19.4% to become the world's largest manufacturing country. However, the problem of China's manufacturing industry is still not strong, and it is facing the risk of falling into the “sandwich trap”. (1) Developed countries such as the United States, Britain and France are accelerating the revitalization of manufacturing. Roland Berger suggested in the report that multinational corporations should consider moving enterprises out of China. This is in line with the idea of ​​reviving manufacturing in the developed countries led by the United States. It coincides. Since the outbreak of the international financial crisis, developed countries such as the United States, Britain and France have rethought the lessons of the financial crisis and adopted a series of policy measures to revive the manufacturing industry. In June 2011, the United States officially launched the "Advanced Manufacturing Partnership Program" to accelerate the capture of the commanding heights of advanced manufacturing in the 21st century. In December of the same year, the White House announced the establishment of a manufacturing policy office to promote the recovery and export of US manufacturing. In the 2012 State of the Union Address, Obama once again stressed that the United States is facing a great opportunity to move manufacturing back from China and other places. In 2011, the British government issued the "Main Strategies and Action Plan for the Development of Advanced Manufacturing in the UK", which re-recognized and positioned the manufacturing industry and emphasized the re-emphasis on the development of the manufacturing industry. The French government also announced in March 2010 that it would increase manufacturing output by 25% within five years. The revitalization of the manufacturing industry by the developed countries such as the United States, Britain and France will bring new challenges to China's manufacturing industry in terms of undertaking industrial transfer, technological advancement and product export, mainly in: First, attracting some high-end manufacturing enterprises to return, possibly The "reverse transfer" of China's high-end manufacturing industry has aggravated the imbalance of China's industrial structure. Second, developed countries have stepped up their efforts to set new thresholds in terms of technology, rules and markets, making it more difficult for China's manufacturing industry to upgrade to the higher end of the value chain, which will put pressure on China's manufacturing industry to catch up with development. Third, the escalation of international trade frictions, such as the establishment of trade law enforcement agencies in the United States, specifically responsible for investigating the "unfair trade" of China and other countries, will increase the pressure on China's manufacturing products exports. (II) The vast number of developing countries have become new positions in international industrial transfer Alix Partners' research report pointed out that by 2015, China's manufacturing costs will catch up with the United States, and the competitive advantage will no longer be. At the same time, Vietnam, India, Mexico and Eastern Europe and other countries and regions have become a new position to accept industrial transfer in industrialized countries with a lower cost advantage than China. Roland Berger's research also shows that some industries in China are shifting from "Made in China" to "Made in Vietnam", including petrochemicals, cameras, watches, clothing, notebooks, toys and other industries. In the past two years, Intel has established an assembly and testing plant in Vietnam. Hong Kong Li & Fung has transferred its production to Vietnam, and Vietnam has replaced China as the largest production base for Nike shoes. As China's low-cost advantage gradually weakens, the trend of developing countries to undertake international industrial transfer with lower cost advantages will continue. They will make full use of the opportunities of developed countries and emerging economies to adjust the industrial division of labor and give play to their low-cost advantages. In the middle and low-end products market to undertake industrial transfer. In this context, if China's manufacturing industry cannot quickly achieve transformation and upgrading, the competitiveness of low-end and mid-end manufacturing products will be weakened under the condition that high-end manufacturing products are not yet competitive, and the risk of manufacturing industry hollowing out. It will continue to increase, and the status of China’s global manufacturing power will be seriously threatened. Second, the advantages and opportunities of China's manufacturing industry China has the outstanding advantages of the big country market, which is difficult to compare with small and medium-sized countries. Some multinational companies mainly choose to produce in China based on considerations close to the Chinese market. Of course, while waking up to the serious challenges of China's manufacturing industry facing "two-way squeeze", we must also objectively analyze the strategic advantages of China's manufacturing industry in the past few decades and the development opportunities brought about by global manufacturing adjustment. (1) Strong manufacturing industry base and technology foundation China has established a complete manufacturing industry system. The industrial scale of manufacturing industry ranks first in the world, and a number of national engineering (technology) research centers and national key experiments have been established. The laboratory, the national engineering laboratory, and a large number of enterprise technology centers have basically formed a technological innovation system with enterprises as the mainstay, and have achieved a number of innovative achievements with independent intellectual property rights and international advanced. The industrial base and technical foundation of China's manufacturing industry are the result of long-term accumulation. It is impossible for developing countries such as Vietnam and India to establish in a short period of time. (II) Huge domestic and international market demand potential China has the outstanding advantages of the big country market, which is difficult for small and medium-sized countries to compare. Some multinational companies mainly choose to produce in China based on considerations close to the Chinese market. With the acceleration of China's industrialization and urbanization process and the improvement of people's living standards, the development of China's manufacturing industry still has a huge market space. At the same time, emerging economies such as Brazil and India are higher than the global average growth rate, which will also drive the export growth of low-end products in China's manufacturing industry. (3) Strong government policies support the central government to propose a strategy of integration of informatization and industrialization, and successively promulgated and implemented industrial transformation and upgrading plans, the “12th Five-Year Plan” for high-end equipment manufacturing, and special projects for intelligent manufacturing development. Transformation and upgrading provide a powerful impetus. These measures will inject new power into the independent innovation of the manufacturing industry, realize digital and intelligent development, and accelerate the transformation and upgrading of the manufacturing industry. (IV) Facing the good opportunity of manufacturing internationalization “going out” has become the national strategy of China's economic development. Although the European debt crisis has brought certain pressure on the export of China's manufacturing products, it also gives the development of China's manufacturing industry. New opportunities have come. In the context of the European debt crisis, European manufacturing companies are embarking on a new round of industrial transfer, and “Bringing new products and technologies to China” has gradually become the independent choice of some European manufacturing companies. At the same time, the European debt crisis has also provided a rare opportunity for Chinese manufacturing companies to “go global”, and Chinese manufacturing companies have more opportunities to purchase and invest in European assets. Third, the countermeasures of China's manufacturing industry fully implement the "12th Five-Year Plan for Industrial Transformation and Upgrading" issued by the State Council, and use "Planning" as a program of action to guide the development of China's manufacturing industry in the next 5-10 years. Preface implementation. Based on the current situation of China's manufacturing industry and the development stage and strategic advantages of China's manufacturing industry, in the next ten years or longer, China's manufacturing industry should continue to maintain and expand existing advantages and accelerate the transformation from factor-driven to innovation-driven. It is recommended to adopt the following six strategies: (1) Strengthening the top-level design and researching and formulating the medium- and long-term development strategy First, it is necessary to establish the basic and strategic position of the manufacturing industry in China's economic development in the form of regulations. The second is to set up a manufacturing development coordination office at the national level to coordinate the various resources of the country and expand and enhance the dominant position of China's manufacturing industry. The third is to set up a manufacturing development expert group to study and formulate the medium and long-term strategic planning of China's manufacturing industry. The fourth is to summarize the implementation experience of China's “Top Ten Industrial Revitalization Plan” since the world financial crisis and establish a long-term mechanism to promote the development of the manufacturing industry. (II) Accelerate the implementation of relevant national policies and promote the transformation and upgrading of the manufacturing industry. First, comprehensively implement the “12th Five-Year Plan for Industrial Transformation and Upgrading” issued by the State Council, and use the “Planning” as a guide for the development of China's manufacturing industry in the next 5-10 years. The program of action is vigorously promoted and implemented in an orderly manner. Second, local governments must effectively change the inertial thinking of manufacturing development, from relying on the consumption of factors on the pavilion and the project to relying on technological innovation, improving the quality of labor and management, and shifting from relying on factor driving to innovation driving. The third is to study and formulate the “Manufacturing Transformation and Upgrading Action Plan” and introduce corresponding policies and measures to accelerate the transformation and upgrading of the manufacturing industry. (3) Vigorously promote independent innovation and promote the development of high-end manufacturing industry. First, accelerate the introduction and implementation of the “12th Five-Year Plan” for strategic emerging industries in the manufacturing sector, such as the “Twelfth Five-Year Plan” for high-end equipment manufacturing, energy conservation and new energy. The “Twelfth Five-Year Plan” for automobiles. The second is to make overall use of relevant scientific and technological resources, and do a good job with the national major science and technology project "high-end CNC machine tools and basic manufacturing equipment", the national science and technology support plan ""CNC generation" mechanical product innovation project" and so on. The third is to do a good job in the "special development of intelligent manufacturing equipment", through the development and application of intelligent manufacturing equipment, to enhance the level of intelligence in the domestic manufacturing process. The fourth is to focus on industrial technology innovation and support strategic industries such as aviation, automobiles and machine tools with independent intellectual property rights. (IV) Establishing and improving the monitoring and early warning mechanism for multinational corporations in China First, speed up the establishment of a monitoring and early warning mechanism for multinational corporations in China, pay close attention to the trends and strategic adjustment directions of multinational corporations in the United States, Japan, Germany and other countries. Multinational companies conduct timely communication and coordination to improve their business environment in China. The second is to study and analyze the negative impact of the transfer of multinational corporations on the development of China's manufacturing industry, timely deployment, and the introduction of corresponding policy measures to maintain the industrial safety of China's manufacturing industry. The third is to strengthen the docking of industrial transfer between the central and western regions and multinational companies in China, and encourage multinational companies to transfer production capacity to underdeveloped regions in China. (V) Use comprehensive policy means to enhance the competitiveness of China's manufacturing industry First, we must increase capital investment, guide social capital into the manufacturing industry, and accelerate the targeted investment and penetration of loans to the manufacturing industry. The second is to effectively reduce the tax burden of manufacturing enterprises, especially small and micro enterprises with international competitiveness in products, to provide policy support in taxation, and to inject more power into the development of enterprises. The third is to study and formulate China's manufacturing R&D credit policy, and use financial means to encourage manufacturing enterprises to increase R&D investment and improve their independent innovation capabilities. Fourth, it is necessary to use tariffs and exchange rate means to expand product exports, to ensure the relative stability of the RMB exchange rate, and to appropriately reduce export tariffs on related manufactured products without violating WTO regulations. The fifth is to study and formulate the development strategy of China's manufacturing talents, introduce the "China's medium and long-term manufacturing development talent planning", strengthen talent introduction and education and training, and strengthen the manufacturing talent team in China. (6) Guiding enterprises to go global and promote the internationalization of manufacturing industry First, we must continue to strengthen the information services for manufacturing outbound, timely release foreign product demand, investment cooperation information, expand the export of China's manufacturing products, and increase the success rate of foreign investment. The second is to improve and improve the investment platform, and guide small and medium-sized manufacturing enterprises to “crowd out” and reduce investment risks. The third is to use the opportunity of the European debt crisis to guide manufacturing companies to purchase and invest in European assets through various channels, such as IMF and G20, to reduce risks and ensure return on investment.

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