On October 25, the National Development and Reform Commission, the Ministry of Commerce and other six ministries and commissions jointly issued "on the manufacturing sector as the focus of promoting foreign investment to expand the number of stable stock to improve the quality of a number of policy measures" to further increase the efforts to attract investment in manufacturing, focus on solving the outstanding problems faced by foreign-invested enterprises, and comprehensively strengthen the promotion of foreign investment and services to promote the use of foreign investment in high-quality development.
In such a context, it is important to attract European manufacturing industries to continue to invest in China. According to statistics released by the Ministry of Commerce, in the first eight months of this year, China's actual use of foreign investment was US$138.4 billion, up 20.2% year-on-year, with EU investment in China up 123.7% (including data on investment through free ports). At the same time, the trend of European manufacturing industries moving outward still has not stopped, and there are still opportunities for China to attract European outward investment.
In the view of Shandong Province Business Development Institute Gao Shujun, there are two main reasons for this trend. From the internal environment, the Russian-Ukrainian conflict and the destruction of the Nord Stream gas pipeline have interrupted Europe's gas imports from Russia, and the high price of natural gas imports from the United States, coupled with the fall in the price of the euro to a new low in 20 years, making European energy prices soar, European factory profits plummeted, coupled with the new crown pneumonia epidemic caused labor shortages in some parts of Europe, intensifying labor disputes, supply chain disruptions pushing up prices, European enterprises local The competitiveness of European enterprises' local production has been weakened. From the external environment, China, the United States, Eastern Europe and other countries and regions are very attractive in the world, they have relatively low and stable energy prices, but also to the European high-end manufacturing enterprises introduced including subsidies, tax breaks and the provision of credit lines with targeted preferential policies. In addition, these countries and regions also have a strong foundation to undertake business, including a complete industrial chain system, a large domestic market, and gradually accumulated technical capabilities.
Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce, said in an interview with China Trade News, "European business transfer is mainly divided into two aspects of export order transfer and capacity transfer, despite the impact of the international situation, but objectively speaking, capacity transfer is not an easy thing, but a long-term process of development planning. "
As the main destination country of European manufacturing transfer, China has multiple comparative advantages, Gao Shujun said, "From the demand side, the Chinese market has huge consumption potential. China has a super-sized domestic demand market of more than 1.4 billion people, over 400 million middle-income group, and a per capita GDP of more than $12,000. On the supply side there are three main advantages, one is a complete industrial chain system. China has the world's largest, most comprehensive and most complete manufacturing system, and occupies an important position in the global industrial chain supply chain. Second, the modern logistics system is well developed. China has the world's largest high-speed railroad network, highway network and world-class port cluster, and has built the world's largest 5G independent group network. Third, the original innovation capacity and basic research capability are constantly improving. From 2012 to 2021, the global innovation index ranking rose from 34th to 12th, and the total number of Chinese scientific and technological talents ranked first in the world."
According to Gao Shujun, taking up European manufacturing relocation, which is of great significance for China to promote high-level opening to the outside world and high-quality development of foreign investment. One, the migration of European manufacturing industries can create a large number of jobs and tax revenue for China, further boosting our economic growth. Secondly, when undertaking the business transfer based on the resource and energy advantages of the western region, northeast region, central region and eastern region, the efficient use of limited resources to achieve coordinated regional development. Third, European enterprises' investment in China can bring the world's top manufacturing technology to China, promote China's industrial upgrading and enhance the status of China's global industrial chain. Fourthly, by undertaking industries with higher added value and lower energy consumption per unit of added value, combined with China's manufacturing advantages in photovoltaic industry and wind power, China's energy transformation can be accelerated, which will help China achieve the goal of "double carbon".
