Made in China during the epidemic: "World Factory" OK?

Made in China during the epidemic: "World Factory" OK?

Xinhua News Agency, Beijing, March 26, by Subject : Made in China under the epidemic: "World Factory" OK?

Xinhua News Agency reporter Zhang Xinxin

The sudden outbreak has affected many areas. Made in China has also experienced many fluctuations.

On the one hand, there are a lot of companies' "hard core" operations for rapid production resumption and resumption of production. On the other hand, some companies have difficulty reaching production and there is a risk of order delivery. With the spread of overseas epidemics, many export-oriented manufacturing companies are feeling the pressure.

Under the epidemic, is the "world factory" okay?

How is the order?

Digital printing machine with intelligent printing and dyeing, orderly connection of manipulators ... In the workshop of Ningbo Shenzhou International Park, every piece of clothing is “ready to go”.

Shenzhou is a foundry for many well-known brands such as Nike and Adidas. It is the largest garment processing and manufacturing enterprise in China. Since the outbreak, relying on the "hard core" control capabilities of the entire supply chain from yarn, fabrics, accessories to garment manufacturing, Shenzhou has resumed production in an orderly manner. At present, the production capacity has been completely restored. The Ningbo factory has a daily output of 800,000 pieces of clothing. The company's chairman, Ma Jianrong, said there was no problem with order delivery, and orders did not shrink.

In the huge "camp" made in China, some companies rely on the control of the supply chain to quickly achieve production and resolve risks. There are also some industries and enterprises facing considerable pressure.

In December 2019, China's manufacturing new orders index was 51.2%; in January 2020, it was 51.4%; in February, this number dropped significantly. One side is the delivery of previous orders, and the other is the grasp of new orders. Enterprises need to resume work, and moreover, they must reach full capacity.

The reporter found in the survey that some leading manufacturing companies were affected by the closure of some foreign stores and their orders were subject to postponement risks. Domestic small and medium-sized enterprises, especially export-oriented small and medium-sized manufacturing enterprises, faced more pressure from the supply chain.

Hubei is an important global auto parts production and supply base, and Hubei's once shutdown has put pressure on many OEMs. According to incomplete statistics, the production lines of some models of many auto companies have been affected.

"We have organized more than 7,000 core supporting small and medium-sized enterprises in the global industrial chain in China, combined with relevant local and departmental key services, pushed forward with all our strength, and are actively looking for alternative suppliers." The person in charge of the Ministry of Industry and Information Technology said.

The resumption of production and work has been advanced in an orderly and effective manner. With the gradual opening up of all links in the industry chain, difficulties are gradually being resolved.

According to public data, the average operating rate of industrial enterprises outside Hubei is 95%, and the operating rate of small and medium-sized enterprises is about 60%. As of March 12, with the exception of Hubei, 60% of key foreign-invested manufacturing enterprises in the country had a recovery rate of more than 70%.

"Since March, the production and operation of foreign-funded enterprises in China has gradually become normal, the completion of orders has improved, and corporate confidence has been restored," said Wu Hongliang, deputy director of the Foreign Investment Department of the National Development and Reform Commission.

Will it bring industry transfer?

Foreign media have reported that the epidemic has affected China's entire industrial chain. After the outbreak, some voices began to worry that companies would accelerate the relocation of factories overseas.

"The impact of the epidemic is mainly a temporary setback or delay in production, and production capacity in China has not been damaged. We cannot simply draw conclusions due to the short-term transfer of individual orders." Said Luan Qun, director of the Institute of Policy and Regulation of the CCID Research Institute of the Ministry of Industry and Information Technology.

It is undeniable that in recent years, some international brands and local manufacturing companies have chosen to set up factories in Southeast Asia. This is a diversified layout of enterprises from their own considerations and cannot be simply understood as a transfer.

Experts believe that manufacturing is a system with multiple links crisscrossing. The complexity of this system determines that it takes a long time to establish a supply chain in a country and region, and once established, it is sticky. The long-term accumulation of foundations made in China will not be affected by short-term fluctuations.

One out of every four swimsuits sold in the world comes from Xingcheng, Liaoning. Shaogang Town, Henan Province produces more than half of the world ’s steel tape measure. Haining, the “hometown of leather”, and Datang, the “international socks capital” ... In China, there are many small manufacturing cities that seem to be "inconspicuous". As one of the nodes in the supply chain system, they jointly support Made in China.

China is an important part of the global production system and the center of many global supply chains. It may not be difficult to transfer a factory, but it is not easy to transfer the ecosystem.

Many leaders of large manufacturing companies have stated that there is still a large gap between Southeast Asia and China in terms of supply chain matching and production coordination and efficiency. Although the epidemic will bring about impacts, other countries and regions will not have the ability to undertake manufacturing ecology.

In addition, China is also the largest consumer of many commodities, and market demand will give birth to more vitality.

What are the implications of the epidemic?

An outbreak is like a big test. Withstand the pressure and challenge, Made in China is also reflecting.

Supply chain security is essential. With the deepening of the international division of labor and the continuous expansion of the global supply chain system, whether the supply chain is in an advantageous position is an important indicator of a country's competitiveness.

Since the outbreak, many domestic clothing, electronics, and automobile companies have been able to quickly convert masks, relying on a stable and flexible supply chain. In the future, to better meet risk challenges and seize opportunities, we also need a strong supply chain.

"We took the lead in setting up a working group for the co-operation and resumption of production in the industrial chain to ensure the stable resumption of production in the supply chain," said Xin Guobin, deputy minister of the Ministry of Industry and Information Technology.

The reporter learned from the Ministry of Industry and Information Technology that the Ministry of Industry and Information Technology is formulating corresponding policies from the perspective of improving supply chain safety and industrial safety, focusing on ensuring the supply of important raw materials, parts and major equipment, promoting coordinated development, and maintaining global supply chain safety and stability.

Digital transformation is imminent. "The epidemic will 'force' some companies to raise their awareness of risk and pay more attention to practicing internal skills." Said Yang Yuanqing, chairman and CEO of Lenovo Group, establishing a scientific decision-making mechanism and processes, increasing the informatization and digitalization of enterprise operations, and firmly taking the intelligent manufacturing line. Is the only choice.

Recently, the term "new infrastructure construction" has frequently appeared in a series of policies concerning the restoration of economic development by the central and relevant departments and local governments. The Ministry of Industry and Information Technology issued a notice on accelerating the development of 5G, accelerating the construction of 5G networks and fostering a new ecology.

A series of initiatives aiming at the front end of science and technology and building a digital foundation, the purpose is to provide new momentum for high-quality development through digitalization.

Manufacturing and consumption, finance and other links are closely related. To ensure the stable development of the manufacturing industry, all links in the economy and society must be coordinated.

While increasing the "new infrastructure", 23 departments including the National Development and Reform Commission recently jointly issued the "Implementation Opinions on Promoting Consumer Expansion and Quality Enhancement and Accelerating the Formation of a Strong Domestic Market", which specifically proposed the establishment of a "smart +" consumer ecosystem and promoted the industry. And consumption double upgrade.

"Building a solid foundation, smoothing the circulation, and strengthening integration can make Chinese manufacturers inject more power," said Xin Yongfei, director of the Institute of Policy and Economics of the China Academy of Information and Communications Technology.