Dongxiq·China Dialogue丨Will China still be the world's factory and world market in the future?

　　China News Agency, Beijing, January 19th: Will China still be the world's factory and world market in the future?

　　China News Agency reporter Peng Dawei Li Jinlei

　　According to data released by the National Bureau of Statistics of China on January 17, according to preliminary calculations, China's GDP in 2022 will be 121,020.7 billion yuan, an increase of 3.0% over the previous year at constant prices, and the economic growth is faster than most major economies. body.

At the same time, China's total population declined last year.

　　Will China still be both the world's factory and the world's market in the future?

How will the global epidemic, geopolitical competition, and the ongoing trade war between China and the United States affect the views and plans of Chinese and American companies on each other's markets?

　　China News Agency's "East-West Questions·dialogue" invited Zheng Yi, President of the American Chamber of Commerce in Shanghai, and Hu Run, the founder and chief researcher of "Hurun Report", to have a dialogue on related topics.

　　Zheng Yi believes that American companies will definitely continue to regard China as their primary strategic market.

China has a world-class infrastructure and ecosystem, and its manufacturing capabilities are very competitive.

China will continue to play the role of "world factory" and "world market" for many years to come.

Video: [Dongxiq·chinadialogue] Hurun: Foreign companies still have strong interest in investing in China

　　Hurun said that foreign companies still have a strong interest in investing in China.

These companies have very long-term strategies because China is an important market for them, not a place where I make a quick buck and walk away.

Excerpts from the conversation are as follows:

Foreign investment still values ​​the Chinese market

　　China News Agency reporter: How do US companies view their prospects for doing business in China?

　　Zheng Yi: The United States now has a very serious inflation problem, and inflation has reached the highest level in the past 40 years.

The Fed has been aggressively raising interest rates in an attempt to slow inflation and revive the labor market.

　　At the same time, policymakers are asking U.S. companies to "reshore" or "nearshore."

"Reshore" means bringing the company back to the United States; "nearshore" means moving the company closer to the United States.

Ironically, the word "globalization" is not a good word (in Washington) these days.

　　Currently, U.S.-China relations are at a low ebb, and the U.S. government has introduced many bills against China, but for U.S. companies, they continue to regard China as a very important strategic market, including many members of the U.S. Chamber of Commerce.

　　China News Agency: According to data from the Ministry of Commerce of China, the actual US investment in China in the first half of last year increased by 26.1% year-on-year, which is actually a very high figure.

What do you think?

　　Hurun: The data shows that foreign companies still have a strong interest in making new investments in China.

You can look at the top 100 foreign-invested and Hong Kong, Macao and Taiwan enterprises in China. These companies have been operating in mainland China for an average of 57 years, and their average "age" is 91 years old.

There are about 15 to 20 companies that have been operating in China for more than 100 years.

　　These companies have very long-term strategies, and China is an important market for them.

They can add value here as well as contribute.

What impresses me most is the long-term investment and long-term vision of these companies.

It's not a matter of "I'm here to make a quick buck and walk away", some companies do that, but not these top 100 companies.

　　Zheng Yi: American companies will definitely continue to regard China as their primary strategic market.

Members of the American Chamber of Commerce have been doing business here for many years, making long-term investments in China.

They operate in China and contribute to China's development, which is no longer just a part of the global supply chain.

The Chinese market has great potential, so they have a good sales performance here.

Foreign investment remains interested in the Chinese market.

Data map: Shanghai Yangshan Deep Water Port.

Photo by China News Agency reporter Tian Yuhao

U.S. slams China as 'routine meal' bad for business

　　China News Agency reporter: How does the United States view China-US relations today?

How will Sino-US relations affect the business and investment environment in China and the United States?

　　Zheng Yi: Unfortunately, there is a consensus in the United States that China should be regarded as a strategic competitor, so all policies are formulated around this point.

In the past, China-bashing was usually done during political campaigns, but now China-bashing has become "everyday", which is not good for bilateral business relations.

　　We have always believed that business interaction is good for both countries.

Chinese investors in the United States are also a good thing for the United States.

It does help the U.S. economy, it creates jobs, it brings in taxes, and it helps consumers.

But the current political environment focuses more on protecting its own market.

The US is implementing a very protective policy, so it will take a while for things to become clear.

Chinese companies have to figure out what to do next, but we tend to continue to work with Chinese companies to grow the Chinese market, and we like to see Chinese companies do well in the United States.

　　China News Agency reporter: Can the business relationship between China and the United States be used as one of the "guardrails"?

Can the business world somehow improve the relationship?

　　Zheng Yi: The commercial relationship has always been the cornerstone of the relationship between China and the United States. The trade and investment between the two countries have grown tremendously and have played an important role in strengthening the bilateral relationship.

　　China is the third largest trading partner of the United States, after Canada and Mexico.

The United States is China's third largest foreign trade partner, second only to ASEAN and the European Union.

Despite the impact of the epidemic, the total trade volume between China and the United States in the first seven months of 2022 actually increased by nearly 12%.

　　The two countries are very integrated economically, both in the area of ​​trade and investment.

It is in the best interests of both countries to maintain these strong commercial relationships.

I certainly hope that this commercial relationship will become a "guardrail" for the relationship between the two countries to move forward.

Data map: American customers visit the "China Textile and Apparel Trade Fair".

Photo by China News Agency reporter Liao Pan

China will continue to act as the world's factory and world market

　　China News Agency reporter: The documentary "American Factory" sparked heated discussions in China and the United States, and Cao Dewang's comparison of production costs between China and the United States also became a hot topic after being reported by the Chinese media.

Will China still be the factory of the world in the future?

Has the position of China and the United States in the industrial chain and value chain changed?

　　Hurun: If you look at the wealth created in China over the past 20 years, the real estate industry was at the very beginning.

About 10 years ago, manufacturing surpassed real estate.

Today, real estate is down the wealth list, while manufacturing continues to be strong.

However, there has been a trend in the past two years, and the healthcare industry has grown significantly.

　　Zheng Yi: From the perspective of foreign investors, China started out as a low-cost manufacturing base, relying on cheap labor to become the world's factory.

Starting from the US-China trade war, the US imposed higher tariffs on Chinese products, so manufacturers had to shift some of their business to other countries like Vietnam.

Since the outbreak of the epidemic, manufacturers have begun to consider how to adjust their global supply chain strategies.

　　From China's point of view, China does not want to be just a low-cost manufacturing base, but to develop upstream in the value chain, truly shifting from labor-intensive, low-cost, heavily polluting, and energy-intensive industries to higher-end manufacturing, and to high-end manufacturing. The transfer of value-added manufacturing is in China's interest.

　　I think China will continue to be a major manufacturing base for many products, but may move away from low-cost manufacturing.

China has a world-class infrastructure and ecosystem, and its manufacturing capabilities are very competitive.

Therefore, China still has a long way to go and will continue to act as the world's factory for many years to come.

Video: [West Questions·China Dialogue] Zheng Yi, Chairman of the American Chamber of Commerce in Shanghai: China will continue to play the role of the world's factory and an important strategic market in the future

　　China News Agency reporter: As China optimizes and adjusts its epidemic prevention policies, the vitality of consumption is also increasing.

In the future, in addition to continuing to act as the world's factory, will China also serve as a very important strategic market for foreign companies, including American companies, for a long time?

　　Zheng Yi: Members of the American Chamber of Commerce have been operating in China for many years, and they are making long-term investments in China.

These enterprises operate in China and contribute to China's development.

In the 1970s and 1980s, foreign companies came to China to build production bases, mainly to export to markets outside of China; but things have changed now, and most of our corporate members are in China to contribute to the development of this country.

As Mr. Hoogewerf just pointed out, because the Chinese market has great potential, they have a good sales performance here.

I think from this perspective, foreign investment is still very interested in the Chinese market and will continue to be so.

　　China News Service reporter: In 2013, Hurun once said that the total number of billionaires with assets exceeding US$1 billion in China has surpassed that of the United States, ranking first in the world, but the proportion of Chinese billionaires engaged in charity needs to be improved.

Over the past ten years, in what areas have Chinese entrepreneurs made progress in their philanthropy?

What are the successful experiences of American companies engaging in philanthropy for reference?

　　Hurun: Charity is something we have been paying close attention to. Wealth is being created too fast to be donated faster. This is a worldwide problem.

　　We have made a report on philanthropists who have donated the most in the world over the past 100 years, and there are several Chinese on it.

For example, Cao Dewang, who donated more than 1 billion US dollars, and some real estate developers, such as the famous Hong Kong philanthropist Run Run Shaw who has passed away.

The US has a tax advantage over China, but the crux of the matter is how to distribute this capital efficiently in a not-for-profit manner.

　　Zheng Yi: I firmly believe that China will have more Cao Dewang and more Bill Gates, the United States has a more mature system to support charity activities, as Hurun said, China needs a more favorable tax system to support business people make more charitable donations.

(Finish)