News Center



Home News Center News

Manufacturing: Here to Stay

May 05-2020   



 

Despite the alarming clamors against globalization, Prof. Yu Miaojie of the NSD believed that manufacturing won’t flow back to developed countries as many in the West might wish. He made the case in a commentary for a Chinese think-tank.

 

Subsidies are being offered by the American government and some others to manufacturers to relocate back home, and higher tariff and non-tariff barriers might be erected to discourage offshore production. However, the carrot and stick will hardly win over the hearts of American and European firms of which the primary focus is profit maximization. In the long-term, they won’t be able to survive the economic structures of their home countries characterized by exorbitant costs of production and logistics. Albeit some firms might toy with the thoughts of moving back, eventually they will have to return to the developing countries, among which China remains the top choice owing to its huge domestic market and enormous supply of high-quality labor.

 

Prof. Yu also analyzed some other economic aspects under the stress of the pandemic. Regarding trade, a large surplus was registered in March, overturning the slide in the previous two months and pointing to the resurrection of Chinese export. He remained optimistic that the total trade surplus might maintain the same level as last year, although there’s also a possibility that the total trade volume will dip. Export firms are advised to adopt three ways to cope with the tough prospects: One, keep putting down roots in developed countries where demand for end consumption products hasn’t shown too conspicuous a decrease; Two, diversify export markets to include BRICKS countries and new emerging markets; Third, explore new methods like online trading and digital trading.

 

To further open up, China should continue to attract foreign investment, which by far totals USD140 billion, or just 1% of China’s GDP. As the first-phase deal between China and the US comes into implementation, more foreign investments can be expected, notably in such fields as banking, insurance and securities.

 

Prof. Yu also took on such issues as the role (in his view, a decreasing one this year) of consumption on economic growth, the use of food stamps or cash handouts to spur consumption (go for food stamps, he said), and ways to expand reform and opening up.

 

 

Manufacturing: Here to Stay

May 05-2020   



 

Despite the alarming clamors against globalization, Prof. Yu Miaojie of the NSD believed that manufacturing won’t flow back to developed countries as many in the West might wish. He made the case in a commentary for a Chinese think-tank.

 

Subsidies are being offered by the American government and some others to manufacturers to relocate back home, and higher tariff and non-tariff barriers might be erected to discourage offshore production. However, the carrot and stick will hardly win over the hearts of American and European firms of which the primary focus is profit maximization. In the long-term, they won’t be able to survive the economic structures of their home countries characterized by exorbitant costs of production and logistics. Albeit some firms might toy with the thoughts of moving back, eventually they will have to return to the developing countries, among which China remains the top choice owing to its huge domestic market and enormous supply of high-quality labor.

 

Prof. Yu also analyzed some other economic aspects under the stress of the pandemic. Regarding trade, a large surplus was registered in March, overturning the slide in the previous two months and pointing to the resurrection of Chinese export. He remained optimistic that the total trade surplus might maintain the same level as last year, although there’s also a possibility that the total trade volume will dip. Export firms are advised to adopt three ways to cope with the tough prospects: One, keep putting down roots in developed countries where demand for end consumption products hasn’t shown too conspicuous a decrease; Two, diversify export markets to include BRICKS countries and new emerging markets; Third, explore new methods like online trading and digital trading.

 

To further open up, China should continue to attract foreign investment, which by far totals USD140 billion, or just 1% of China’s GDP. As the first-phase deal between China and the US comes into implementation, more foreign investments can be expected, notably in such fields as banking, insurance and securities.

 

Prof. Yu also took on such issues as the role (in his view, a decreasing one this year) of consumption on economic growth, the use of food stamps or cash handouts to spur consumption (go for food stamps, he said), and ways to expand reform and opening up.