Editorial: What does Foxconn's "return" mean?
2024-08-08
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"Foxconn 'returns' to mainland China", Hong Kong's "Asia Weekly" recently took this as the theme, reporting that in late July Foxconn announced a project to invest 1 billion yuan in Zhengzhou, Henan to build a new business headquarters building, and that Apple's new iPhone 16 series will still be assembled in China. In fact, long before this report was released, the saying that "Foxconn and Apple are 'back'" had already circulated in the industry. Nothing can better represent a company's optimism about a country's economic prospects than real money. Foxconn's increased investment is a powerful response to the "de-Sinicization" of the supply chain, and a vote of confidence in the business environment in mainland China.The previous saying that "Foxconn ran away" was largely hyped by Western media. As multinational companies, Apple and Foxconn are normal to make some local adjustments due to changes in their global business layout and comparative advantages. Liu Yangwei, chairman and general manager of Foxconn Technology Group, once said that any industry of scale will have more than two suppliers. He also personally denied Foxconn's "relocation" to a reporter from the Global Times. Apple CEO Cook also said during his visit to China in March this year that the company has a win-win relationship with the Chinese supply chain, and there is no place more important than China. According to the supply chain list released by Apple in April this year, there are 155 factories in mainland China, ranking first. Since they have never really "left", how can they "return"?The discussion around Foxconn's "return" is more of a game of confidence in China's economy than a description of reality. Apple, as the "chain leader" of the "fruit supply chain", and Foxconn, as Apple's largest contract manufacturer, have played a relatively important role in the development of China's mid-to-high-end manufacturing industry represented by mobile phones. Their movements have a certain degree of significance as a weather vane in public opinion.If you look closely at the previous hype about "Foxconn ran away", you will find that it contains a lot of out-of-context and subjective assumptions. For example, Bloomberg said that "China's position as the world's factory has changed from a win-win situation for customers and suppliers to a huge risk." Except for those who have their minds full of "Cold War", who would think that China's industrial chain and consumer market are "risks"? Isn't this ridiculous? The purpose is to cooperate with Western political needs to "decouple and break the chain" with China and create topics for hyping up the "China economic collapse theory" and "peak theory."Why has China been able to attract the most manufacturing investment in the world and become the world's largest manufacturing country in decades? Because China's manufacturing industry has built a complete industrial chain and supply chain in the process of starting from light industry and gradually climbing to the peak of high-end manufacturing. It has all the industrial categories in the United Nations industrial classification, plus a super-large market, a large team of engineers and technical workers, and an often overlooked but extremely important, efficient and capable government, a stable social environment and the honest and hardworking qualities of the Chinese people. These hardware and software conditions together constitute the advantages and resilience of China's manufacturing industry, which cannot be taken away or denied by anyone, and will inevitably become increasingly prominent as China's economic transformation and upgrading process.Foxconn is a microcosm of multinational companies' continued "long" Chinese manufacturing industry. According to data released by the Ministry of Commerce, from January to June 2024, the number of newly established foreign-invested enterprises in the country increased by 14.2% year-on-year to 26,870. Among them, the proportion of actual use of foreign capital in manufacturing to the actual use of foreign capital in the country increased to 28.4%, while the proportion of actual use of foreign capital in high-tech manufacturing increased to 12.8%. In the future, more multinational companies will catch this "express train" of China's development, which is the general trend. The so-called "decoupling and chain breaking" and "de-risking" are a dead end. Regardless of whether some specific companies go out or come in, we will focus on firmly promoting reform and opening up and continuously creating a world-class business environment. The next "China" is still China.
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