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Economic Daily: A rational view of Foxconn's entry and exit

2024-08-16

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International industrial transfer is essentially a market choice based on the dynamic changes in the comparative advantages of various countries. When some multinational companies in China relocate part of their industrial chains, we do not need to exaggerate and interpret it, but must firmly believe that Made in China still has irreplaceable advantages; when some multinational companies continue to expand their investment in China, we should not be complacent. Made in China still needs to enhance its core competitiveness and move up the value chain.

Recently, the news about "Foxconn's 'return'" has attracted attention. First, Foxconn's parent company Hon Hai Technology Group announced that Foxconn will invest about 1 billion yuan to build a new business headquarters building in Zhengzhou. Then, data released by International Data Corporation showed that in the second quarter of this year, Apple's mobile phone shipments in the Chinese smartphone market had fallen out of the top five. Some analysts believe that one of the main reasons for the decline in Apple's mobile phone sales in China is that the quality pass rate of mobile phones assembled in India is only about 50%.

In fact, it is normal for industrial chains to have inflows and outflows. International industrial transfer is essentially a market choice based on the dynamic changes in the comparative advantages of various countries. Judging from the previous rounds of global division of labor and industrial transfer, the driving force for adjustment is efficiency, that is, industries will be transferred to where the cost is low and the efficiency is high. In the context of economic globalization, capital will actively adjust the global production capacity layout in order to reduce production costs and expand market share. Therefore, whether it is China's successful attraction of a large amount of foreign investment over the years, undertaking large-scale global manufacturing transfers, and thus becoming the "world factory"; or some multinational companies in China currently relocating part of their industrial chains, and some Chinese companies deploying industrial chains abroad, they are all reasonable behaviors for enterprises to promote diversified layouts, and are also normal phenomena that conform to industrial laws.