Few want to miss Industry 4.0 bus
China Daily

In recent days, there has been much clamor about pulling foreign investment and industrial and supply chains out of China because of the impact of the novel coronavirus pandemic. However, so far there has not been any exodus of foreign capital or relocation of industrial and supply chains, according to a Ministry of Commerce spokesperson. On the contrary, many multinational companies want to expand their industrial chains in China because of the country's stable business environment, comprehensive competitive edge and super-large market advantages and demand potential.

The global industrial and supply chains have been established thanks to the international division of labor. But the United States in recent years has tried to relocate the industrial and supply chains away from China in a bid to weaken China's manufacturing. Because of the pandemic, the US and some countries have been promoting diversification of supply chains, saying the temporary disruption of China's supply chain is a threat to the global economy. Others have asked their enterprises to give up their inherent manufacturing advantages and assets in China and move to other places where the industrial and supply chains are not well developed. This will be not just a risky, but also a suicidal move.

It is true that some labor-intensive low-end manufacturing industries such as textiles, shoes, hats and hardware have moved out of China in the past decade, but their middle-and high-end production links have stayed in China. Last year, some enterprises that had relocated to some Southeast Asian countries returned to China due to the lack of supportive industrial infrastructure and low production efficiency in those regions.

In the electronics manufacturing sector, China's advantage no longer relies on skilled workers on assembly lines, as these enterprises have introduced a large number of automated production lines and intelligent management systems. These high-tech production lines do not rely on low labor costs, but on excellent engineers. So they cannot move to other places which don't have enough qualified engineers. More important, as China upgrades its manufacturing to Industry 4.0 through new infrastructure construction, the gap between China and those countries and regions that want to replace China is expected to widen.

There is no need for China to excessively worry about external public opinion. As long as it adheres to a greater opening-up policy, creates and constantly improves its investment environment, provides leading facilities for the Industry 4.0 era, and actively expands domestic demand, the competitiveness of its manufacturing sector will continue to become stronger.