The Relocation of Chinese Industries and Overseas Expansion of Enterprises (AI Translation)
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专栏作家 罗志恒
Columnist Luo Zhiheng
哪些产业出现外迁？外迁至哪些国家？
Which Industries Are Relocating Abroad and to Which Countries?
近四分之一的商品分项出口份额回落超1个百分点。根据国际贸易中心（ITC）统计，2015-2023年，在全部1265个商品分项中（HS4位数口径），中国有305类商品分项出口份额下降超1个百分点。根据产业特点分类，出口份额下滑的商品主要集中在资源密集型和劳动密集型产业。
Nearly a quarter of product categories saw their export share decline by more than one percentage point. According to statistics from the International Trade Center (ITC), from 2015 to 2023, among a total of 1,265 product categories (HS 4-digit level), China's export share for 305 categories dropped by more than one percentage point. Categorized by industry characteristics, the declining export share was primarily concentrated in resource-intensive and labor-intensive industries.
一是资源密集型产业。比较典型的是食品饮料和矿产材料，出口份额下滑超1个百分点的商品分项数量分别为49和19类，占其全产业链商品数量的24.1%和28.4%。
First are resource-intensive industries. Notably, the food and beverage, as well as mineral materials sectors. The number of sub-categories in these sectors with an export share decline of over one percentage point stands at 49 and 19, accounting for 24.1% and 28.4% of their total supply chain products, respectively.
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- From 2015 to 2023, China’s export share in 305 out of 1,265 product categories declined, especially in resource-intensive and labor-intensive industries.
- Resource-intensive industries like mineral materials moved to countries such as Australia, while labor-intensive manufacturing shifted to emerging economies like Vietnam, Bangladesh, and India.
- High-end manufacturing, particularly consumer electronics, saw production stages relocate to Vietnam, India, and Malaysia, driven by low production costs and trade policies.
The original text examines the recent trends of industries relocating from China to other countries, highlighting the shift in export shares in various sectors and the implications for Chinese enterprises. The text outlines the industries most affected, the destinations benefitting from these relocations, the motivations behind Chinese companies' overseas expansions, and the policy and economic dynamics driving these changes. Additionally, it discusses the advantages and challenges of these industrial relocations and offers recommendations for mitigating risks and leveraging new opportunities.
**Industries Relocating Abroad and Their New Destinations**
From 2015 to 2023, China's share in the export of 305 product categories dropped by more than one percentage point, particularly in resource-intensive and labor-intensive industries. For example, China's share in mineral material exports fell by 3.3 percentage points, while Australia's export share rose by 18.45 percentage points, making Australia the largest exporter of mineral materials by 2022 [para. 1][para. 3]. Similarly, labor-intensive industries such as apparel and footwear saw significant declines in China's global export share, while countries like Vietnam, Bangladesh, and India witnessed notable increases in these areas [para. 3][para. 4].
The processing and assembly segments of mid-to-low-end manufacturing have primarily shifted to emerging economies, with Vietnam leading the growth in export shares for apparel, footwear, hats, and woven products [para. 8]. High-end manufacturing sectors like electronic information have also seen shifts to emerging economies including Vietnam, India, and Malaysia, where export shares for products like mobile phones and computers have grown rapidly [para. 10].
**Two Waves of Chinese Outbound Expansion**
The first wave of Chinese outbound expansion happened around 2010, driven by labor-intensive companies seeking lower-cost production bases in countries like Vietnam and Indonesia [para. 37]. The second wave began around 2021, buoyed by companies in more advanced industries like automotive and mechanical equipment. This wave has seen an increased number of overseas enterprises and a notable rise in outbound direct investments [para. 37][para. 39].
**Characteristics and Drivers of the New Wave of Overseas Expansion**
This new wave of expansion is characterized by a focus on advanced industries like automotive and mechanical equipment, driven by both external pressures from Western economies and intense domestic competition. In addition, new markets in developed economies such as the U.S., Germany, and Mexico are becoming popular destinations due to their robust industrial bases and proximity to consumer markets [para. 43][para. 45][para. 47]. These relocations often employ the "mother factory" model, keeping high-tech production in China while offshoring less technologically advanced assembly tasks [para. 54].
**Policy and Economic Drivers Facilitating Expansion**
China's national policies provide robust support for overseas expansion by fostering regional trade cooperation and simplifying investment procedures. For instance, the Regional Comprehensive Economic Partnership (RCEP) facilitates broader market access and stability [para. 63]. China’s strong manufacturing capabilities also play a crucial role in supporting firms' competitiveness abroad [para. 64].
**Challenges and Risks in Overseas Expansion**
Despite the benefits, companies face heightened trade protectionism and complex operational environments. Changes in global trade dynamics such as Sino-American trade frictions have led to additional tariffs and increased uncertainty [para. 82]. The risk of industrial "hollowing out" also looms, as rapid relocations may lead to a loss of key industry components and economic fluctuations [para. 103].
**Economic and Employment Impacts**
In the short term, the overall export performance has been impacted but shifted towards higher value-added products. For instance, while China's apparel exports have dropped, the share of intermediate textile products has increased. In the long term, there are concerns about macroeconomic instability and employment losses in labor-intensive sectors due to industrial relocations [para. 93][para. 114].
**Recommendations**
To mitigate these risks, the text advises advancing international trade cooperation, supporting outbound enterprises with favorable fiscal policies, creating a world-class business environment, and addressing bottlenecks in the industrial chain to foster innovation and regional development [para. 132][para. 140][para. 146][para. 152]. This strategy is aimed at maintaining China's competitiveness while managing the transition to higher value-added industries.
- 2010：
- The State Council issued the 'Guiding Opinions on Undertaking Industrial Transfer in Central and Western Regions'
- 2010 to 2016：
- Non-financial outbound direct investment soared 3.3 times, and the number of enterprises increased by 4,570
- Around 2010：
- The first wave of Chinese enterprise outbound expansion, with labor-intensive companies relocating abroad
- 2010 to 2023：
- Total number of A-share companies grew 2.8 times, while overseas revenue increased sevenfold
- 2013 to 2023：
- Vietnam's export shares of mobile phones, audio headphones, computers, and printers increased significantly
- 2015 to 2023：
- China's export share for 305 product categories dropped by more than one percentage point
- 2015 to 2023：
- China’s market share in exports for 110 product subcategories in low- and mid-end manufacturing industries fell by more than one percentage point
- 2015 to 2023：
- The processing and assembly segments of mid-to-low-end manufacturing industries relocated to emerging economies, with Vietnam leading the way in export share growth of apparel, footwear, hats, and woven products
- 2017：
- The National Development and Reform Commission (NDRC) issued the 'Measures for the Administration of Overseas Investment by Enterprises' (Order No. 11)
- 2017 to 2023：
- The proportion of processing trade in central, western, and northeastern regions accounted for nearly 30% of national processing trade
- Around 2021：
- The second wave of Chinese enterprise outbound expansion began
- 2020：
- Norway overtook China in fish exports, ranking first in global export share
- 2022：
- Foreign investments in manufacturing increased by $27.15 billion, increasing by $8 billion compared to 2018
- As of 2022：
- Nearly 80% of China's foreign direct investment stock was concentrated in the service sector
- As of 2022：
- The Regional Comprehensive Economic Partnership (RCEP) came into full effect
- By 2022：
- Australia surpassed China to become the world’s largest exporter of mineral materials
- By 2023：
- Number of outbound enterprises surged again, with the count of non-financial overseas entities reaching 7,913
- 2023：
- China ranked 10th globally on the National Innovation Index, rising three spots from the previous period
- 2023：
- Seven of the top ten global container ports by throughput were in China
- 2023：
- The average years of education among the working-age population increased to 11.05 years
- By the end of 2023：
- China's working-age population (aged 16-59) decreased to 61.3%, while the proportion of the population aged 60 and above increased to 21.1%
- By the end of 2023：
- Only Norway, New Zealand, and Australia continued to provide GSP treatment to China
- May 14, 2023：
- The United States announced an increase in import tariffs on Chinese electric vehicles, lithium batteries, and photovoltaic panels
- 2024：
- The 'Industrial Structure Adjustment Catalogue' was revised for the fourth time
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