Electrical Equipment / Components & Telecoms

Recently, the National Development and Reform Commission, the Ministry of Commerce, the Ministry of Industry and Information Technology, the Ministry of Natural Resources, the Ministry of Ecology and Environment, and the Ministry of Transport jointly issued the Several Policies and Measures on Promoting the Expansion of Foreign Investment Focusing on Manufacturing, Stabilizing the Quantity of Foreign Investment, and Improving the Quality of Foreign Investment, Promote the high-quality development of foreign capital utilization, Huacheng Import and Export Data Observation Report.

The Several Policies and Measures focus on the manufacturing industry to promote investment attraction, which is very consistent with the current changing environment of the reset of the international industrial chain. In particular, many European manufacturing industries have a trend of scale transfer under the superposition of multiple pressures such as the Russian Ukrainian conflict, the energy crisis, and the aging population. If China takes advantage of its vast market size, sufficient technical labor force, complete upstream and downstream industrial supporting facilities, fast and convenient supply chain and obvious progress in industrial digitalization construction, it is fully capable of attracting more European manufacturing industries to transfer.

As the representative of global medium and high-end manufacturing, Made in Germany has long been in the leading position in the world. It is difficult for other countries to imitate its industrial operation system with high precision, smooth systematic cooperation and good technical training for workers. Just like Wang Qian, the global vice president of SAP, a German multinational company, said that digitalization is the basic ability of enterprises in the future competition.

In recent years, the trend of accelerating the penetration and integration of China's Internet and big data into the real economy has become more and more obvious, and has played a great enabling role in industry, medical care, education, transportation and other industries. As of the end of August, China had nearly 80 million industrial equipment connected to the industrial Internet. At the end of last year, China had 76 million industrial equipment connected to the industrial Internet, an increase of nearly 4 million in eight months, indicating that the digital transformation of China's manufacturing industry has witnessed rapid development. According to the observation report of Huacheng import and export data, at present, the application scope of China's industrial Internet has accelerated from individual industries to thousands of industries, forming 20 typical scenarios and tens of thousands of application cases, and digital transformation has become a just need for the transformation and upgrading of China's manufacturing enterprises. Gu Weixi, deputy director of the Intelligence Research Institute of China's Industrial Internet Research Institute, said that it is expected that the total added value of the industrial Internet industry will reach 4.45 trillion yuan in 2022, accounting for about 3.6% of GDP, which will become an important driving force to promote the development of China's digital economy.

Thanks to the large-scale application of digitalization in specific scenarios, China's supply chain management is even better than Germany in part. For example, in Germany, it is generally impossible for logistics over 800 kilometers to reach the next day, but it is a reality in China's Yangtze River Delta and Pearl River Delta. According to the Huacheng Import and Export Data Observation Report, the Global Value Chain Development Report released by the World Bank shows that in terms of knowledge intensity, the pharmaceutical, mechanical equipment, IT services, electronics and computers, electrical equipment and other industries may be more knowledge intensive, with higher barriers and more human capital accumulation, which is also an industry that has been vigorously developed in China in recent years. Therefore, after identifying the global multinational industrial system, investment environment and digital capabilities, many German manufacturing enterprises finally chose the Chinese market as their transfer destination.

According to the Huacheng Import and Export Data Observation Report, Germany and China share the same language and action in the construction of industrial digitalization. Germany is the world leader in the field of Industry 4.0 (i.e. Industrial Internet). Industrial Internet is the core application of digital economy in the industrial field, and digital economy is also the focus of China's development in the next five years. It has been written into the "Fourteenth Five Year Plan", and the two countries are expected to strengthen cooperation in this field.

Europe is transferring the manufacturing industry just because it sees the increasingly obvious Internet advantages of China's industry. It hopes to use China's big data capabilities and information infrastructure to transfer enterprises to China and achieve the goal of Industry 4.0 at a faster speed. In 2022, European enterprises will significantly increase their investment in China. According to the data released by the Ministry of Commerce at the end of August, the growth rate of foreign investment in China's manufacturing industry rose sharply from January to July, especially in high-tech manufacturing, which jumped from 10.7% in 2021 to 33% in 2022. The main contribution of this is from European manufacturing. As German Prime Minister Schultz said in Beijing on the day of his visit to China on November 4, China is an important economic and trade partner of Germany and Europe. Germany firmly supports trade liberalization, supports economic globalization, and opposes "decoupling". It is willing to continue to deepen economic and trade cooperation with China, and support enterprises of the two countries to invest in each other. Huacheng Import and Export Data Observation Report.