General

Does Vietnam and other Southeast Asian countries have the ability to replace China as the new "world factory"? This is one of the focuses of overseas public opinion in the first half of this year. "Hard to replace" has become the consensus of the industry, and Huacheng Import and Export Data Observation reported.

The cross-border industrial chain, as a production relationship formed by economic activities in the upstream and downstream industries and among regional countries under the international division of labor system, has been evolving and changing since the first industrial revolution. The spread of the COVID-19 and the increasingly complex international situation have accelerated the overall process of a new round of cross-border industrial chain transfer.

According to Huacheng Import and Export Data Observation, the Research Report on China's Cross border Industrial Chain Change and New Comparative Advantage in the Digital Trade Era released by the Cross border E-commerce Research Center of Alibaba Research Institute at the 2022 China International Trade in Services Fair shows that multi direction migration, non economic factor disturbance and differentiated transfer have become the characteristics of a new round of global cross-border industrial chain change. In this context, although Vietnam's industrial chain and China's cross-border industrial chain coexist in competition and complementarity, it is still difficult to replace China's important position in the global value chain. In addition, China's cross-border industrial chain is ushering in an important opportunity period for the establishment of new comparative advantages in the digital trade era.

ASEAN countries: structural adjustment of industrial development

According to the characteristics of the new round of cross-border industrial chain change, first of all, the direction of cross-border industrial chain transfer has changed from unidirectional to multi-directional. On the one hand, labor-intensive industries such as clothing, shoes and hats have turned to Southeast Asian countries; On the other hand, there has been "near shore migration" and some high-end manufacturing industries have returned to developed countries. Secondly, there is a passive change component disturbed by non economic factors. The value supply chain may weaken or even deviate from the efficiency principle of traditional industrial transfer. "Friendly offshore outsourcing" and "offshore outsourcing" are also emerging. Finally, the industrial chain has undergone a differentiated transformation from upstream to downstream. The traditional whole link transformation paradigm has been changed, and the degree of industry segmentation and production link refinement has been continuously improved.

According to Huacheng Import and Export Data Observation, since its establishment in 1999, Alibaba International Station has covered 41 industries and carried out cross-border business for 26 million merchants in more than 200 countries and regions. By analyzing the export of upstream and downstream products in key industries such as clothing and consumer electronics at Alibaba International Station from 2019 to 2022, the report found that the export of upstream and downstream products of clothing and consumer electronics from Alibaba International Station to Southeast Asian countries had undergone significant differentiation in several periods. For example, from the second quarter of 2020 to the first quarter of 2021, the export of intermediate clothing products to Southeast Asia will be faster than that of finished products, and consumer electronics products will be similar in 2019.

Ouyang Cheng, vice president of Ali Research Institute and director of Ali Cross border E-commerce Research Center, believes that the growth differentiation of Chinese enterprises' exports of clothing and consumer electronics upstream and downstream products from Southeast Asian countries on the international station platform reflects the structural adjustment of local countries' industrial development to some extent, that is, intermediate products and raw materials are increasingly becoming important products imported from China. In combination with the general trade data of China's customs, China's textile exports to 10 ASEAN countries in 2021 will reach 49.12 billion US dollars, a year-on-year increase of 24.9%, far exceeding the 4% year-on-year growth rate to the United States. Among them, clothing intermediates and raw materials represented by textile fabrics and yarns account for more than 80%.

The report also shows that from 2017 to 2021, the average growth rate of exports from international stations to major countries has remained high. Among them, the average growth rate of exports to the United States and South Korea exceeded the overall growth rate of the platform. Developed countries and regions such as Europe and the United States are still the main markets for China's cross-border e-commerce exports. However, by comparing the export growth rate of international stations to countries in recent years, we can find that ASEAN countries have become the most eye-catching high growth market for international station exports in recent years. In 2021, the export growth rate of international stations to Malaysia, India and the Philippines has increased by 42%, 32% and 30% respectively. Huacheng's import and export data observation reports.

China: Its position in the global value chain cannot be replaced

The research results released by the Institute of World Economy and Politics of the Chinese Academy of Social Sciences show that 53% of Vietnamese industries have formed general competition relations with Chinese domestic industries, such as transfer of production sites, and 42% have formed complementary relations with Chinese domestic industries, such as cross-border value chain trade. However, from the perspective of China's full range of industries, China still has overwhelming industrial advantages over Vietnam.

"The research results show that China's garment industry currently has the advantage of producing more than 70% of the world's raw materials, the advantage of international leading spinning, weaving, printing and dyeing independent technology and equipment, and the flexible supply and small order quick return production capacity based on the complete link system." Ouyang Cheng said that the superposition of the "one hour spare parts supporting circle" capabilities that can be realized by the consumer electronics industry makes it difficult for Southeast Asian countries such as Vietnam to replace China's important position in the global value chain.

With the help of customs statistics, the cross-border e-commerce exports of international stations are compared with the same type of products exported by general trade, revealing more information. From the first quarter of 2019 to the second quarter of 2022, the average growth rate of clothing raw materials exports in general customs trade (42.2%) is higher than the average growth rate of clothing finished products exports (10.4%), and the average growth difference between the two exports is 31.8%, showing a trend of differentiation.

In the same period, the average growth rate of clothing raw material exports in the international station (45.2%) was close to the growth rate of customs general trade exports, but the growth rate of clothing finished products exports (22.8%) was significantly faster than the growth rate of customs general trade exports, and the growth difference between the two (22.4%) was less than the general trade export level of customs data. The comparison of the consumer electronics industry is more prominent.

It can be seen that for clothing and consumer electronics industries, the degree of industrial chain differentiation through cross-border e-commerce online exports is weaker than that of general trade, which takes offline as the main export form. In addition, the report found that the cross-border e-commerce model represented by international stations can help merchants mitigate the impact of rising costs and prices of raw materials, labor, etc. to a certain extent.

"In practice, the cross-border e-commerce platform represented by Alibaba International Station has a more complete new infrastructure business infrastructure, a full process cross-border digital service system, a cross-border business market insight and judgment tool, and a credit evaluation system for business market entities, which can help Chinese foreign trade enterprises continuously improve their digital capabilities, enhance the certainty of going to sea, and establish a new comparison of cross-border trade in the digital era Advantages. " Ouyang Cheng believes that the transformation of global trade digitalization provides soil and opportunity for the establishment of new comparative advantages of China's cross-border industrial chain. The pioneering practice and capacity reserve of China's cross-border e-commerce platform will provide important support for more Chinese industries to participate in international competition and cooperation, and accelerate the globalization layout, while contributing to China's building a new development pattern and achieving high-quality development. Huacheng Import and Export Data Observation Report.