It's Normal for Chinese Firms to Move Abroad; Impact Is Under Control, NDRC Says
Liao Shumin
DATE:  Jul 17 2019
/ SOURCE:  yicai
It's Normal for Chinese Firms to Move Abroad; Impact Is Under Control, NDRC Says It's Normal for Chinese Firms to Move Abroad; Impact Is Under Control, NDRC Says

(Yicai Global) July 16 -- As China's manufacturers have entered a transformative stage and it is normal for them to build overseas plants, according to the country's top economic planning agency.

The National Development and Reform Commission has conducted an in-depth investigation and analysis of the phenomenon, spokesman Meng Wei said at a press conference in response to recent media reports that companies in China's industrial and supply chains are moving abroad.

The NDRC found that some businesses were taking into account changes in factory prices and moving to places where labor and environmental protection costs were lower, Meng said. Based on their own development strategies, others are actively exploring the international market and a small number of firms are moving to avoid the impact of the ongoing China-US trade friction, she said.

Still, it is not an easy for companies to shift overseas because they need to consider many factors, including operating costs, workforce, supply chain support, transport and even the manufacturing culture of the place where they move, Meng added.

Many firms that moved aboard have returned over the past two years because they failed to adapt to the overseas environment. For instance, a slew of shoemakers in Dongguan, Guangdong province, have closed their plants in Southeast Asia and returned to China, the NDRC learned from a recent survey.

China's manufacturing migration is not on a large scale, and firms moving out are mostly middle- and lower-end enterprises, so the impact on the country's economic growth, industrial upgrading and employment is under control, Meng said.

The NDRC will continue to promote high-quality development of the manufacturing sector, focusing on the creation of a good industrial system, the domestic market and other advantages, Meng added.

It will issue policies targeting further high-level opening-up, releasing the potential of domestic demand, and strengthen weak links in the industry chain to upgrade it. The NDRC will also focus on creating a world-class business environment to further enhance the attractiveness of manufacturing development in the country, she said.

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Keywords:   National Development and Reform Commission,Manufacturing Industry