2022 is a year full of changes in the world economy. The COVID-19 has experienced ups and downs, geopolitical conflicts have escalated, inflationary pressures have continued to rise, and many countries have initiated radical interest rate hikes. Under the impact of multiple crises, the global industrial chain supply chain has undergone some new changes. On the one hand, Europe, as one of the three major supply chain centers in the world, was forced to embark on the road of "deindustrialization" under the impact of the energy crisis. Many European leading enterprises in trouble began to move to countries with relatively stable energy supply and low costs. On the other hand, countries' political and economic considerations on industrial layout have shifted from the traditional pursuit of "efficiency first" to security and risk prevention. The global industrial chain supply chain is accelerating its adjustment towards regionalization, localization, diversification, digitalization, etc.
The struggle for dominance is becoming increasingly fierce
As the energy crisis intensifies, more and more energy intensive enterprises in European countries are closing factories, downsizing, or transferring production capacity, and Europe is facing a new round of "deindustrialization" challenges. However, the United States on the other side of the Atlantic had the idea of an ally.
In August this year, US President Biden signed the Inflation Reduction Act, introducing a large number of incentives, including high subsidies, to promote the application of electric vehicles and other green technologies in the US. Analysts believe that this plan will aggravate the contraction of European industrial production and force European enterprises to transfer their production lines to the United States.
The same is true. OCI, a Dutch fertilizer company, announced in September 2022 that it would expand its ammonia plant in Texas, the United States; Volkswagen AG of Germany and Danish jeweler Pandora also announced that they will expand their share in the US market. The survey results of the German Chamber of Commerce and Industry show that 39% of its member enterprises plan to increase investment in the United States in the coming months. In the German automotive supply industry, one out of every five enterprises plans to set up a factory abroad.
In the medium and long term, if "deindustrialization" continues, it will not only hit the overall innovation ability of Europe, but also affect the voice of Europe in the formulation of international market rules and industrial standards, thus weakening the international competitiveness of its economy.
In response, European countries angrily accused the United States of being involved in protectionism and attempting to make American enterprises gain competitive advantage at the cost of damaging European industry. French President Makron directly criticized the bill for being "super offensive" to European enterprises. France and Europe "faced the destruction of many jobs" and solved the problems of the United States in a way that harmed European interests.
The disputes between the United States and Europe in the supply chain will aggravate the risk of trade war. British media commented that the "economic nationalism" of the United States may cause a whirlwind of trade protectionism on both sides of the Atlantic, which will aggravate the tension between the United States and Europe. French media pointed out that the United States is a "necessary partner" for Europe, but it should also be regarded as a "systematic competitor".
For a long time, the United States has been committed to restructuring its own supply chain system. As early as 2018, the United States began to issue a number of administrative decrees and policy texts, comprehensively evaluating its industrial chain supply chain security, dependence on foreign countries, and specific coping strategies in key areas such as manufacturing and defense industries, in response to fierce international competition. Especially in the face of the growing competitiveness of China's manufacturing industry, the United States, in order to maintain its hegemony, overtly curbed China in the fields of economy and trade, high-tech, and manufacturing industry chain, and intended to obstruct China's development by promoting the return of American enterprises in China, exerting ideological pressure and other means.
With the return of the global economy to the real economy and the further development of the "reindustrialization" strategy of developed countries, the competition for the dominant power of the industrial chain supply chain in the world will become more intense in the future.
The layout of globalization has changed
In the past few decades, the global layout of the industrial chain has taken efficiency improvement and cost reduction as the basic logic to find the optimal production plan worldwide. Due to its global distribution and efficient operation, all countries actively participating in the global industrial layout have entered the fast lane of economic development.
However, the international situation and the impact of the epidemic situation have brought major challenges to the supply chain of the industrial chain. Industrial security risks are increasingly becoming an important issue. All countries have begun to seek to establish an independent, safe and controllable industrial system. As a result, the pattern of the global production network has undergone profound changes.
Restructuring international economic and trade rules promotes regional layout. Since the international financial crisis, economic globalization has entered a period of adjustment characterized by slowing down, pattern differentiation and rule reconstruction. With the continuous signing and implementation of large regional free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Trans Pacific Partnership (CPTPP), and the US Mexico Canada Agreement (USMCA), economic and trade cooperation in different regions is strengthening, and their respective industrial chain supply chain networks are becoming closer.
The localization trend of industrial chain supply chain is highlighted. In recent years, developed economies such as the United States, the European Union and Japan have tried to revive their manufacturing industries and encouraged their manufacturing enterprises to return. In particular, the COVID-19 has highlighted the importance of supply chain security. In consideration of emergency safety, basic security, economic development, social stability and other factors, developed countries have adopted legal provisions, economic subsidies and political means to promote domestic enterprises to increase investment in their own countries, making the global industrial chain supply chain show a trend of localization or localization.
The strategic adjustment of transnational corporations promotes diversified development. In the short term, the global layout of transnational corporations will not change in a large scale, but may shrink. In the long run, multinational companies will actively adjust the supply chain layout and implement diversification strategies to achieve a balance between safety and efficiency.
A new round of scientific and technological revolution accelerates the digital transformation. In the process of accelerating the evolution of scientific and technological revolution and industrial change, the gradual penetration of big data, Internet of Things, artificial intelligence, 3D printing and other aspects of the industrial chain supply chain will fundamentally change the original research and development mode, manufacturing mode, trade mode and industrial organization form.
Win win cooperation is the general trend
Although the supply chain of the global industrial chain is under impact and the international economic and political pattern has undergone profound adjustment, the objective situation of highly integrated interests and interdependence among countries has not changed. In the long run, economic globalization is still a historical trend, and the division of work and cooperation among countries for mutual benefit and win-win results is still a long-term trend.
Since this year, some American and Western politicians have encouraged Western enterprises to "decouple" from China, attempting to exclude China from the core industrial chain, violating economic laws and separating from objective reality, which will only bring disaster to American and Western domestic enterprises and economies, and further block economic and trade partners and the world economy.
The report released by the American Chamber of Commerce shows that "decoupling" from China seriously threatens the interests of the United States in trade, investment, services and industry. If tariffs are imposed on all Chinese goods exported to the United States, the American economy will lose $190 billion annually by 2025; US investors may lose US $25 billion of capital gains every year due to "decoupling", and the loss of gross domestic product (GDP) can reach up to US $500 billion.
The Iver Institute of Economics, a German think tank, estimates that if EU enterprises "decouple" from China under the pressure of the United States, the trade volume between Germany and China will drop sharply. In the worst case, Germany's GDP will decrease by 0.81%, which is six times the decline of Germany's GDP when Britain left the EU. LaRouche, founder and chairman of Schiller Institute, a German think tank, said that "decoupling" from China was against Germany's interests and was tantamount to economic suicide for Germany.
Even as Western politicians clamour for "decoupling", China Western economic and trade relations are still deepening. According to the data of the General Administration of Customs, in the first 11 months of this year, China US trade volume was 4.62 trillion yuan, an increase of 4.8%; Over the same period, China EU trade reached 5.17 trillion yuan, up 7.0%. China remains the largest trading partner of the EU, and the EU continues to become China's second largest trading partner.
China EU cooperation has broad prospects in new energy, artificial intelligence, digitalization, high-end manufacturing and other fields. In June this year, Audi FAW's new energy vehicle project officially started in Changchun; In September, Ningde Times and BMW Group announced that Ningde Times would supply cylindrical batteries for the pure electric models of BMW Group's "new generation" model architecture from 2025. Lidia Pereira, a member of the European Parliament, believes that both China and the EU have industry-leading new energy enterprises, and they have great complementarities in the industry. The broad new energy market provides huge development space for Chinese and European enterprises.
Facts have proved that there is no way out for "decoupling and chain breaking", and win-win cooperation is the aspiration of the people and the trend of the times. As Vernon Smith, the Nobel laureate in economics, said: "All countries that strive to expand trade are, and will always be, winners."
source:https://mp.weixin.qq.com/s/nj1r_dXdFLggGsVp9GH8ug