Foreign capital withdrawing from China? MIIT: It is an objective law, no need to make a fuss

On July 23, the State Council Information Office held a press conference on the development of the industrial communications industry in the first half of the year. In response to the withdrawal of some foreign-funded enterprises from the Chinese market due to the Sino-US trade war, Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology, said that the flow of capital to low-cost regions is an objective law and there is no need to make a fuss.

Xin Guobin said that affected by factors such as market costs, some foreign-funded enterprises have withdrawn from the Chinese market, and some labor-intensive industries in China are also seeking new investment and development opportunities. This is normal business behavior of enterprises and conforms to the objective laws of industrial development. At present, the scale of manufacturing relocation is not large, and it is basically dominated by low- and medium-end enterprises. The impact on China's economic growth and other aspects is generally controllable.

Taking Guangdong as an example, Xin Guobin pointed out that in 2018, a total of 588 foreign-invested companies in Guangdong adjusted their industrial layout to Thailand, Malaysia, Vietnam and other places, accounting for only 1.44% of the total number in Guangdong Province. During the same period, there was a net increase of 1,918 foreign-invested enterprises, and high-end manufacturing companies with a value of tens of billions of dollars, such as Foxconn, have successively settled in Guangdong.

Xin Guobin also stressed that the global economic growth is slowing down and trade bullying is rampant. In the context of economic globalization, no country can stay out of it and there is no winner in a trade war. In addition to facing external environmental factors, China also has to deal with the pain of domestic industrial transformation and upgrading, as well as existing structural and institutional contradictions. Uncertain and unstable factors have increased significantly.