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Manufacturing Surplus as the New Economic Normal | Insights


Chongqing—The 2024 Land-Sea Economic Forum took place on May 18, 2024, in Chongqing, China's Southwest Municipality, and attracted numerous industry leaders.

Lin Xueping, a Visiting Researcher at the China Institute for Quality Research of Shanghai Jiao Tong University and author of Supply Chain Attack and Defense, shared his insights on the globalization of Chinese companies and the transformation of supply chains in an interview with Bridging News.

Lin noted that multinational corporations are key players in globalization. Observing their global supply chain layouts helps gauge globalization trends.

He observed the rise of new factories in Mexico, India, and Vietnam, indicating that globalization is accelerating rather than regressing. This shift and restructuring of supply chains reflect the vitality of globalization and the strategic global market positioning of multinational corporations.

China's manufacturing industry has ranked first globally for 14 consecutive years, accounting for nearly one-third of the world's total. Chinese manufactured goods make up 20% of global exports.

Lin highlighted that China's manufacturing sector has benefited from and contributed to global economic development. He emphasized that talk of reverse globalization is more about changes in factory distribution rather than a true reversal. The global supply chain layout driven by multinational corporations has positioned Chinese manufacturing as a new force in globalization.

He cited Apple as an example. In 2018, India's cell phone imports were valued at $2 billion, while exports soared to $14 billion by 2024, with Apple contributing 70% of this growth. However, core components and equipment are largely supplied by China, demonstrating the indispensability of China's supply chain in India's burgeoning cell phone industry.

Lin concluded that Globalization 2.0 involves product exports and the global expansion of China's supply chain. This expansion accelerates industrialization in developing countries and benefits developed countries. For example, China's leading photovoltaic and power battery technologies have generated strong global demand. Despite political rhetoric against "Made in China," multinationals continue cooperating with China.

He added that under Globalization 2.0, new manufacturing hubs are emerging in Southeast Asia, South Asia, and Eastern Europe, and many regions still rely on China's supply chain support. For example, due to Chinese investment and technical support, Hungary's electric vehicle industry has rapidly become the world's second-largest power battery production base.

Lin emphasized that Chinese manufacturing is reshaping Globalization 2.0, driving global economic growth and injecting new vitality into the global economy.

He explained that for China's future enterprises to excel, risk compliance must be an integral part of their capabilities. Internalizing this global capability is crucial for Chinese enterprises pursuing globalization.


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