Opinion     

Discrediting 'foreign capital withdrawal'

China.org.cn, March 19, 2015

• China's industrial landscape is witnessing dramatic changes

  Though foreign capital is not fleeing China, the country's industrial landscape is indeed witnessing dramatic changes.

  Foreign investment in China's service sector has overtaken investment in the manufacturing sector. About 56 percent of FDI was in the service sector last year, while FDI in the manufacturing industry was declining and its share in the total FDI was sliding as well.

  As the costs of labor and production keep climbing up, some foreign-owned, labor-intensive manufacturing companies are relocating their production bases to lower-income countries outside China. But foreign investment in China's high-tech and high-end companies is still on the rise.

  Though some foreign firms transferred their factories outside China, some also brought factories into the country. For instance, a number of auto makers set up factories in China; Intel and Samsung spent billions of dollars in Chengdu and Xi'an setting up high-end quality testing and chip-making factories; pharmaceutical giant Johnson & Johnson established an Asia Pacific research center in Shanghai.

  More foreign manufacturing companies are expected to withdraw from China. Meanwhile, some Chinese clothing manufacturing firms will also transfer to overseas countries. As China adjusts its industrial structure, the withdrawal of some firms is nothing to be alarmed or get hyped up about.

  The writer is CEO of ribenchan.com and a specialist studying Japanese enterprises.

  The article was translated by Zhang Lulu. Its original version was published in Chinese.

  Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

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