HongPeng Mechanical Technology Co., Ltd.      Case No.:浙ICP备17035313号

 HongPeng Mechanical Technology 

ADD:Yigao Plaza, Yuecheng District, Shaoxing, Zhejiang, China   

The "Double - Chain Driving" Strategy of China 's Manufacturing Industry

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The "Double - Chain Driving" Strategy of China 's Manufacturing Industry

Market Survey
2019/12/11 10:16
In the context of reverse globalization, the domestic manufacturing industry is facing great difficulties and challenges. Only by seizing the historic opportunity to implement the "double-chain drive" development strategy, China's manufacturing industry can achieve transformation and upgrading. The so-called "double-chain drive" development strategy, refers to the enterprise innovation as the driving force to create a strong domestic demand based on the domestic value chain system (NVC) and my main global value chain system (GVC).
Difficulties and Challenges Facing China 's Manufacturing Industry
The cost is rising. With the deepening of the industrialization process, China's manufacturing industry's low-cost competitive advantage gradually lost, mainly in the following areas: First, high labor costs. During the early period of reform and opening up, a large number of rural surplus rural population from rural agriculture to urban industry, the formation of China's manufacturing industry low labor cost advantage, attracting a large number of foreign investment, accelerating the process of China's industrialization, China and gradually become the world's manufacturing center. However, in recent years, with the disappearance of the demographic dividend, the number of rural surplus labor force began to decline, the supply of labor from almost unlimited supply to supply shortage. In particular, with the transformation and upgrading of domestic manufacturing, the shortage of skilled workers is required, resulting in the rapid rise in the wages of employees. Second, the manufacturing enterprises necessary water, electricity, natural gas, crude oil and other basic resources, high cost. Third, the manufacturing enterprises are burdened by the high comprehensive taxes and fees. Fourth, the manufacturing enterprises are facing high logistics costs. It is because of the gradual loss of cost competitive advantage, many domestic labor-intensive enterprises moved to Southeast Asia and other low-cost countries and even Europe and the United States developed countries, the domestic manufacturing industry is facing the danger of hollowing.
Fund chain fragile. Domestic capital flows show a clear feature of "desecutive", a lot of money into the real estate and financial industry, while the manufacturing industry as the core of the real economy is a shortage of funds, most small and medium enterprises are facing financing difficulties, high financing costs The dilemma. Private enterprises generally face lending constraints, most can only rely on private financing to solve the demand for funds. This capital mismatch phenomenon is the fundamental reason for the manufacturing industry as the core of the real economy of the capital can not get normal profits, funds do not want to enter the real economy, and stay in the easy profit of the virtual economy sector. The development of manufacturing industry requires a lot of industrial capital, the need for financial capital support. But in recent years, the financial industry has fragmented the real economy and the financial sector, the financial industry's capital media function has been weakened, resulting in a general shortage of manufacturing funds, the accumulation of systemic risk worsened: one side of the financial capital surplus, the prevalence of virtual economy, the Class assets hype endless; the other side of the industrial capital shortage, the real economy is sluggish, manufacturing enterprises capital chain tight.
Overcapacity. The development of the domestic manufacturing industry has a significant "locust effect", that is, once there is a certain excess profits of new products or services, social capital will be short-term rapid entry and the formation of saturated production capacity, resulting in excess capacity. From the perspective of market competition, has a huge potential capacity is an effective means of competition for enterprises, but also the inevitable result of market competition. If under the conditions of complete competition, the market competition mechanism will promote the balance of supply and demand of goods, theoretically there will be no excess capacity. But the reality of the product or service market are not fully competitive market, there are various industry barriers, some loss-making enterprises can not withdraw from the market to reduce production capacity, resulting in some manufacturing capacity serious excess, zombie enterprises are not uncommon. The existence of zombie enterprises is not only not conducive to the optimal allocation of resources, but also increase the financial burden of the government, reducing the total social welfare level.
Low value of value chain. Due to the low starting point in China's manufacturing industry, and the lack of core technology in the process of industrialization, in the international value chain is often locked in the low-end links. As a manufacturing power, mass production and exports make China's manufacturing industry at both ends of the supply side of raw materials and end consumer are highly dependent on the international market in the international commodity trading market often "China to buy what Han expensive, "The situation. This reflects the Chinese manufacturing industry is not only the lack of core technology and independent brands, but also the lack of market pricing, often by the international raw materials market and consumer terminal market two-way squeeze, corporate profits become unusually thin. At the same time, the low end of China's manufacturing industry makes it more intense international competition - because the low-end value chain links are often low-tech barriers and easy to be replaced, which makes the Chinese manufacturing industry more and more from the Southeast Asia, Africa and other low labor costs regional or national competitive pressures. China's manufacturing industry in the low-end part of the value chain for Europe and the United States developed countries to provide a large number of inexpensive products, but this low value-added goods exports, resulting in bilateral trade imbalances and dumping of Chinese products illusion, easily lead to China and Trade friction in other countries.