On August 2, the website of Hong Kong's "South China Morning Post" published an article entitled "China's next export product is the world's factory itself." The author is Yu Hao, professor of strategy and innovation at the Business School of the International Institute of Management Development in Switzerland. The article is compiled as follows:

Some governments are hoping to revitalize local manufacturing by imposing tariff increases, but China's next move will frustrate their expectations. Tariffs can only restrict imported goods, but cannot stop China companies from building factories and production overseas.

Many economists 'discussions focus on only two directions: whether China can maintain high export growth or whether it can revitalize domestic consumption. This analytical perspective is too narrow. The real core question is: What model can replace export-led growth? One answer is to export the production system itself.

The next stage of China's development momentum may come from three measures-building factories overseas, promoting China brands to deeply explore overseas markets, and integrating China's technology and industrial standards into global supply chains. In other words, China's next export product will be the world's factory itself.

Why? Because commodity exports will eventually encounter political and economic barriers, and the export production system allows China companies to maintain their expansion scale while benefiting from their own overseas assets. In the future, China's overseas revenue will come more from royalties, technology licensing fees and investment dividends, rather than simply exports of manufactured goods.

China's transformation is already on the way. BYD, headquartered in Shenzhen, saw overseas car sales surge by 71% year-on-year in the first half of the year, while domestic sales fell by nearly 40%. American car company Ford's battery factory in Michigan uses battery technology authorized by China's Ningde Times for production, which means Technology licensing benefits will continue to flow back to the Ningde era; Chinese car company Chery joined forces with local companies to take over the original Nissan factory in Barcelona, Spain.

There is a major difference between China's transformation path and Japan's. Beijing hopes to promote the globalization of production while still controlling core technologies in its own hands. On the one hand, China encourages local companies to set up factories overseas, on the other hand, it tightens technology export controls and strengthens foreign investment reviews.

In the next ten years, there are two indicators worthy of attention: China's trade surplus and overseas investment income. The former has created China's status as the world's factory, while the latter will determine whether China can move into a more influential position: a world shareholder. (Compiled by/Guo Jun)

Source: Leading the way to the sea by Gaoshen's car

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