BEIJING, May 8, 2024 /PRNewswire/ -- A report from
People's Daily: Since the Industrial Revolution in the 18th
century, the continuous development of productivity and economic
globalization has led to the accelerated flow of production factors
worldwide.
As a result, the distribution of manufacturing capacity in
different countries and regions has been constantly changing,
forming a dynamic global pattern of production capacity.
This is an objective phenomenon determined by economic laws
under market economy, which requires a science-based and rational
understanding.
The global production landscape is a result of economic
globalization. Under open market economy, an international division
of labor has been formed due to the comparative advantages of
countries. Through international trade, they share the benefits
brought about by this division of labor and specialization. This is
the inherent logic behind economic globalization and free
trade.
For example, according to a report by the Semiconductor Industry
Association of the United States,
semiconductor companies headquartered in the United States reported total sales of
$275 billion in 2022, accounting for
48 percent of the global market. In the $180.5 billion semiconductor market in
China, American companies held a
share of 53.4 percent.
Another example is Japanese carmaker Toyota. The company sold
nearly 10.31 million vehicles worldwide in the 2023 fiscal year,
and nearly 8.78 million were sold outside Japan.
This situation, where production capacity exceeds domestic
market demand in a country, is not "overcapacity" as claimed.
Instead, it is a natural phenomenon of international division of
labor and specialization based on comparative advantages during the
process of economic globalization. It is one of the manifestations
of market mechanisms.
The global production landscape is a result of the law of value.
In market competition, capacity with higher production efficiency
can obtain higher profits by offering lower prices, thereby
eliminating capacity with lower efficiency. In this process, the
coexistence of efficient and inefficient capacity is not indicative
of overcapacity, but rather a necessary stage for the law of value
to take effect.
For instance, with technological advancements and the growing
popularity of green development concepts, new energy vehicles are
gradually replacing traditional fuel-powered cars.
According to the International Energy Agency's "Global Electric
Vehicle (EV) Outlook 2024" report, global EV sales reached nearly
14 million units in 2023, accounting for 18 percent of the total.
It is projected that by 2030, 1/3 of cars running on Chinese roads
will be electric, while the proportion in the United States and the European Union is
expected to approach 1/5.
Given the global trend of new energy vehicle development, the
supply-demand gap in the global new energy vehicle industry is
widening, indicating that efficient capacity is not in surplus but
rather insufficient.
Therefore, it is the market that should determine, in the global
context, which industries have overcapacity and identify surplus
capacity. Excluding competition under the pretext of "overcapacity"
goes against the fundamental principles and rules of a market
economy and fails to meet the requirements of the law of value. It
will inevitably lead to monopolies, inefficiency, and stagnation,
which are detrimental to the long-term development of any
country.
The global production landscape is a result of economic laws and
technological innovation. Regions with active innovation and rapid
technological progress tend to have a greater variety of production
capacities and faster capacity upgrades. Competition, mergers, and
acquisitions among capacities with different technological levels
and routes are inevitable in this process.
The rise of China's new energy
vehicle industry can be attributed to the overall innovation in
energy drive systems such as batteries and motors, which is driven
by green and low-carbon development.
This innovation has led to the concentration of high-quality
global new energy capacities in China. Last year, over half of the Tesla
vehicles delivered worldwide were produced by the company's
Shanghai Gigafactory. International companies such as Bosch, Magna,
and BASF have also expanded their research and development
investments in the Chinese market.
The overall innovation and rise of China's new energy vehicle industry not only
meet the demands of the Chinese market, but also bridge the global
supply-demand gap in the industry and contribute to green
development.
Hildegard Muller, president of
the German Association of the Automotive Industry, believes that
the development of the Chinese EV industry and the vitality of the
Chinese market are beneficial to the global automotive
industry.
As the world's largest manufacturing country and the largest
exporter of goods, China is
witnessing the rise of numerous emerging industries and
enterprises, as well as a constant push for innovation and
competition driven by technological advancements. This showcases
the country's economic vitality and creativity, rather than
excessive investment and overcapacity.
The global realignment of production capacity driven by market
forces will continue to progress despite setbacks. In recent years,
some countries have pursued "decoupling" and implemented measures
such as "small yard, high fence," "friend-shoring," and "capacity
backup" for political purposes. These actions have resulted in
excessive duplication of production and global overcapacity. Such
anti-globalization actions that exclude competition and violate the
principles of market economy, have raised global production costs,
reduced economic efficiency, and harmed the welfare of global
consumers and the interests of related industries.
Faced with the continued growth and development of China's manufacturing industry, the correct
and positive approach should be to engage in open and fair
competition with Chinese companies, while also seeking
opportunities for cooperation and mutual progress, rather than
hiding behind the high walls of trade protectionism and
nationalism, and firing off cold accusations of "overcapacity."
Openness brings progress, while seclusion leads to backwardness.
This is an important lesson that China has learned from its history over the
past two centuries, and it will continue to be tested in the new
century.
View original
content:https://www.prnewswire.co.uk/news-releases/global-production-landscape-a-result-of-market-competition-international-division-of-labor-302140050.html