China Loses Some Allure As a Manufacturing Hub
Foreign Investment
Falls as Rapid Growth
Pushes Costs Higher
BEIJING -- Foreign investment in China's manufacturing sector has started to slowly decline after years of strong gains, suggesting the country is losing some of its luster as a base for inexpensive production.
China has for years been one of the world's biggest recipients of foreign direct investment, money that has helped turn the country into the world's factory floor. Yet China's take of direct investment dropped slightly in 2005, excluding a series of one-time deals in the financial sector. After a 12% plunge in June, the figure is down a further 0.5% for the first half of 2006. Given that China's economy is continuing to expand at a rate of about 10% annually, the size of foreign investment as a proportion of the whole economy is shrinking even faster.
Total investment coming into the country remains huge -- roughly $60 billion a year -- a testament to how China has been able to diversify its industrial base and keep attracting new money. But even a flattening in the trend is striking, given the reputation China has developed as an irresistible magnet for foreign companies' money.
Many factors are at work. At this point, much of the manufacturing that can be profitably shifted to China has already moved, while the lowest-end production is starting to migrate away to less-expensive locations. And while multinationals' interest in China is broader than just export-driven manufacturing, the difficulty of buying domestic companies and the limits on foreign participation in service businesses are keeping those channels from becoming big new drivers of investment.
"China should think about how the country is going to position itself for the next 10 years," says Xiang Bing, dean of the Cheung Kong Graduate School of Business. "Multinational corporations won't put all their eggs in one basket. There are incentives for diversification."
Government officials say they aren't worried by a modest drop in investment, but acknowledge that some foreign companies are starting to look elsewhere as wages and land prices have risen. "It is possible that the costs for some foreign investors have increased," says Zheng Jingping, spokesman for the National Bureau of Statistics. "Other countries are also stepping up their efforts to attract foreign investment."
Foreign investment in Southeast Asian nations such as Malaysia and Indonesia is starting to pick up after languishing for years in the wake of the regional financial crisis of 1997-98. Even once-closed Vietnam has become a new hot spot for manufacturing, as it can offer even less-expensive conditions than China.
No one is predicting an exodus from China, as the country's huge domestic market and high-quality infrastructure continue to attract many businesses. But some entrepreneurs, like Wang Lih-hwa of Taiwan, have begun shifting operations abroad in search of more competitive prices. Ms. Wang and her husband, who run a food-ingredients business, opened a factory in the southern province of Guangdong in 1995.
At the time, the move helped them cut production costs by 50% from the level in Taiwan. But steadily rising wages have since eroded that advantage. So in 2004, she and her husband opened a factory in Vietnam, and it now accounts for 60% of the company's output. Ms. Wang expects average costs in their Vietnam operation this year to be at least 35% lower than in China, thanks chiefly to inexpensive labor and rent. "It was time for us to consider a new spot outside China to protect our company and maintain our slender profits," Ms. Wang says.
Taiwanese companies, which were among the first to recognize and exploit China's advantages in low-cost manufacturing, are now putting much of their new investment in other Asian countries. Thanks to big projects from the likes of petrochemical company Formosa Plastics Group and contract shoemaker Yue Yuen Industrial (Holdings) Ltd., the Taiwanese are now the biggest foreign investors in Vietnam.
In a way, China has become a victim of its own success. So much of the Asian electronics industry has already relocated to China that there is little left to move. And for other big investors, there are limits to how much more they can realistically put in.
Total investment from Japan, South Korea and Taiwan -- a group that has collectively been a bigger investor in China than either the U.S. or the European Union -- dropped 6.5% in 2005 and has plunged 31% in the first half of this year. Foreign direct investment into China from the U.S. has fallen every year since 2003, according to Chinese statistics. (Figures for foreign direct investment measure money that goes into building or buying businesses, not purchasing stocks or bonds.)
At this point, many Japanese companies have "more or less completed" their major manufacturing investments in China, says Tomoharu Washio, a Tokyo-based researcher at the Japan External Trade Organization. For instance, Honda Motor Co. in 2004 started investing to double its car-making capacity in China, but plans to complete the program this year. With the Japanese economy reviving, many companies are now focusing on adding to higher-end production capacity in their home market, Mr. Washio says.
Yet, stagnation or a small decline in foreign direct investment isn't necessarily bad news for China. At a time when the biggest worry is that the economy could be growing too fast and authorities are trying to slow down domestic investment, a reduction in foreign inflows is probably welcome. Less foreign investment could also trim the external imbalances that created pressure on China to push up the value of its currency, the yuan.
It wouldn't be hard for the government to attract even more foreign investment -- if its leaders really wanted to. A hint of investors' appetite for China was given by the recent sale of stakes in the major state-owned banks to overseas institutions, a program that drew an additional $12.1 billion in direct investment in 2005. But those landmark deals are unlikely to be repeated, and authorities are keeping limits on foreign investment in other key service sectors and have shown reluctance to approve some major acquisitions.
Optimists see in all this a welcome stimulus for Chinese companies to move out of low-cost production. "You don't want to be a place that can only attract low-end industries," says Nicholas Kwan, an economist with Standard Chartered Bank in Hong Kong. For foreign investment, he says, "Increasingly, the quality matters more than the quantity."
中国作为制造业中心的吸引力略有下降
在经过多年强劲增长后，外商投资中国制造业的速度已开始慢慢下降，这表明中国作为廉价生产基地的形像已经失去了些光彩。
中国多年来一直是世界上获得外商直接投资最多的国家之一，借助这些资金中国成为了世界工厂。但如果不包括金融领域一些一次性投资所带来的资金，中国2005年获得的外商直接投资是略低于上年的。由于6月份的外商直接投资额较上年同期大幅下降了12%，中国2006年上半年的外商直接投资额较上年同期又减少了0.5%。鉴于中国经济仍在以每年10%左右的速度增长，外商投资对整体经济的贡献率甚至下降得更快。
中国获得外商直接投资总额仍然巨大──每年大约有600亿美元──这反映了中国在使其工业基础多样化以及持续获得新的外商投资方面所获得的成功。但鉴于人们已经公认中国对外商直接投资具有不可抗拒的吸引力，因此即使是投资增速的减缓也足以使人感到震惊。
投资下降的具体原因有很多。转移到中国后仍然有利可图的制造业目前已向中国转移得差不多了，而最低端的制造业则已开始向生产成本更低的国家转移。此外，尽管中国在跨国公司眼里并不仅仅是个出口产品生产基地，但它们在收购中国国内企业方面遇到的困难以及中国对外商投资服务业方面的限制却使得外商无法在这两个投资领域大展拳脚。
长江商学院(Cheung Kong Graduate School of Business)院长项兵说，中国应该考虑如何为今后10年定位，跨国公司不会将所有的鸡蛋都放进一个篮子。他认为有必要使外商投资多样化。
政府官员们说他们对外商投资小幅下降并不感到担忧，但也承认，随著中国工资水平和土地价格的上涨，一些外国公司已开始将投资眼光投向了其他国家。中国国家统计局发言人郑京平说，对一些外国公司来说中国的投资成本可能已经上升了，而其他国家也在加大其吸引外商投资的努力。
经历了1997-98年亚洲金融危机后的徘徊阶段，马来西亚和印度尼西亚等东南亚国家获得的外商直接投资又开始增长。甚至一度封闭的越南也开始成为外商转移制造业的新热点，因为该国的投资成本甚至比中国还要低。
没人认为会出现外资大量撤离中国的情形，因为中国巨大的国内市场和高质量的基础设施仍然对许多外商具有吸引力。但像台商王丽华一类的企业家已开始将生产业务转移出中国大陆，以降低生产成本。王丽华与其丈夫1995年在中国南方的广东省开办了一家生产食品添加剂的工厂。
当时，将生产业务从台湾转移至中国大陆使他们将企业的生产成本降低了50%。但自那以来不断上涨的工资水平一直在侵蚀这一成本优势。2004年，王丽华和她的丈夫在越南开办了一家工厂，该厂目前已承担了公司60%的生产任务。王丽华预计其越南工厂的平均成本今年至少会比中国大陆低35%，这主要应归功于低廉的劳动力和租金。她说：“为了保护我们的公司、维持我们微薄的利润，现在是到中国大陆以外寻找新投资地点的时候了。”
台湾公司是首批认识到中国大陆在低成本制造业方面的优势并加以利用的企业，但他们新的投资目前大都投向了亚洲其他国家。受台塑关系企业(Formosa Plastics Group)和裕元集团(Yue Yuen Industrial (Holdings) Ltd.)大型投资项目的推动，台湾目前成了越南最大的外商投资来源地。
某种意义上说，中国成了自身成功的受害者。亚洲的电子工业已经向中国转移得差不多了。而对其他大型投资者来说，他们在扩大对华投资方面则存在著障碍。
2005年，来自日本、韩国和台湾的投资总额较上年下降了6.5%，今年上半年又较上年同期暴跌了31%。这三地在中国大陆的合计投资额要高于美国或欧盟的在华投资。中国方面的统计数据显示，自2003年以来美国的在华直接投资逐年下降(外商直接投资指那些用于新建业务或收购现有业务的外资，不包括用于购买股票或债券的资金。)
日本贸易振兴会(Japan External Trade Organization)驻东京的研究员Tomoharu Washio说，许多日本公司在制造业方面的重大对华投资项目已“或多或少完成了”。例如，本田汽车公司(Honda Motor Co.)2004年开始投资将其在中国的轿车生产能力扩大一倍，它计划于今年完成这一投资项目。Washio说，随著日本经济的复苏，许多日本公司将投资重点放在了增加国内的高端生产能力上。
但外商直接投资的停滞甚至小幅下降对中国来说未必是件坏事。中国政府目前最感担忧的是中国经济的增长速度可能太快了，政府正在努力使国内的投资增长速度降下来，值此之际外商直接投资的减少可能倒是件值得欢迎的事情。外商直接投资下降还有可能减少中国的外贸顺差，从而缓解人民币的升值压力。
对中国政府来说吸引更多的外商投资并非难事──只要它真的想要。从中国最近向海外投资者出售其主要国有银行的股份一事看，海外投资者对中国的投资兴趣依然浓厚。这一股份出售行动2005年为中国增加了121亿美元的外商直接投资。但这些具里程碑意义的股权出售交易未必还能重现，中国政府仍在限制外商投资中国其他服务业领域，已有迹象显示它并不愿意批准一些重大的外资并购交易。
在乐观人士看来，外商直接投资下降对推动中国企业摆脱低成本生产业务是件好事。渣打银行(Standard Chartered Bank)驻香港的经济学家Nicholas Kwan说：“ 你不想成为一个只能吸引低端工业的地方。”他说，对外商投资而言，质量越来越比数量更重要。
Andrew Batson
