Over the past 75 years, China has witnessed an extraordinary transformation, emerging as a global powerhouse in economics, technology, and military strength. This remarkable growth is not just a product of recent reforms and opening-up policies but is deeply rooted in the early efforts to establish a robust socialist system and a strong political and economic foundation.
Big Trees Have Deep Roots
In July 2024, Foxconn Group made a significant move by investing 1 billion yuan ($141 million) in its new headquarters in Zhengzhou, Henan Province. This decision comes despite previous shifts of its supply chain to countries like India and Vietnam. Simultaneously, Apple is planning to bring some of its manufacturing back to China, incorporating major Chinese companies like BYD and Luxshare Precision into the iPhone 16 supply chain. These investments highlight the enduring vitality of China’s reform and opening-up policies, even in the face of U.S. rhetoric surrounding economic decoupling.
Since 1978, China has transformed from a less developed nation into the world’s largest industrial and trading power. This journey involved significant market reforms and integration into the global manufacturing network. Throughout this period, China has navigated through institutional reforms, the global financial crisis, the COVID-19 pandemic, and shifting demographic trends, maintaining its position as a hub for global manufacturing and innovation.
In contrast, Latin American and Eastern European countries, despite adopting market-oriented economic institutions earlier, experienced only brief periods of growth before falling into stagnation. The key to China’s sustained success lies in the strong groundwork laid during the early years of the People’s Republic.
A Comprehensive Industrial System
One of the primary reasons foreign enterprises continue to invest in China is its comprehensive industrial system coupled with a vast domestic market. For instance, French automotive parts maker EFI sources over 90% of its products from local Chinese companies. Additionally, 80% of the electric motors and 100% of the magnets required for manufacturing are supplied by Chinese firms. This robust supply chain, combined with a mature market, provides companies like EFI the confidence to deepen and expand their presence in China.
The strength of China’s industrial infrastructure and the strategic implementation of early reforms have created a resilient economy capable of attracting and sustaining global investments. As China continues to innovate and integrate into global markets, its foundational efforts remain a critical driver of its sustained growth and global influence.
Reference(s):
cgtn.com
