Value of manufacturing in the post-virus era

Editor's Note: Cao Dewang, board chairman of the Fuyao Group, a leading Chinese auto glass manufacturer, recently spoke to Beijing News on the importance of valuing manufacturing and mastering core technologies and other issues following the novel coronavirus outbreak. Following are excerpts:

It is believed that after the outbreak, mistrust among countries will grow and they are certain to make some adjustments to their industrial chain policies, such as building a more independent, complete and secure industrial chain of their own. An anti-globalization trend could emerge, but it will harm all countries and spell disaster for the global economy.

After the outbreak, some countries might want to reduce their dependence on China industrially, something we must guard against, considering that it will be difficult for the global industrial chain to find an alternative economy to China in the short term.

The global industrial chain cannot and should not decouple from China. However, we must self-reflect on the fact that, because of rising labor costs, trade frictions and other factors, the cost of China's manufacturing industry has been rising, making it lose its previous competitiveness. For example, some manufacturing enterprises have started moving out to lower-cost Southeast Asian nations. The decline of manufacturing competitiveness will lead to the decline of China's national competitiveness, and we need to be vigilant against such a trend.

Many people often divide industries into high-end and low-end and in their eyes, internet and big data are high-end industries while manufacturing, with its cheap labor, is a low-end one. However, after the outbreak, one can say it is dangerous for a country to seriously depend on exports for traditional manufacturing products such as epidemic prevention materials. So, China must have some long and prosperous traditional industries.

To establish an independent and complete industrial system after the epidemic, China must not only pay attention to traditional manufacturing, but also master some core technologies, without which China's development will be under the restraint of foreign industrial chains.

Manufacturing is the foundation of a country's national economy and without it many so-called high-end industries cannot be developed at all. Excessive real estate investment and development in China in the past few years have led to the flow of bank capital, labor and other resources to the property sector, driving up manufacturing costs. If the country no longer blindly promotes real estate development, it will save large amounts of labor, capital and other resources for the development of other sectors.