MOFCOM report: new competitive advantages of China's global supply chain are taking shape

During the third Qingdao summit of multinational corporation leaders in 2022, the Research Institute of international trade and economic cooperation of the Ministry of Commerce released the report "multinational corporations in China: re selection in the reconstruction of global supply chain". The report points out that the low-cost competitive advantage of China's manufacturing industry has weakened in recent years. According to the report data, the average annual growth rate of monthly wages in China's manufacturing industry from 2016 to 2020 was 9.84%, which was not only higher than that of developed countries such as the United States (3.77%), Japan (0.75%), South Korea (1.60%), but also higher than that of developing countries such as Vietnam (4.54%), India (1.47%). In absolute terms, in 2020, the average monthly wage of manufacturing in developed countries such as the United States, South Korea and Japan will be 4.8, 3.8 and 2.6 times that of China respectively, while that in developing countries such as Vietnam and India will be only 1/3 and 1/5 of that in China. Compared with major countries, China has a slight advantage in the price of industrial water and natural gas, but the price of industrial land is 2.8 times that of Vietnam and 3 times that of India. However, China's cost-effective advantages in labor productivity, digital transformation, infrastructure and market scale are becoming increasingly prominent. At the same time, as the Chinese government continues to implement a series of policies and measures of reform, opening up and transformation and development, China will form new competitive advantages in the supply chain in terms of comprehensive efficiency of the supply chain, innovative application scenarios and open economic system, which still has a strong attraction for multinational companies to invest in China.