How Long Can China and the United States’ “Shop Front, Back Factory” Model Last?

Published in Huanqiu
(China) on 20 February 2012
by Yang Chun Yang (link to originallink to original)
Translated from by Jonathan Dixon. Edited by Laurence Bouvard.
After China began its policy of “opening and reform,” Hong Kong enterprises moved their production facilities onto the mainland but continued to be responsible for selling goods on the international market. This became the “shop front, back factory” model, which today has developed into a sort of dilemma. For example, Guangdong, which once appeared to be Hong Kong’s economic hinterland, gradually reduced its dependence on Hong Kong investments due to transformations and upgrades in its industrial sector. This has led to a trend of “find another Hong Kong.”

Let’s look at this “Hong Kong-style quagmire” in terms of Sino-American economic relations. In the current world order, it seems as if America, Europe and other developed economies have taken on the function of “shop front” for China. As for the “factory,” China has the processing plants and production plants. It is only recently that the United States, listening to the demands of other developed countries, has made an effort to return manufacturing to local sources. Most recently, in the New York Times, an article titled “How the U.S. Lost Out on iPhone Work” addressed this economic phenomenon.

That Sino-American economic relations face a “Hong Kong dilemma” is only a hypothesis; in essence this is an economic upgrade, the inevitable result of industrial restructuring. The crux of the matter between China and the United States is not only how long this “shop front, back factory” model will last, but also, where is there room for improvement?

After this latest financial crisis, America’s economy will certainly face a substantial revision. Economists are saying that this is necessary for the rebalancing of the global economy. This economic rebalancing isn’t a simple matter of returning production jobs. According to the structure of the current economic system, these jobs can’t return. This is because American workers cannot accept the same wages as their Chinese counterparts and this increases the price of labor. As the New York Times article clearly indicates, if you rely on production in the U.S., the cost for Apple products would certainly increase and lead to a great loss in competitive advantage.

For the last 100 years, the economic structure has not been like it is today. Because globalization is basically dominated by the developed countries of Europe and the United States, it has forcibly moved onwards. Moreover, between the various countries and regions, the economic and social development gaps are vastly different. The world markets are complementary and balanced.

At present, the weight of the emerging economies and developing countries in the global economy has improved significantly; they provide the voice for rebalancing the global economy. In China, for example, capital had long been a scarce resource. Now, China has become a capital-exporting country. The world will be forced to accept the output of China’s capital, which is a global economic rebalancing. However, this rebalancing is not limited to who is buying U.S. Treasury bonds.

The heart of the so-called “Hong Kong dilemma” is the rebalancing of the global economy. The recent global financial crisis, global governance and how to improve economic globalization are things that every country, particularly China and the U.S. as the world’s two largest economies, must consider.


改革开放以来,香港企业家到中国内地办厂,香港负责向国际市场推销,与内地形成“前店后厂”的产业分工模式。这种模式如今已经演变为一种“困局”,即像广东这样曾经是香港经济腹地的地方,由于产业结构的转型升级,已经逐步降低对香港投资的依赖,出现“去香港化”的趋势。


  把这种“香港式困局”联系到美国与中国的经济关系来看。在全球化分工的大格局之下,中国与发达经济体关系中的“前店”的功能,似乎被美国、欧洲和其他的发达经济体拿走;而“后厂”,就是加工车间和生产线的功能,则为中国所拥有。只是近来,以美国为代表的发达经济体,都有一种要让制造业回归本土的呼声和行动。最近,《纽约时报》的一篇题为“美国是如何丢掉苹果的工作”的报道,就是对与此有关经济现象的集中反思。



  中美经济的“香港式困境”只是一种假设,其本质是其经济升级、产业结构调整的必然结果。现在的关键是,中美之间这种“前店后厂”的模式还能维持多久,它的改进余地在哪里?


  在这次金融危机之后,美国经济将面临一次不小的调整。就像经济学家们所说的,要实现全球经济的再平衡。这个经济再平衡不是简单地让制造业回归本土。按照市场规律,它回归不了。因为美国工人绝不会接受中国那样的劳动力价格和劳动工资,这一点《纽约时报》已经说得很清楚:如果真的放在美国生产,其成本肯定会使苹果产品丧失很大的竞争优势。


  在上百年的时间里,经济再平衡的问题并没有像今日这般被频繁提及过。因为以往的全球化基本是由欧美发达国家主导的,甚至用武力强行推进。而且,当时的各个国家和地区之间,经济和社会的发展差距很大,对发展目标的要求也完全不一样。世界市场在当时是互补的,是平衡的。


  当前,新兴经济体和广大发展中国家在全球经济中的分量明显提升,对全球经济的话语权也明显提升,它们对全球经济再平衡的呼声非常强烈。以中国为例,资本对于中国,长期以来都是稀缺资源。现在,中国已经成为资本输出大国,世界将以怎样的方式接受中国的资本输出,这就是一个全球经济再平衡的问题。但是,这种再平衡不能再仅仅以购买美国国债的方式。


  所谓“香港式困局”的核心,是全球经济的再平衡。这次全球经济危机之后,全球治理如何改善,经济全球化将以什么方式进行调整,是每个国家都在思考的问题,尤其是中国和美国这两个世界前两大经济体必须认真考虑的问题。▲(作者是中央人民广播电台经济之声副总监)
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