The further upgrading of Asian manufacturing industry is facing a severe test under the influence of the sluggish economic outlook of the US and Europe and the possible decline of exports. Recently, the purchasing managers' index (PMI) of global and national manufacturing industry published continuously shows that global manufacturing output and orders tend to decline. JPMorgan's latest global PMI index fell to 50.1% in August from 50.7% in July. By convention, a reading above 50% indicates an overall expansion of the manufacturing sector and vice versa. Obviously, the global manufacturing industry is in a critical stage of continuous rise or decline.
Increasing domestic demand is expected to offset the adverse impact of external environment
Asia is the base of global manufacturing. In most Asian countries, manufacturing is more developed than service industry. ASEAN and China, Japan and South Korea (10 + 3) take manufacturing as their export pillar. According to the data of the Asian Development Bank, in 2009, China accounted for 13% of the global exports of manufacturing products, ASEAN 10 countries accounted for 6.1%, Japan 6%, South Korea 3.7%, and "10 + 3" accounted for 29% in total. Among the global machinery and transportation equipment exports, "10 + 3" accounts for 31%.
According to the analysis, Asian manufacturing industry was greatly impacted by the international financial crisis in 2008. Since then, major Asian manufacturing countries have adjusted their export structure and focused on developing new export markets. The domestic demand of Asian countries has also increased rapidly in recent years, which has increased the ability to "digest" manufacturing products in the region. According to the recently released purchasing managers' index of Asian countries, although the new export order data has declined, the overall new order and employment data are growing at the same time, which shows that more new orders come from the local market, and the improvement of domestic demand is expected to offset the adverse impact of the external environment.
The development of manufacturing industry has become an important reason to improve the living standards of people in Asian countries, and the improvement of living standards is conducive to the expansion of manufacturing industry. In an interview with our reporter, DUI jingguilang, a senior economist at the Philippine National Bureau of the Asian Development Bank, said that manufacturing industry is the pillar of a country's economic development. The main way for most developing countries in Asia to improve their economy and reduce poverty is to rely on the continuous development of manufacturing industry.
Large multinational companies are likely to invest more in Asia
Zhuang Juzhong, deputy chief economist of the Asian Development Bank, told our reporter that compared with Latin American countries, Asian manufacturing industry has the advantages of low labor price, high quality, abundant human capital, stable overall political and investment environment. In addition, China, India and other countries have broad markets, which make Asia the main investment target of global manufacturing enterprises.
According to the world investment report 2011 released recently by the United Nations Conference on Trade and development, foreign direct investment into South Asia, East Asia and Southeast Asia increased by 24% in 2010, reaching US $300 billion, accounting for nearly a quarter of the global total. In 2010, FDI into ASEAN more than doubled to US $79 billion. The report predicts that Asian economies have made great progress in regional economic integration, and the development environment of the whole region will be more conducive to attracting foreign investment.
According to the analysis, Asia's advantages in the field of manufacturing are hard to be replaced by other regions in the world. Although developed economies will focus on boosting the recovery of manufacturing industry in order to increase local employment rate in the future, large multinational companies in these countries are unlikely to move back factories already established in Asia and other regions of the world, especially labor-intensive industries. On the contrary, due to the uncertain domestic economic prospect and more prominent manufacturing and market advantages in Asia, large multinational companies are likely to increase investment in Asia. Since last year, this trend has been very obvious.
On the whole, the problems in developed economies have not weakened the profitability of their enterprises. In the future, these enterprises will be more active in the global investment and M & A activities, which is likely to be an opportunity for Asian countries with manufacturing advantages to attract more foreign investment.
In the second quarter of this year, U.S. enterprises continued to accumulate profits and cut spending, with the total amount of cash and other liquid assets held by enterprises increasing to $2.047 trillion, up 4.5% from the first quarter, according to the Federal Reserve's express report released on the 16th. Corporate cash holdings are the highest since the Fed began the survey in 1945. Bloomberg's previous forecast showed that Japanese companies with a total of $2.4 trillion in cash would seek to acquire overseas to improve yields.
The development of Asian manufacturing industry is also accelerating the interaction within the region, forming a situation of strengthening the production chain through competition and complementarity. For example, in the same manufacturing industry, Vietnam, Indonesia and other countries have more cost advantages than China in the production of clothing and shoes, but relevant machinery and equipment need to be imported from China. About $35 to $40 of every $100 of China's processing and production exports to European and American markets go to Southeast Asian countries. This situation has greatly promoted the promotion of manufacturing industry in the region.
At the same time, enterprises in the region are also increasing mutual investment. Many Chinese clothing, footwear and other enterprises have transferred their factories to Southeast Asia. Last year, the ASEAN 10 countries' mutual investment in manufacturing reached a record $21 billion.
Developed economy and manufacturing industry challenge the upgrading of Asian industry
Asian manufacturing still faces some problems. According to Zhuang Juzhong, the first is to continue to expand domestic demand and reduce dependence on developed countries' markets; the second is that developed countries are also actively revitalizing their manufacturing industry to create more jobs, which will benefit Asian countries