Some say the U.S. wants to go the way of China.

Started to attract investment, plans to revitalize manufacturing.

From an overall perspective, it has triggered a reconfiguration of the global supply chain.

From a local point of view, investment opportunities and challenges.

To look at it from another angle, it may not be entirely bad for China.

Both prove the trend of "domestic substitution", but also reflect the resilience of China's supply chain.

01The clouds have been lifted 

Today, the boots are on the ground.  

--The U.S. imposed a 104 percent tariff on Chinese goods.

But China was prepared, and the backhand is a set of "reciprocal increase".

A Chinese product that costs $100 to make in the U.S. costs twice as much.

Beef and chips imported from the United States are also expected to soar in price by more than 30 percent.

And then, for example, if you go to the supermarket and buy a bottle of Lao Gan Ma, which used to cost 10 yuan, it is now marked at 20 yuan and 40 cents.

As far as investment is concerned, the impact will be different under global free trade.

Obviously, directly accelerate the process of domestic substitution, forcing technological breakthroughs in science and technology.

At present, the U.S. Applied Materials, Pan-Lin Group and other companies, accounting for about 40% of the global semiconductor equipment market.

Global free trade, photolithography, etching machines and other key equipment import costs or increase by more than 50%.

This will force SMIC, Huahong and other enterprises to accelerate the shift to domestic equipment, domestic equipment at the price end of the advantage of further highlights.

And, boots formally landed, do foreign trade enterprises called "the impact is too great".

In particular, the survival of export-oriented private enterprises, if they are not willing to expand, it will exacerbate deflation.  

But some companies have hedged their bets on global free trade with innovation.  

Guangdong a small home appliance enterprise research and development "gallium nitride fast charging" technology, took the world 23 patents, even if the tax increase of 50%, U.S. customers are still willing to pay for its premium.

For the U.S., in this way, global enterprises face two choices:

First, the use of tax incentives, in the U.S. mainland factory production.

Second, import goods from overseas factories to the United States, but subject to fees

Based on this, the logic of the U.S. tax hike is very simple, forcing the manufacturing industry to return and suppressing Chinese exports.

Short-term increase in revenue, the long-term ability to reduce the domestic income tax rate, prompting companies to return to the United States to build factories to promote the United States re-industrialization.  

So why didn't the manufacturing industry stay in the United States in the past few decades? Mainly, the United States labor costs are too high.

The same production out of a piece of clothing, in the United States production of labor costs is China's 5 to 10 times.

As the world's second largest economy and the second largest consumer market for goods, China's supply chain efficiency and cost advantages, no one can replace in the short term.

In China, take the new energy vehicles, for example, the Yangtze River Delta, the formation of a new energy vehicle "4-hour industrial circle".

A complete industrial chain of new energy vehicles is built within a 4-hour drive, playing to the strengths of each region to promote high-quality development.

For example, Shanghai provides chips, software and other components of the car "brain", Jiangsu provides power batteries, Zhejiang provides integrated die-casting machines, Anhui vehicle assembly.

For the United States, want to fully restore the manufacturing industry, especially in the field of light industry, in fact, more difficult.

Mainly because the industry chain over there is limited, and so the full restoration of the conservative estimate is about 10 years.

For the production of cell phones, automobiles and other products, not to move back to the machine manufacturing plant can be, you must move the entire industrial chain back to self-sufficiency, which takes a long time.  

So, this operation industry back to the flow", anti-will hollow out its innovation ecology and market vitality.

02 Investment opportunity in which

Global free trade, China out of the precise.

Just announced that an 84% tariff increase on U.S. goods.

Which covers agricultural products, automobiles, energy. Even, Starbucks coffee beans and Haagen-Dazs ice cream.  

There are also export controls on rare earths, which China has 90 percent of the world's processing capacity in hand, choking the U.S. semiconductor and military industries.

Some people say that without China's rare earths, chips are a pile of scrap metal.

The U.S. wants to manufacture, but China is breaking through with science and technology.

In China, the self-sufficiency rate of domestically produced chips has been raised from 18 percent to 45 percent through technological breakthroughs.

More fatally, the Commercial Aircraft Corporation of China (COMAC) C919 has broken through 25 percent of the domestic market share with a 60 percent localization rate.

There are also some new opportunities for investment.

One is that Chinese companies building factories in Southeast Asia, such as Vietnam, are likely to move back.

Vietnam's export surplus with the U.S. is as high as 104.4 billion U.S. dollars, but the core of its industrial chain depends on Chinese enterprises "re-export trade".

Some textile companies, 30% of the orders were forced to move to Vietnam, but the Vietnamese factory technology is not up to scratch, the rate of defective products soared 20%, considering the return to the central and western China.  

Two, the domestic alternative to enter the accelerated period, a number of manufacturing enterprises to voice.

It is worth noting that a number of leading domestic enterprises said that the short term, although facing pain, but the actual impact is controllable.

In China, is in a key stage of high-end manufacturing transformation, the demand for high-end industrial motherboards, semiconductor equipment is explosive growth.

This time, the technical embargo, on the contrary, accelerated the servo motor, precision guide and other core components of the domestic substitution process.

Nantong Guosheng intellectual research and development of five-axis gantry machining centers, the price is only 50% of imported products.

Code CNC core components of the independent rate of 85%, to fill the gap in the aerospace field.

Thirdly, some foreign investors attach importance to the Chinese market, and will open the localization deployment.

In March this year, foreign entrepreneurs came to China intensively.  

For foreign companies, long-term certainty is needed to better deploy future investments.

Taking the example of Germany's Vibracoustic, a global leader in automotive shock absorbers, it is producing air suspension in China for the first time.

Not only is it producing air springs in China for the first time, but it is also bringing double-chambered air springs, which are used less locally in Europe, to China.

More and more foreign companies, in order to "bring more technology from China to the world", even the first debut, the first test are arranged in China.

This also shows that nowhere else can new technologies be tested as quickly as in China, which is witnessing a steady rise in China's innovation capacity as it shifts from "production" to "R&D".

03Domestic substitution Supply chain strong

The current face of the status quo, the countries have to fight back.

Recently, the EU multi-national senior officials and trade representatives intensively visited China, seeking to strengthen pragmatic cooperation with China; China, Japan and South Korea recently discussed to accelerate the FTA negotiations, and jointly promote regional and multilateral cooperation ......

It can be imagined that when more and more countries due to the "tax wall" to bypass the U.S. market.

This looks like a game between countries, but actually returns to the global supply chain.

We believe that the core of the global industrial chain is cost minimization and efficiency maximization.

At this stage, the main reason for the slowdown in business investment comes from several aspects:

Balancing cost, efficiency and security, resilience, including some local development, national level and other considerations.  

For enterprises, the instability of the industrial chain and supply chain not only affects the development of globalization, but also involves the continuity and stability of the company's business.

As far as investment promotion is concerned, there is a need for cooperation between industry and industry, between government and industry, and between government and government.

In this way, these uncertainties can be quickly eliminated to help companies balance costs, get orders, and expand the region.

April 8, the authoritative media voice, in that article "focus on their own affairs", it is mentioned:

To turn the pressure into power, accelerate the construction of a new pattern of development, to promote high quality, and promote the economic restructuring of strategic opportunities.

For China, the supply chain reconstruction has also long been in action.   

In the race for the world's top high-tech, Made in China will certainly not be absent.  

These years, the new energy vehicle automobile, humanoid robots, low-altitude economy and other industrial development, destined to open the kinetic energy conversion.  

For example, Tesla, as a leader in the field of new energy vehicles, launched a humanoid robot Optimus a few years ago.  

Reiterating, the domestic car companies are not willing to lag behind, Xiaopeng Automobile, Guangzhou Automobile, BYD, Chery, Xiaomi, Sailix, SAIC, Chang'an, Dongfeng and other more than a dozen automobile companies have also entered the game.

It's true what they say, Chinese car companies can build cars as well as people.

There are two main reasons why they are all involved:

On the one hand, they see the future potential and value of the industry.

On the other hand, "technology homology, industry overlap, market intertwining" is the driving force.

Since this year, the major lithium-ion and new energy automobile enterprises to solid-state battery research and development and application of the latest progress.  

It is expected in 2025 to realize the semi-solid state battery mass production, 2026 year vehicle applications, and then in 2027 to enter the full solid state battery mass production stage.

Technology can subvert the business model, but can not change the market rules.

Only supply chain reform can change the traditional mode of production and economic operation mechanism, promote the flow and utilization of factors of production, and improve the rate of resource allocation.

Under the national free trade, there is a dark line.

--Strong supply chain, then the national economy is strong.  

Looking at China again, the fundamental reason to have the courage to counterattack, it is by the supply chain upstream and downstream of the close "link force".

This is the attraction of China's investment, but also the core competitiveness of China's industry.