China's manufacturing industry is facing a real crisis

What is the impact of the accelerated transfer of American companies to Vietnam and India on Chinese manufacturing?

 Apple has planned to move 20% of its iPhone production base to India, which means that Apple phones will be purchased later Could be "made in India". Apple isn't the only company, India says more and more U.S. companies will "leave India ". Modi and Apple and other U.S. companies in December 2019, according to the Indian newspaper The Economic Times executives meet and hope they transfer part of the production line to India. India has earmarked about 461,000 hectares of land nationwide Land, for the use of relevant U.S. enterprises, and has actively contacted more than 1000 U.S. enterprises, hoping that they "leave India ".

 Recently, US President Donald Trump has repeatedly expressed his desire to strengthen cooperation with India. In the current context of complex international relations, A stronger U.S. connection with India and a shift of business to India will inevitably affect the global industrial chain, the economies of India, the United States, and China。

 All have significant effects. In addition to the US, the EU is focusing on India。 CNMOULDING note that, in addition to the U.S., India is also in deep contact with companies in major European countries, many of which are already Talking to India. More importantly, by the end of 2019, India refused to join China, Japan, Australia and  ASEAN's RCEP", are negotiating free trade with the EU. Apparently, in India's eyes, the EU is largely a Developed economy, while India is currently a developing country, have strong economic complementarities —— India can Export labor-intensive products to the EU, introduce the EU's high-tech products, introduce the EU's capital and technology, and provide its own labor Force...

 The current media do not report on the extent of free trade negotiations between India and the European Union, but if the two sides agree, that is invisible

 China has also significantly increased India's ability to attract enterprises from large European countries, which will give India a huge boost to development and export markets 。Vietnam, too, has attracted the U.S. and European attention. In addition to India, the U. S. and Europe's eyes also stopped in Vietnam, many multinational groups have transferred part of the production line to Vietnam. As a result, Vietnam's total exports and imports have grown significantly more than its GDP. Data show Vietnam GDP 2019

 About $260 billion. But imports and exports totaled $516.96 billion, about twice the GDP. More importantly, Vietnam's Foreign trade is growing faster than GDP, and the gap is expected to widen. Although current Vietnam, India introduced the United States The number of European enterprises is relatively small, and the introduction is mainly downstream of the industrial chain. But if it continues, it will

 It is possible to add several "world factories" to boost the economic development and trade of goods in India and Vietnam and boost the global economy of both countries. The status of the Jige Bureau, reducing China's ability to attract foreign investment, and the possibility of changing the current world economic development pattern, its overall shadow

 Sound can not be ignored. Of course, India and Vietnam have many drawbacks. For example, there is a caste system in India and the cultural level of the population is low. There are big differences in policies, such as the gradual weakening of Vietnam's labor cost advantage and the size of its own market is not the most ideal environment for the development of foreign capital. Striving upward in the difficult situation will be the direction of all Chinese mold makers and the injection molding industry in the future.

China can enter into SDR? difficult!

SDR This word is very hot in China, even those of us who knew injection molder, the recent G20 summit, Xi also specifically mentioned the SDR, he IMF is SDR included IMF package for the Renminbi welcomed. It is generally estimated that at the end of this year will be the inclusion of the RMB IMF SDR.

China RMB

   So, SDR is what exactly? Literally, it is a Special Drawing Right, a unit of account.

   As we all know, used to have a Bretton Woods system, the dollar and gold are based on the gold exchange standard, the dollar pegged to gold, the currency of another IMF member countries maintain a fixed exchange rate with the US dollar, which is the US dollar as the national currency anchor. Anchor tie in the sea, the boat would not looked out of the dollar as an anchor, other currencies would not have too much volatility. However, when the economic crisis after the United States itself, the Americans abandon gold convertibility of the dollar obligations, the anchor is not unreliable.

   So we have expectations of the IMF this SDR, SDR has called into paper gold. SDR value of the dollar now, the euro, current exchange rate to a basket of currencies the pound and yen currency posed four determined, if the yuan to join SDR, has become the fifth currency basket.

   What are the benefits of this? Benefit more, IMF hundred seven or ten Member States, each of SDR can be used to trade between these countries journal, SDR became a hard currency, the yuan into the SDR basket is equivalent hard currency became the quasi This is an important step towards the RMB international circulation.

   SDR can promote the internationalization of the RMB, but adding SDR is very hard, it has two preconditions: First, trade in this country must be in the top four in the world, the Chinese no problem; second, the currency of this country must be free use of the world, and the international community has been that the yuan is not freely circulate, this Yinggang Gang would not reach.

   So China through what work it? And national recognition technique is money, money as the other reserve currency, with many countries we have such a contract, to a certain extent to achieve the freedom to use. The liberal use of course there are two concepts, one condition is that both sides are not denominated in RMB, RMB-denominated trade much, and the other conditions are not freely traded on international markets, especially those with no long-term futures Variety.

   Understand these two points, you will know why this summer, once the yuan depreciated flash, flash demoted is to create a condition of full compliance with the SDR, because some people think that the yuan central parity with the final transaction price is still lagging behind, the central parity offset, The central bank essentially banished by flash let's settlement price with parity agreement.

   What requirements are free to use the currency? Also requested market is free, the government no administrative intervention. Make this point, it is generally clear, "Why the Chinese government in July after IMF bailout stock market responded very strongly" the. In other words, they believe that contrary to the principle of entering a SDR, is the market has been dominated administration.

   So, this is why we are leaders in various international forums have made important reason to explain. During the past 50 days, the study has been five times to talk about the stock market greatly, essentially the same tone, the bailout is international practice, nor is it a long-term behavior, in order to avoid a systemic financial crisis, and now China's market in gradual recovery of self-running capabilities. This is a basic tone, with SDR indeed related.

   Over the past two months, we have a lot to worry about, it is that the Chinese government can not simultaneously fight two wars in the two markets, a stock market battle, a battle of the RMB. Ultimate focus is on the intersection of SDR, and now it seems, the issue has been largely resolved.

   Of course, there will be a lot of misunderstanding, some people say is not mean I can hold renminbi freely spend abroad, is not what I buy things on the Internet scouring the sea can be settled in RMB? In fact, things are not so simple. RMB into the SDR is an important step in the internationalization, the yuan freely convertible but the distance is still a certain distance, calm estimate it will need five years to 10 years.

   Therefore, the RMB into the SDR to the lives of ordinary people have little effect, the advantage is to help raise the prestige of the RMB, the yuan more strong, more and more wide scope, the Chinese economy's influence on the world economy is also growing, becoming China a symbol of national prosperity.

   What is the dollar? Dollar can everywhere, this is the dollar. RMB have become hard currency, but also ultimately convertible, but also all over the .

 Cnmoulding-Plastic Injection molding company, we only trust Dollar will up.