Small-scale factory exit limited impact on China: NDRC

(ECNS) - Manufacturing companies that have relocated their factories to other countries have a limited and controllable impact on China, Meng Wei, spokeswoman for the National Development and Reform Commission (NDRC), said during a press conference on Tuesday.

Meng explained it’s normal for some companies to move factories to other countries because it is in line with the division of industrial labor, a changing global industrial layout and China's transformation toward high-quality development.

She also said some enterprises are shifting to places where labor costs are low and environmental protection requirements loose. Some other companies have relocated to explore the international market, and only very few enterprises made the decision as a result of Sino-U.S. trade frictions.

Relocating manufacturing is not an easy task because it involves many factors such as operating costs, supply chains, transportation and business culture, so some companies that left in the past two years have moved back to China, Meng said.

A recent study showed many shoe manufacturers from Dongguan City in Guangdong Province closed their factories in Southeast Asia for various reasons and returned to China.

Meng noted the scale of company relocation has not been large, with most enterprises in the middle and low levels of the industrial chain, so their impact on China’s economic growth, industrial upgrading and employment are controllable.

She added that the NDRC will work with other departments to continue promoting high-quality development in the manufacturing industry. Measures will include deepening reform, further opening up, and unleashing the potential of domestic consumption. 

"I believe with a series of policies and measures, most enterprises will remain in China for deeper development with more companies to invest in China,” Meng confirmed.