Why is everyone worried about China’s industrial transfer?

China has a population of 1.4 billion, and food is a basic necessity for survival. While some people look down on “screw-tightening” factory jobs, these factories provide crucial employment opportunities for many ordinary people, offering them a way to earn a living.

Factories not only maintain employment but also boost the surrounding service industries. Take Foxconn as an example—it directly offers 1.2 million jobs and, along with its supply chain, indirectly supports the livelihoods of around 5 million people. This isn’t just about Foxconn; countless factories across the country play similar roles.

However, as industries shift to Southeast Asia, Eastern Europe, India, and Mexico, many orders are lost. Domestic factories see fewer orders, lower wages, and rising unemployment. Some factories no longer hire people over 35 or those with either too high or too low educational qualifications.

Many of the businesses moving abroad are Chinese-owned. The owners take management and skilled workers to foreign markets, leaving most ordinary workers jobless. The loss of their spending power also impacts small businesses, restaurants, and entertainment venues that relied on them.

Western countries use trade policies to reduce dependence on Chinese manufacturing, redirecting orders to emerging industrial nations. Even if these countries’ products are not as good as China’s, Western buyers are willing to pay more to diversify supply chains.

China’s domestic market of 1.4 billion people is vast, but achieving a healthy internal economic cycle depends on boosting ordinary people’s purchasing power. More people need the ability to consume and drive economic growth.

If China cannot effectively address industrial transfer and declining consumer power, it may face more significant economic and social challenges.