Co­op­er­a­tionin ca­pac­i­ty­tore­shape glob­al­val­uechain

China Daily (USA) - - ECONOMY - ByWANG YIQING wangy­iqing@ chi­nadaily.com.cn

In­ter­na­tional co­op­er­a­tion in pro­duc­tion ca­pac­ity is an in­no­va­tive way to boost the global econ­omy and re­shape the global value chain, and there are great op­por­tu­ni­ties for in­ter­na­tional pro­duc­tion ca­pac­ity co­op­er­a­tion with the ad­vance­ment of the Belt and Road Ini­tia­tive.

Ac­cord­ing to United Na­tions In­dus­trial Devel­op­ment Or­ga­ni­za­tion’s In­dus­trial Devel­op­ment Re­port 2016, China ranks fifth in the global Com­pet­i­tive In­dus­trial Per­for­mance In­dex.

As China is the largest trade part­ner of many coun­tries along the routes, its pro­duc­tion ca­pac­ity can help up­grade the man­u­fac­tur­ing in­dus­tries and im­prove in­fra­struc­ture in coun­tries along the routes, es­pe­cially de­vel­op­ing coun­tries.

At a re­cent meet­ing on the Belt and Road Ini­tia­tive, Pres­i­dent Xi Jin­ping said that China has launched in­ter­na­tional pro­duc­tion ca­pac­ity co­op­er­a­tion with more than 20 coun­tries.

“Through pro­duc­tion ca­pac­ity co­op­er­a­tion, China is trans­fer­ring its ad­van­ta­geous in­dus­tries and tech­nolo­gies to coun­tries along the routes, and thus is ac­cel­er­at­ing the dif­fu­sion of tech­nol­ogy and eco­nomic growth glob­ally,” said Zhang Yongjun, a re­searcher at the China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes.

The pro­duc­tion ca­pac­ity co­op­er­a­tion has made re­mark­able achieve­ments in a short time. Ac­cord­ing to China’s Na­tional Devel­op­ment and Re­form Com­mis­sion, bi­lat­eral and mul­ti­lat­eral pro­duc­tion ca­pac­ity co­op­er­a­tion funds along the Belt and Road routes, such as the China-Africa Pro­duc­tion Ca­pac­ity Fund and China-Kaza­khstan Pro­duc­tion Ca­pac­ity Fund, ex­ceeded $100 bil­lion by July.

Sev­eral co­op­er­a­tion plat­forms for pro­duc­tion ca­pac­ity and equip­ment man­u­fac­tur­ing have been es­tab­lished in South­east Asian coun­tries such as In­done­sia and Eastern Euro­pean coun­tries like Be­larus.

In­ter­na­tional pro­duc­tion ca­pac­ity co­op­er­a­tion does not­mean­thatChina is trans­fer­ring its over­ca­pac­ity to other coun­tries, in­stead it is win-win co­op­er­a­tion based on sup­ply and de­mand and the op­ti­mal al­lo­ca­tion of re­sources on a global scale.

“Pro­duc­tion ca­pac­ity co­op­er­a­tion is not dump­ing of low qual­ity prod­ucts in other coun­tries, but com­pet­i­tive co­op­er­a­tion,” said Cao Yuanzheng, for­mer chief econ­o­mist of the Bank of China. “For in­stance, the cost of the ma­jor­ity of steel prod­ucts pro­duced in China is at the glob­ally av­er­age level. These prod­ucts are not out­dated and have a com­pet­i­tive ad­van­tage in the mar­ket,” Cao said.

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