April 14, 23
> > > > > > > The micro-foundation of economic globalization is the breadth expansion of multinational companies' investment in the world and the cross-border flow of their products, technologies and human resources among molecular companies all over the world. Compared with the transnational corporations in previous years, the transnational corporations operating in globalization not only avoid the traditional limitation of relying on single or scattered national resources, but also embody a division of labor system and a division of labor and cooperation relationship that effectively utilizes and integrates global elements on a global scale, thus making the contemporary international division of labor show the characteristics of deepening. What is China's current position in the deepening division of labor led by multinational companies? How does the massive entry of multinational companies into China affect China's international division of labor? These are the core questions that this paper tries to solve.
> > > > > > > First, the deepening trend of international division of labor and its motivation
> > > > > > > International division of labor is not only the most basic motivation for the formation of world market and world economy, but also the core basis for a country's international trade and international economic role. Since the traditional international division of labor theory was founded more than a century ago, the international division of labor has gone through the process of deepening from inter-industry international division of labor to intra-industry international division of labor, and then to intra-product international division of labor. The traditional concept of international division of labor can no longer fully reflect all the contents of contemporary international division of labor, and the driving force of international division of labor is no longer limited to the differences in natural factors. From the technical conditions and institutional background, the deepening of international division of labor can be said to be the inevitable product of economic globalization. If the rapid development of communication and information processing technology, the reduction of the cost of using global resources and the convenience and feasibility of long-distance and multi-time business transactions are the technical conditions for deepening the division of labor, then the elimination of the obstacles to the flow of factors caused by the liberalization of investment policies is the "possibility boundary" of transnational distribution and organizational production, which is the institutional guarantee for enterprises rather than countries to lead the international division of labor.
> > > > > > > > The multi-layered content of division of labor is the primary manifestation of the deepening of contemporary international division of labor. Contemporary international division of labor actually includes multi-level division of labor between different industries, between different products in the same industry and between different processes and different value-added links in the same product. If the boundary of classical international division of labor is industry, the boundary of contemporary international division of labor lies in the value chain, and the international division of labor in the value chain has become a brand-new result of deepening international division of labor. Value chain refers to a series of interrelated value-added activities such as design, manufacturing, distribution and service. The basis of value chain division is the more specialized subdivision of production activities and other functional activities, which leads to the shift from the division of final products to the division of labor in the whole process of value appreciation. The traditional theory that the density of factors determines the status of international division of labor is still applicable, but the meaning of factors has been greatly broadened. Under the background of economic globalization, the role of traditional elements such as natural resources and labor tends to weaken, while the role of knowledge elements such as technology, information, talents and innovation mechanism tends to strengthen, and these elements have a high degree of international mobility. Moreover, more importantly, the proportion of elements required in each link of the value chain is different. Therefore, the division of labor can be defined as the traditional division of labor-intensive industries, capital-intensive industries and technology-intensive industries, and it can also be the division of labor among the links in the value chain of the same industry and the same product that are labor-intensive, capital-intensive, technology-intensive or other-intensive.
> > > > > > > The diversity of the division of labor subjects is another manifestation of the deepening of contemporary international division of labor. Classical trade theory mainly reveals the basis of industrial division of labor between countries and mutual trade to improve income, and its corresponding environment is international division of labor with countries as the main body. Until the end of the last century, the theoretical discussion on the pattern of international division of labor was still characterized by the horizontal division of labor between developed countries and the vertical division of labor between developed and developing countries, which showed as follows: a large number of intra-industry trade between developed countries; A large number of inter-industry trade between developed and developing countries; Developed countries specialize in capital-intensive and technology-intensive industries, while developing countries specialize in labor-intensive and resource-intensive industries.
> > > > > > > Today, the national boundaries of traditional division of labor have been obviously weakened, and enterprises (especially multinational companies), rather than countries, have become the main body of division of labor. The division of labor has changed from one country to another, and quite a few of these enterprises are subcontractors subject to the same control system or fixed contracts, rather than the external world market. Its core performance is that large multinational companies tend to be more narrowly specialized and subcontract more and more functions to independent companies distributed all over the world; Large multinational companies tend to focus more on knowledge-intensive and intangible functions such as product design, research and development, management services, marketing and brand management, and subcontract more productive links to contract manufacturers around the world, or even withdraw from production completely.
> > > > > > > The diversity of ways to realize the division of labor is another manifestation of the deepening of contemporary international division of labor. The traditional meaning of international division of labor refers to the labor relations established by producers in various countries through the world market, which is the only way to realize the traditional division of labor, and it is an inevitable way to realize the production relations or division of labor between countries through international exchanges in the world market. However, as an enterprise form corresponding to the world economy, the great development of transnational corporations has made the institutional arrangements outside the market develop more deeply, and the connotation of international exchange is greatly enriched. Traditionally, the exchange that is defined as surpassing the national economy only happened between different products of different countries, different enterprises, but now it can also happen in the same country (between different branches of multinational companies in the same country), the same enterprise (within multinational companies) and the same product (in different production links). Therefore, the international production connection is not necessarily established through the external market, and the way to realize the international division of labor has changed from relying solely on international trade in the external market to a pluralistic pattern in which the external market and the internal market coexist. In the internal market, the international division of labor may be carried out through equity investment or non-equity subcontracting. The choice of mode is more determined by industrial characteristics or enterprise strategy than by the behavior of producers in various countries.
> > > > > > > Second, transnational corporations are the micro-foundation and leading force for deepening international division of labor
> > > > > > > The theory of industrial organization has long revealed that socialized division of labor is the whole meaning of enterprises' superiority over ordinary manual production and family workshops. Early multinational companies extended the scope of this effective division of labor to the international community. Now, multinational companies operating globally have deepened the division of labor to all the links of value-added, thus providing a micro-foundation for the deepening of international division of labor.
> > > > > > > In the non-globalization environment, although the production of multinational companies is international because they cross national borders, or even international because they cross many countries, there is no inherent production correlation between the production processes of countries around the world because the products produced by these molecular companies in various overseas points are mainly supplied to the local market or sold back to their home countries. International division of labor only happens between final products, and international trade becomes the only way to realize international division of labor. However, under the background of globalization, when multinational companies enter the stage of regional integration, even global integration, the subsidiaries scattered overseas no longer operate independently or only contact with the parent company, but maintain a highly integrated relationship with the parent company and other molecular companies. According to the comparative advantages of different locations based on the density of factors, multinational companies have carried out more detailed professional division of labor between production activities and other functional activities. The service object of each overseas investment enterprise is no longer a scattered and independent overseas market, but the regional market and even the global market occupied by the whole multinational company system. As a result, the products, technologies and personnel in the transnational corporation system have a stronger degree of cross-border mobility among molecular companies all over the world, and the division of labor is closer. The production processes of all countries in the world have established organic internal relations through the activities of branches of transnational corporations, forming an entity part of the "world production system". Here, the meaning of production is not limited to the manufacturing process, but a generalized value-added process. In the manufacturing field, this value-added process includes all links from research and development, manufacturing, sales to after-sales service; In the field of service industry, the value-added process runs through all stages of service provision. For example, the production process of an insurance product includes background data processing and service, risk forecasting actuarial and product design, and post-sales. It is precisely because of this integrated production system that the core multinational companies or multinational monopoly giants have strengthened their control over the global industry or sector in a specific sector or industry, making the international division of labor transcend the boundaries between industries and countries and turn to the inside of enterprises and products.
> > > > > > > > In the eyes of multinational companies, the country ownership of branches all over the world is no longer important, what matters is the exact position of each branch in the global value chain of multinational companies. The global value chain is divided into three major links: one is the technical link, including research and development, creative design, improvement of production and processing technology and technical training; The second is the production link, including logistics procurement, motherboard production, system production, terminal processing, testing, quality control, packaging and inventory management; The third is marketing, including sales logistics, wholesale and retail, advertising and after-sales service. When the international division of labor is deepened into the division of labor among countries in the value-added process, the traditional so-called international gradient transfer of industrial structure has also evolved into the gradient transfer of value-added links. As far as value-added ability is concerned, the above three links show a U-shape from high to low and then to high. Therefore, the transfer from manufacturing to R&D and marketing is a significant symbol of the promotion of value-added ability and division of labor. In the production process, it can be divided into upstream production (motherboard and intermediate input production) and downstream production (terminal processing). The closer to the upstream production, the stronger its value-added ability because of its strong correlation with technical research. The production closer to the downstream has a weak correlation with technical research, which determines the limitation of value-added ability and the secondary and substitutability of its role and position in the multinational company system. This is also the reason why many host countries actively compete for R&D centers and regional headquarters of multinational corporations.
> > > > > > > > Third, the influence of multinational corporations in China on China's international division of labor
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> > > > > Multinational companies in China are influencing China's position in international division of labor through the adjustment of their business strategy and organizational strategy. Since the opening of foreign direct investment in China in 198s, multinational companies have mainly invested in China in two ways. One is entrusted processing, including: (1) processing with supplied materials (materials are provided free of charge by foreign head offices, and only entrusted processing; (2) Sample processing (obtaining samples from abroad and manufacturing the same goods in China); (3) Parts processing (foreign parts can be assembled in China and disassembled); (4) Compensation trade (providing Chinese machinery and equipment to be repaid with the products produced). The second is direct investment, the establishment of wholly-owned enterprises, joint ventures or cooperative enterprises. Compared with entrusted processing, direct investment has a longer-term strategic intention. Since the middle and late 199s, expanding the scale of direct investment in China and serializing product manufacturing are important components of multinational corporations' global operation. From manufacturing investment to the establishment of applied R&D institutions, from decentralized location to systematic layout, multinational corporations have continuously strengthened China's position in its global business strategy, and China has been incorporated into the international production system of multinational corporations consciously or unconsciously.
> > > > > > > This kind of integration certainly enables China to participate in the international division of labor in addition to the traditional international trade, and provides an opportunity for China to enter the world mainstream division of labor network serving the global market. However, because the abundant labor resources and low cost are the basic motivation for multinational companies to invest in China, the result that China is used as a production base of low value-added links in the internalized international division of labor system of multinational companies is obvious. Because labor-intensive production links are easily transferred internationally, easily affected by external demand constraints and low value-added ability, while the production scale of China's supply to the world has increased sharply, the prices of labor factors in China have not increased simultaneously. The so-called China's deflationary export theory just illustrates the relative decline of the real income level of China's labor force from a negative perspective.
> > > > > > > > If at the beginning of opening up, China's primary goal when introducing multinational companies was the capital brought by the latter and the export driven by the latter, then at this stage, our goal should be upgraded to the technological progress driven by the latter and the promotion of China's industrial structure by the latter. Compared with capital investment and export promotion, the contribution of multinational companies in technology transfer and development is not as good as I wish. One of the manifestations is that multinational companies will not sell patented technology for free because our country has sold the market, and even if China pays a high patent fee or technology transfer fee, it will not obtain first-class or cutting-edge technology; The second performance is that the localization R&D carried out by multinational companies in China is still controlled by their global operation and the strategic needs of global resource integration, and it is still a universal motivation to recruit domestic high-tech talents in China at a low price and engage in applied research.
> > > > > > > Therefore, in the nearly 2 years from the Seventh Five-Year Plan to the Tenth Five-Year Plan, although the investment of multinational companies has obviously promoted the development of these emerging industries in China, these industries have adopted a relatively high labor-intensive mode of production to a certain extent, characterized by the import and assembly of main components, which is still far from the advanced level in the world in technology. For example, China's automobile industry undertakes mostly low-value-added primary parts, such as general castings and machined parts, while high-tech parts, such as EFI system, ABS, airbags and other electromechanical integration products, need to be imported. China's computer industry does not have a self-developed operating system and central processing unit, and the manufacturers mainly assemble imported parts. On the other hand, transnational