Recently, the IPO of Foxconn Industrial Internet Co., Ltd. in China has experienced a lightning strike. From the submission of prospectuses to the final meeting, Foxconn spent only 36 days (20 working days), creating a new record for A-share IPOs. This is the 'Speed of Light IPO'. Undoubtedly, the recent mainland regulators reported the opening of a 'green channel' for new economy companies. Foxconn’s own excellent performance and multi-factor resonance of 'one family' and two pro-institutional advantages have contributed to Foxconn's efforts. 'Speed of Light IPO' is expected to be the largest technology company in the A-stock market. However, I believe that Foxconn’s “Speed of Light” IPO not only reflects the high attraction of mainland capital markets for Taiwan-funded enterprises, but also reflects the current international and cross-strait Under the background of profound and complex changes in the political and economic structure, the traditional economic cooperation model between the two sides of the strait has stepped into a new phase of deep changes. As the mainland enters a period of high-quality economic development, the economic power of the two sides of the strait has been steadily expanding and the mainland has continuously strengthened cross-strait economic and social integration. Affected by such factors, the economic cooperation between the two sides of the Taiwan Strait is undergoing a 'quiet revolution' that will affect the future cross-strait economic and trade relations and even the two sides of the Taiwan Strait. Department of far-reaching impact.
The Model of Growth under the Pattern of Cross-Strait Traditional Economic Cooperation
Today we talked about Foxconn. We all know that it is a world-renowned electronic product foundry company. Its founder, Mr. Gou, is an outstanding Chinese entrepreneur. But if we call back the clock 40 years ago, then Foxconn’s parent company, Hon Hai Precision The group is only a small and medium-sized small and medium-sized enterprise in Taiwan Island. In 1988, Hon Hai Precision Group began to invest in Foxconn in Shenzhen, where it produced 3C products. Since then, Foxconn has entered the fast-track development and has become a pole in the mainland. The internationally-represented 'kingdom of foundry' is the so-called 'Thirty Years of Hedong in Hexi for 30 Years'. The key to the Foxconn Group's recent past is that it seized the opportunity of reform and opening up in the mainland and became a company under the cross-strait economic cooperation model. A model of growth. Since entering the mainland market, Foxconn has taken over OEM production orders for major IT companies around the world as its main business, and it has played a good role in the long-term export advantages of Taiwanese companies. More importantly, Foxconn has made full use of cheap mainland land. , Advantages such as abundance of low-cost labor force, to give full play to the advantages of OEM, and to achieve maximum cost control and production efficiency The organic combination of maximizing promotion. From the perspective of economics, in the past, the cross-strait economic cooperation model was mainly based on the mainland’s cheap and abundant land, labor, and other advantageous elements. Taiwanese businessmen used the mainland as a processing export base to form Japan. Imported-Taiwan orders - Mainland production - Export Europe and America's four-corner industry division of labor model. Foxconn is the leading Taiwanese company in the mainland. Its huge industrial parks built in various parts of the mainland, more than a million of labor demand and put into production brought local foreign trade. The huge promotion effect can be described as the truest portrayal of the development and growth of Taiwanese enterprises under the cross-strait traditional economic cooperation model.
The International and Cross-Strait Political and Economic Environment Behind Foxconn's IPO Market
In recent years, Taiwanese companies represented by Foxconn have faced 'growing troubles' while growing rapidly. Especially since the international financial crisis, the global, especially mainland, economic environment has entered a period of profound changes, coupled with the ups and downs of cross-strait relations. Objectively, it poses a severe challenge to the traditional cross-strait economic cooperation model on which mainland Taiwanese enterprises rely.
On the one hand, after the international financial crisis, the world economy has experienced a difficult recovery, and the economic situation has been complex and volatile. In particular, the economic downturn in Europe and the United States and trade protectionism have remarkably increased. This has adversely affected Taiwan companies that have long been engaged in processing exports. And Europe and the United States are trying to revitalize the manufacturing industry. It also exerted great pressure on Taiwanese companies that had previously worked in the mainland, prompting Taiwanese companies such as Foxconn to go to the United States to increase investment in manufacturing. On the other hand, the demographic dividend in the mainland has disappeared in recent years, and labor costs, land and other production costs have risen rapidly. Foxconn Taiwan and other enterprises have no time to attract hundreds of thousands of laborers. In addition, Southeast Asia and South Asia, such as Vietnam and India, still maintain their advantages in terms of labor and land costs, and objectively make mainland Taiwanese companies face high-end manufacturing in Europe and America. The "double attack" produced by low-end manufacturers such as Vietnam. This has caused mainland Taiwanese companies to be in a dilemma of dilemma. They have chosen to travel to lower-cost regions such as Vietnam but will face problems such as dissatisfaction with various types of soil and water, while staying on the mainland will face problems such as rising costs. , It must be transformed and upgraded, but transformation and upgrading are not easy. At the same time, the mainland’s economy has developed rapidly in recent years. As enterprises began to rise, their competitiveness increased, while the island economy slackened, and the impact on Taiwan companies was also increasing.
Objectively speaking, the domestic and foreign political and economic environment faced by mainland Taiwan enterprises represented by Foxconn in the past few years is not entirely a challenge. In fact, the rapid development of the mainland economy and the transformation process have also provided unprecedented opportunities for the development of Taiwanese companies. The growing domestic demand market will soon surpass the United States as the world's largest consumer market. At the same time, the mainland will start a new round of reform and opening up and promote the 'Belt and Road' initiative to a considerable degree in enhancing its international political and economic influence. In addition, the mainland is in the field of artificial intelligence, the cloud The rapid development of new economy such as calculation also creates a new blue ocean for the transformation and development of Taiwanese enterprises.
The new trend of cross-strait economic integration after the listing of Foxconn
First, the new economic cooperation between the two sides of the strait is expected to accelerate further. In recent years, the mainland's new economy has flourished and become an important force in leading the development of the new global economy. Leading Taiwan companies such as Foxconn are cultivating AI talent, IOT industrial field applications, big data, financial technology, and other fields. The active layout has already begun to show results. The Foxconn Industrial Internet's listing on the A-shares is another major breakthrough for Foxconn to fully embrace the new economic development. According to the prospectus, Foxconn will mainly raise funds for the construction of industrial Internet platforms, cloud computing and other applications. In the future, leading enterprises on both sides of the Strait are expected to accelerate cooperation in the new economic field. The mainland will become the new home for new economic cooperation between the two sides of the strait.
Secondly, more Taiwanese companies will be deeply integrated into markets such as domestic demand and capital in mainland China. In the past, Taiwanese companies mainly used the mainland as a production and processing base, and they had insufficient desire and capacity to enter the domestic market in mainland China. With the expansion of the domestic market in mainland China, more and more Taiwanese companies will increasingly focus on expanding the mainland market. The mainland and the European and American markets are expected to go hand in hand to become the 'two wheels' for the advancement and development of Taiwanese enterprises. In addition to the domestic market, whether it is the higher price-earnings ratio in the short-term mainland capital market or the long-term capital market development prospects, This contrasts sharply with the capital market that is like a 'backwater' in the island. In the foreseeable future, more Taiwanese companies will embrace the mainland capital market and become a force for the development of the capital market in the mainland.
Thirdly, cutting into the mainland-dominated industrial chain will become a realistic choice for more Taiwanese companies. At present, mainland Taiwan companies such as Foxconn are mostly centered on European and American industrial chains and play a certain role in the Asia-Pacific network of labor divisions they have built, such as Apple’s supply. Chain, Tesla supply chain, etc. With the rapid rise in the status of the mainland in the global industrial chain and value chain, especially with the implementation of the mainland China’s “Made in China 2025” strategy, the international supply chain led by mainland companies will be global The supply chain system will play a more important role. Passive or active participation and integration into the mainland supply chain will become the best choice for Taiwanese companies.
In addition, cross-strait industrial cooperation is also expected to become a new driving force for cross-strait economic cooperation. Foxconn, as a manufacturing enterprise with strong international competitiveness, is an important role model for the mainland to promote the economy's 'from imaginary to practical' and to promote the spirit of craftsmanship. Promoting the industrial Internet and integrating the transformation direction of the new economic development also meets the current new needs of the mainland to promote economic upgrading. In the foreseeable future, the cooperation between the two sides of the Taiwan Strait, led by Foxconn, will become a high-quality development stage for the mainland economy. The new highlights of the transformation and upgrading of cross-strait economic cooperation.