Xi Jinping has made a comeback! Taiwanese orders are flooding back to China; ASUS and Acer return to Made in China, and the US and Japan are tempted? Trump's tariffs were in vain, and the CCP's economy has successfully extended its life
The video discusses the recent phenomenon of Taiwanese and foreign businesses moving some computer production orders back to China for manufacturing, analyzing the real impact of China's mature supply chain and rising core component costs driven by AI on corporate relocation. The host points out that although electronics OEM profits have rebounded and industrial profits have grown, weak domestic demand, declining real estate investment, high social security taxes, and the actual plight of workers have not truly improved, meaning the so-called comprehensive economic recovery of China does not exist.
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Today there is very shocking news: Taiwanese and foreign businesses are going back to China to set up factories. Is the economy of the Chinese Communist Party reviving? Does Xi Jinping have another political achievement for a fourth term? Recently, America's HP, Taiwan's ASUS, Acer, and others have actually been rumored to move some of their computer production orders, which were originally shifted to Thailand and Vietnam, back to the People's Republic of China, and even Dell is considering it. Wasn't it said a few years ago that the United States forced enterprises to leave China through tariffs? Forcing the Chinese economy to go backward? How come after moving out for a few years, they are moving back now? This news is 100% true. Many Little Pinks in China are so happy, saying what? American imperialism ultimately cannot leave behind Made in China after all, and Southeast Asia simply cannot replace China.
What's even more ridiculous is that there are comments in the comment section showing off workers tightening screws in twelve-hour two-shift rotations, resting two or three days a month? Ha, is this anything worth showing off? Didn't you claim the working class are the masters of the country? Now people are more willing than ever to work overtime for bosses; weren't you supposed to overthrow capitalists every day, and now you want capitalists back? Of course, this time we can't just laugh at them, because the partial return of orders is 100% real, and official data released by the Chinese Communist Party shows that the profits of electronic equipment-related manufacturing industries in the first three quarters of this year—meaning profits after deducting costs—increased by how much compared to the same period last year? Double, over one hundred percent! So the conclusion is, is the Chinese economy really going to make a comeback? Does China really have more strength to wear Taiwan down? Then there is a very strange question: wages in Vietnam and Thailand are clearly lower than in China, so why are computer brands running toward China instead?
According to a Japanese research organization, what is the average basic monthly salary paid by Japanese enterprises to their workers in these three countries? China is roughly equivalent to 19,000 New Taiwan Dollars, while Vietnam is around 9,000-plus New Taiwan Dollars, almost double. Of course, this excludes overtime and so on, just talking about the most basic salary. So supposing you are a foreign business boss and you want to produce one million computers, would you choose China, where wages are more expensive, or Vietnam, where they are cheaper?
Normal people would definitely choose Vietnam, and factoring in US tariffs, right? Now imagine again, today you went to another county or city to rent a place, opening a fried chicken shop in a place where work and living expenses are quite cheap, but you find out the chicken has to be shipped from another county, the paper bags also have to be ordered across counties, the machine for frying chicken breaks down, nobody nearby knows how to repair it, and within a hundred miles nobody will come to fix it—it has to be dispatched from an offshore island. In the end, all the remaining salary is spent on shipping fees, waiting for goods, and downtime. Converted this way, is it really cheaper?
That is where China's advantage lies. Over the past decade or so, after Taiwanese, Hong Kong, and various international enterprises—especially after joining the World Trade Organization—China established, thanks to these funds, industrial chain support, and foreign business backing, a massive supply chain of parts, molds, assembly, and logistics. If a laptop is missing a part, you can probably buy it at a nearby shop, maybe just walking a few streets away. Although Vietnamese workers have lower wages, some parts still have to be imported from China.
Japanese research also found that about 70 percent of parts and raw materials are sourced in China. If you are in Vietnam, you can only source 40 percent, so the remaining gap still has to be imported from China. Of course, this isn't specifically calculating laptops; it is data for overall manufacturing, but the gap is quite obvious. As a result of the original intention to move away from China, after the factories moved away, the parts still had to be shipped back from and bought from China. People moved out, but the refrigerator was still left at the former roommate's place, and you still get charged rent just to go back and get some food. But what is the real reason forcing these brands back to China?
It is the AI development happening worldwide, as global technology scrambles to build data centers, substrates, storage equipment, cloud servers, and the like. Wouldn't ordinary laptops suffer as a result? According to TrendForce, it estimated that in early 2025, processors, substrate computing, and other laptop materials accounted for 45 percent of costs. By the third quarter of this year, it unexpectedly approached 70 percent. As a computer brand boss, most of your material costs are spent just on these core parts, and you still have to bear labor expenses like transportation and management costs. You have no choice but to find a production location that saves even more money, and at this moment, doesn't China's mature industrial chain become attractive again?
Moreover, Taiwan's Quanta, Foxconn, and other contract manufacturers are currently investing more resources into AI servers and AI-related production, which means industrial upgrading and transformation. What are these Chinese enterprises and some of the returning factories trying to do? They are taking on the traditional computer orders that we previously abandoned; some are even willing to waive engineering mold fees just to win back international clients first: "Hurry back, I'll continue contract manufacturing on my end." This is the part I find most interesting. It's not that Chinese workers suddenly became cheaper again, but that AI made parts expensive, forcing computer brands to recalculate. Chinese operators have supply chain advantages, as well as low-price involution advantages to grab orders, right? But if you can make money relying on mass production, that's skill. However, trust me, you guys will definitely still keep cutting prices and eventually plunge into involution; it's only a matter of time.
What about US tariffs? Of course, they are also within their consideration range, except that tariff exemptions vary for different products. Enterprises calculate the total sum after everything is added up: which is more cost-effective—China, Vietnam, or Thailand? In the end, they concluded that China is still the most cost-effective. Of course, this does not mean that all industries are returning; currently, it looks like electronics, especially computer brands, are returning. Next, did China really make money from this and stimulate the Chinese economy? The National Bureau of Statistics of the CCP published data showing that in the first three quarters of this year (spring, summer, and autumn), the profits of industrial enterprises above designated size increased by 15.5 percent year-on-year. Among them, the profit of computer and other electronic equipment increased by 103.8 percent year-on-year. Let me admit first: this is an increase in pre-tax net profit, not just an expansion of turnover; the manufacturing sector in this part of China indeed earned more than last year. We cannot say that they are all losing money, but here is the key point: the electronics category is very broad, including AI, memory, and electronic components. It doesn't mean that because these traditional assembly computers doubled their profits, the whole of China doubled its profits. No.
During the same period, China's automobile manufacturing profits actually dropped by more than 20 percent. The steel industry dropped by more than 70 percent, and the coal mining and hydropower industries also dropped significantly. These are all factories in China, yet their situations are vastly different. Take Longcheer Technology, a named Chinese contract manufacturing enterprise: their revenue for the first three quarters reached as high as 32.6 billion RMB, but as you know, after deducting taxes and other miscellaneous items, their net profit was left with only 420 million, which is 16 percent less than last year. However, their third-quarter profit rebounded, increasing by 17 percent year-on-year. So you see, this is the fun part: some products make money while others do not. Therefore, you cannot simply look at surface numbers and a few orders to conclude that China is once again experiencing a great rejuvenation and winning.
Well, now let's answer the real question: has China's economy really warmed up? Let's not look at those factory financial reports; let's look at the CCP's own retail figures. Published by your own government, China's total retail sales of consumer goods growth—meaning domestic demand, the growth of domestic demand in this country—slowed down to only 1.1 percent growth year-on-year. It's not that there is no growth, but that the growth rate has slowed down. At the same time, your real estate investment dropped by 26 percent. So that's interesting. Are these returning items actual orders, or have foreign capitals truly been uprooted and returned? If they have been uprooted and returned, why haven't your real estate investments been replenished? What about the fiscal revenue of various provinces? What about land lease taxes?
Wait a second, wasn't it said that China's electronics industry is making a fortune? Didn't factory profits grow by 15.5%? Why is the growth rate so slow when it comes to the Chinese people going out to shop and consume? This news actually reminds us not to underestimate the competitiveness accumulated from the involution in this industry over the past ten or twenty years in China. If someone further argues that because orders for companies like HP and ASUS have returned, the Chinese real estate crisis is solved, and they will come back to build factories—No, they won't. They might just be restoring existing factories or outsourcing to Chinese contract manufacturers who were already producing there. Why? Because the fiscal pressure on Chinese local governments hasn't been resolved; you still lack tax revenue, can't find money, and are spending more than you earn. If they really came back to build factories, wouldn't your fiscal revenue and land leasing income increase significantly? It hasn't; it has decreased sharply. And if they really returned to build factories, would we see the prosperity of the past ten or twenty years? An industrial park here, an industrial park there, and these parks driving the development of the surrounding neighborhoods and towns. Wow, lots of food streets, snack shops, clothing stores, and people shopping everywhere. But is that happening now? Haven't manufacturers in Suzhou and other places, as well as foreign businesses, fled? Haven't they turned into ghost towns and abandoned cities? Yes, so you need to think carefully: did this news give you a stimulant or a sedative?
It is interesting that some people saw China's prices rise by 0.9% this September and said, "Hey, we've survived deflation, and everyone is starting to spend money lavishly." A price increase doesn't mean it's caused by strong domestic demand; it could also be that your necessities have become more expensive. Okay, why have necessities become more expensive? This year's US-Iran conflict pushed up global oil prices, and oil prices pushed up many derivative costs, right? Your country's National Development and Reform Commission admitted that oil prices alone pushed up your overall monthly price level by 0.47 percentage points. Since your overall increase was 0.9%, gasoline and its derivatives accounted for half of the cost. So, if you spent 300 yuan on a tank of gas last year and 350 yuan this year, are you spending more money? Yes. But is this because of economic and consumption stimulus? No. Will these costs be passed on to other areas? Yes, you are just paying more for gas. Of course, other goods and services have also risen in price, but this doesn't mean your domestic demand is strong, that people are more willing to invest, and that the Chinese economy is warming up. No, I believe you all have a clear physical sense that the economy is not warming up; it is getting colder and colder, deeper into winter. And price competition is becoming increasingly cutthroat.
This wave of electronics and computer order returns is, of course, a benefit for some Chinese manufacturers. If factories have business, parts suppliers and logistics companies will also benefit. And your government's tax revenue and social security contributions will also increase. The social security system in the CCP's China is terrifying. On October 1st, as you have seen in the last day or two, it is mandatory to pay based on your salary bracket. You cannot use the minimum; if you do, you and your employer will be fined one to three times the amount. Do you know that although China's electronics industry has grown a lot, after deducting corporate taxes and social security, the remaining profit is 4.26%? It seems like a bit of a metaphor, but that's not what I meant. Are you celebrating that China's manufacturing is strong, or that Chinese people are good at working overtime for the Party? Anyway, a huge portion of corporate taxes and social security is eventually siphoned off by the CCP, do you know that?
For example, a worker in Shanghai earns 10,000 yuan a month. Regardless of overtime, anyway, they only get about 8,100 yuan in hand, while the company's total expenditure is 13,320 yuan. So how much money does the CCP take from the corporate capitalists and you, the employee? How much? Over 5,200 yuan. You create 10,000 in value, the company has to bear 13,000, and the CCP takes 5,200—it's ridiculous! And nearly 40% of your income from working is taken by the CCP to support the pensions of current "family members of the system," as well as the military, police, teachers, and farmers. Farmers only get one or two hundred yuan a month. But those "family members of the system" and the military/police/teachers, how much of the pension fund do they occupy? 36%.
But don't forget, producing a million computers in Vietnam and moving it to China doesn't mean the world suddenly has a million more computers; they are just the same orders produced in a different place. This tech company estimated that out of every 100 computers globally, only 74 were produced in China last year, increasing to 79 this year. So, have you noticed? It only increased by three. But everything else is falling, so it's not like foreign capital ran away and now it's all back. China was already the world's most important laptop production base; it's just that some capacity has been reconcentrated. And for many companies, they are foreign-funded, so the money is still earned by them, right? You are just getting the cookie crumbs.
This serves as a reminder for Taiwan as well; it is not about watching who wins or loses. China possesses these mature manufacturing industrial systems, while we in Taiwan have semiconductors, AI servers, and other industries undergoing transformation, and we continue to upgrade. We are not competing with them to see who can drive unit prices lower to snatch orders from these clients. Ultimately, returning to those who boast at the beginning, saying, 'Hey, our workers, oh my, can work twelve hours straight, two shifts, three shifts, six shifts, I can work forty-eight hours straight.' OK, if the pride and victory of your 'world's factory' is just more orders and busier factories, without making life better for the laborers, then may I ask who you are celebrating for?
Of course, the growth in industrial profits is real, that is correct. But the pressure on China's domestic demand is also real. Rather than announcing on the internet who has won again, I am more interested in knowing whether those who manufacture computers for the world and for us every day, after working hard for half a year or a year, can have more time to spend with their families? Can they live better than they did last year? Or is every year's 'last year' the best year?