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Chinese Author: Foxconn’s Departure Greatly Impacts Henan Province

An article posted on Chinese social media portal QQ warned that Foxconn’s departure from China has caused big economic damage to Zhengzhou and Henan, its hosting city and province. Foxconn is headquartered in Taiwan.

Located in Zhengzhou, Henan Province, Foxconn is a major Original Equipment Manufacturer (OEM) for Apple phones. It is Henan’s largest export enterprise. Foxconn has been cutting back on production and exports since 2023. In 2023, Henan province’s phone export decreased by 14.5 percent to 57.61 million units. In the first quarter of 2024, it dropped to only 6.64 million, from the 16.88 million in the same period a year ago.

Foxconn is the backbone of Henan’s economy. In 2023, the import and export volume at the Zhengzhou economic zone, where Foxconn is located, was 407.3 billion yuan (US$ 56.13 billion), accounting for 74 percent of Zhengzhou’s imports and exports and 50.3 percent of Henan’s imports and exports. In the first quarter of this year, Foxconn’s imports and exports decreased by 44.1 percent, dragging down Henan’s foreign trade growth by 23.5 percent.

Since Foxconn came to Zhengzhou in 2010, over 200 upstream and downstream supporting enterprises have followed suit and settled in Henan. Henan’s electronic industry quickly scaled up, and the overall scale of Zhengzhou’s electronic industry grew 25 times. Take Zhengzhou Airport Economic Zone as an example. The GDP of Zhengzhou Airport Economic Zone was only 20.6 billion yuan in 2010. It reached 117.2 billion yuan by 2021. At its peak, Foxconn contributed up to 25% to Zhengzhou’s GDP.

Undoubtedly, Foxconn’s departure will have a major economic impact on Henan. A logic solution is to bring in alternative industries, such as the booming electric vehicle (EV). However, can the EV industry replace everything? With common sense, people know that, no matter how large the EV industry becomes or how promising its future is, it absolutely cannot replace the real estate industry and the mobile phone industry simultaneously.

Source: QQ, May 20, 2024