As China works to fully modernize, advancing new industrialization and accelerating the construction of a strong manufacturing industry have become key priorities. The world is experiencing rapid and unprecedented changes. Global supply chains are being restructured at an accelerated pace, and the global economic landscape is undergoing significant shifts. Against this backdrop, China faces new challenges in its push for new industrialization. The latest technological and industrial revolutions are being led by artificial intelligence (AI), which is intersecting with fields like quantum technology and life sciences, leading to breakthroughs on multiple fronts. The race for global tech leadership is intensifying, reshaping the competitive ranking of nations and the global competitive landscape. Competition among major powers for dominance in cutting-edge technology is growing fiercer. The United States is building “small yards with high walls” by expanding its control on high-tech exports to China, and in some cases, cutting off technological cooperation with China. Meanwhile, this new technological revolution is shifting from replacing physical labor, as previous revolutions did, to replacing intellectual labor and expanding human intelligence.
Developed nations are leveraging smart manufacturing to offset high labor costs and are strengthening their control over high-value segments of the industrial value chain, further solidifying their competitive edge. While AI is driving transformative changes in productivity, it also brings significant risks, making it urgent for major powers to collaborate in addressing the threats it poses, such as spreading disinformation, infringing on personal rights, creating security vulnerabilities, and deepening the intelligence gap. The world economy is slowly recovering, but growth remains sluggish. In the medium to long term, factors like aging populations, rising debt, income inequality, and slowing productivity growth will likely keep global economic growth subdued. As the world’s largest manufacturing hub, China faces significant challenges but also new opportunities. Thanks to its massive domestic market and active participation in global trade, China has become a key player in global production. The ongoing reorganization of global supply chains offers China the chance to leverage its complete industrial system and vast market size.
On the supply side, the country is moving from a low- to mid-end manufacturing base to a major player in high-end manufacturing and technological innovation. This shift, along with China’s rising position in the global value chain and increased openness to global markets, will strengthen its ability to integrate international production factors and control critical nodes in the supply chain. On the demand side, China’s capacity to absorb foreign goods and services continues to grow, making it the primary trading partner for over 140 countries and regions. China’s massive market is becoming increasingly important, with many economies around the world deepening their dependence on Chinese demand, leading to closer economic ties between China and the rest of the world.
However, China’s push for high-quality industrialization still faces challenges of unbalanced and insufficient development. The industrial system is large but not strong, comprehensive but lacking precision, with key core technologies still reliant on others. The industrial foundation remains weak, and there are gaps in the supply and industrial chains. It is essential to overcome key core technological barriers, strengthen industrial capabilities, promote deep integration between the real and the digital economy, and enhance the resilience and security of supply and industrial chains. Advancing new industrialization also demands strengthening the industrial foundation. In recent years, China has made significant progress in closing the technological gap with global leaders in areas such as nuclear power, hydropower turbines, high-speed rail, construction machinery, and telecommunication equipment, gradually building international competitiveness. It is critical to rebuild the industrial foundation in key areas related to industrial security so as to achieve self-reliance and improve the quality and competitiveness of essential components, materials, and software.
Looking ahead, China is moving toward achieving its goal during the 15th Five Year Plan (2026-30) period. It is important to promote China’s industrial growth from being primarily factor-driven to innovation-driven, and drive breakthroughs in the quality of new industrialization, Wang Yiming, Vice Chairman of the China Center for International Economic Exchanges writes in the China Daily.
