Advancing new industrialization is expected to provide a solid foundation for high-quality economic growth, improve the resilience and safety of China's industrial and supply chains, and boost the country’s core competitiveness globally, experts and company executives said. They called for enhancing independent innovation capabilities and bolstering the in-depth integration of cutting-edge digital technologies with the real economy, given that upgrading traditional industries has been high on China’s development agenda. Their comments came as President Xi Jinping stressed the importance of high-quality development in promoting new industrialization to lay a strong material and technological foundation for Chinese modernization. He made the remarks in a recent instruction on pushing forward new industrialization.
At a national conference in Beijing, Premier Li Qiang pledged to intensify support for modern industries. China aims to become an advanced manufacturing powerhouse by 2035, backed by smart and green industrial production. This year the leadership has placed a heavy emphasis on its importance in helping the economy’s post-pandemic recovery and longer-term growth. The modernization drive has taken on a greater urgency amid U.S. efforts to limit China’s access to key technologies and a broader Western effort to diversify supply chains away from China.
Luo Zhongwei, Researcher at the Chinese Academy of Social Sciences’ Institute of Industrial Economics, said, “The key to advancing new industrialization is to accelerate the transformation and upgrading of traditional industries through the adoption of new-generation information technologies, including artificial intelligence, 5G, big data and the internet of things.” More efforts should be made to cultivate strategic emerging industries, such as biotechnology, new energy, new materials, high-end equipment manufacturing and green industry, and foster new growth drivers amid downward economic pressure, Luo said. China’s latest push to promote new industrialization and speed up the construction of a modern industrial system underpinned by the real economy will help make the country’s economy more resilient, strengthen its capacity to withstand external risks and shocks, and build the country into a manufacturing powerhouse.
Pan Helin, Co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University’s International Business School, said, “The purpose of pushing forward new industrialization is to ensure the long-term and sustained growth of the Chinese economy.” He emphasized the significance of developing the advanced manufacturing sector, which is playing an increasingly key role in bolstering technological innovation, safeguarding the stability of industrial and supply chains, and helping the country gain competitive advantages on the global stage. “It is very crucial to push the manufacturing sector toward higher-end, smarter and greener production,” he said. Pan suggested increasing investment in research and development (R&D) and tackling bottlenecks in core technologies such as basic materials, software, precision components, and integrated circuits, in order to reinforce the country’s indigenous innovation capabilities.
China’s industrial output grew by 4.5% in August from a year earlier after a 3.7% rise in July. The industrial output in integrated circuits and opto-electronic devices jumped 21.1% and 29.9% last month year-on-year, respectively. Li Dongsheng, Chairman of Chinese consumer electronics company TCL Technology Group Corp, said that China’s resolve to advance new industrialization sets the direction for the country’s high-tech manufacturing industry, which has become an important driver of its high-quality development. “The manufacturing sector serves as the foundation of the real economy. As key players for propelling technological innovation, enterprises should continue to unswervingly invest in high-tech manufacturing and expand their presence in the upstream industrial chains,” Li said.
China has maintained its position as the world’s largest manufacturing nation for 13 straight years, accounting for nearly 30% of global manufacturing output in 2022, according to the Ministry of Industry and Information Technology (MIIT).
Former Chongqing Mayor Huang Qifan said China should make better use of its free-trade zones (FTZs) to allow unfettered internet access and data flows beyond its borders to close the widening gap with the United States in the digital economy and break the tech blockade. The digital economy refers to the tech industry and sectors that depend on digital technologies. “We are being edged out as our tech giants have grown smaller in size and the U.S. and Europe enact new digital economy rules on data flow, storage and privacy and move to contain us,” Huang said. The combined market capitalization of China’s top 10 digital firms was only 17% of that of the top 10 American digital giants in 2022, down from 24% in 2019. Huang said China lagged behind in underlying technology, global market share and the international adoption of its rules on data management and privacy. But Beijing is now betting on its digital economy – valued at CNY50 trillion last year, with annual growth outpacing overall GDP growth over the past decade – to boost the economy.
Huang urged policymakers to look to free-trade zones as ideal testing grounds for reform. Free-trade zones can test reforms and models before nationwide implementation, since issues such as data ownership, transactions and cross-border flows are complex and may involve nationwide consequences if not properly handled,” he said. “Free-trade zones can and should blaze a new path.”
This overview is based on reports by the China Daily and the South China Morning Post.
