Economist says change needed to spur growth
Print Edition
CHINA has unveiled a vision for the next stage of its economic ascent, moving from plain manufacturing to a world of prosperity from space, e-commerce, green energy, bioengineering and other sectors.
Faced with economic growth at its lowest level in decades and rising wages and resource costs that are eroding its appeal as a low-cost factory for the world, the State Council yesterday published its sweeping “Made in China 2025” plan.
Its plan is to promote advanced industry by that year and move the economy away from the low-value manufacturing model that has fueled its meteoric rise over the past quarter of a century.
Manufacturing has helped China “attain major nation status” yet compared to the world’s leading standards, China’s manufacturing sector “is big but not strong,” the 10-year plan said.
It highlighted manned spaceflight, high-speed railways, bioengineering, materials science, new and green energy, e-commerce, big data and mobile Internet as among the high-value industries in which China has had success or views as areas that merit intensive investment.
The plan issued goals for patent applications and research and development spending as a proportion of revenue at large companies, as well as targets for national broadband penetration and for reductions in water and energy consumption.
Miao Wei, China’s industry and information technology minister, said the realization of the plan means “by 2025 ... China will basically realize industrialization nearly equal to the manufacturing abilities of Germany and Japan at their early stages of industrialization.”
Li Beiguang, deputy head of the ministry’s planning division, said: “There are many criteria to judge whether a country is a manufacturing power or not, including industrial scale, optimized industrial structure, sound quality and efficiency and sustainable development, but the key lies in innovation.”
To promote manufacturing and national competitiveness, it is important to mobilize every conceivable element to stimulate innovation rather than simply support a single industry, said Li.
Chinese manufacturing accounts for about 20 percent of the world’s total, but it is “far from strong,” according to Li.
“China is being pressured from both sides,” a ministry official who preferred to remain anonymous said earlier this month.
“Advanced economies such as the United States, Germany and Japan have all formulated policies supporting further development of their own manufacturing. At the same time, emerging economies such as India and Brazil are also catching up with their own advantages.”
Of all the projects included in the “Made in China 2025” plan, intelligent manufacturing is crucial, according to Miao, who said the ministry was taking part in a three-year study on the topic.
“If China doesn’t change and follows the original economic development, growth would definitely have to fall,” Ding Yifan, an economist at the Development Research Center affiliated with the State Council, told Reuters.
Chinese Premier Li Keqiang has been among the most vocal proponents of upgrading China’s manufacturing sector and has pushed for the consolidation of state-owned enterprises to create more competitive companies capable of exporting advanced technology.
Li, who mentioned the “Made in China 2025” slogan during his annual work report in March, has also urged Internet companies to lower their prices and expand coverage as part of a broad push to improve the digital and transportation infrastructure.
The plan will be followed by another two plans in order to transform China into a leading manufacturing power by 2049, which marks the 100th anniversary of the founding of the People’s Republic of China.
Key tasks identified as priorities include fostering Chinese brands, enforcing green manufacturing, promoting breakthroughs in 10 key sectors, promoting service-oriented manufacturing and manufacturing-related service industries, and internationalizing manufacturing.
The 10 key sectors are new information technology, numerical control tools and robotics, aerospace equipment, ocean engineering equipment and high-tech ships, railway equipment, energy saving and new energy vehicles, power equipment, new materials, medicine and medical devices, and agricultural machinery.
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