China is at least thirty years away from the ‘great power’ of industry: a former minister

BEIJING (Reuters) – China is at least 30 years away from becoming a manufacturing country with “great power,” a former industry minister said Sunday, despite having the world’s most complete industrial supply chains.

In recent years, China has become the largest manufacturing country in the world, accounting for more than a third of global production, driven by domestic demand to produce everything from motor vehicles to industrial machinery. But the industry’s heavy reliance on US high-tech products such as semiconductors was a strategic weakness.

“Basic capabilities are still weak, core technologies are in the hands of others, and the risk of being ‘punched in the throat’ and having ‘a bicycle chain slipped’ has increased significantly,” said Miao Wei, Minister of Industry and Information Technology. for a decade before stepping down last year.

As the Chinese economy moves towards a service-based model and polluting smoke chimney factories are mothballed, production output as a share of the economy has declined. In 2020, industry accounted for just over a quarter of the gross domestic product, the lowest since 2012.

“The ratio of output to GDP has fallen too early and too quickly, affecting not only economic growth and employment, but also creating gaps in the security of our industries and our economy’s ability to withstand risk, and its global competitiveness is diminishing. ”said Miao, now a member of the Chinese People’s Political Consultative Conference (CPPCC), the government’s highest advisory body.

President Xi Jinping said in November that innovation in manufacturing is far from being sufficient and that companies need to address “bottleneck” technologies to become fully innovative.

“China’s manufacturing industry has made great achievements in recent years, but the situation of ‘big but not strong’ and ‘comprehensive but not good’ has not fundamentally changed,” Miao said in a speech to CPPCC delegates in the Great Hall of the United States. people in Beijing.

There are many problems hindering the high-quality development of Chinese manufacturing, but the most fundamental are insufficient market-oriented reforms, Miao said.

While the tax burden on businesses remains high and financial support to the manufacturing sector urgently needs to be strengthened, a shortage of innovative and high-tech talent has also significantly hampered the development of the sector, Miao added.

“We must maintain our strategic determination, remain clear and understand the gaps and shortcomings.”