BEIJING (Reuters) – China is at least 30 years away from becoming a “great power” manufacturing nation, a former industry minister said on Sunday, despite having the world’s most comprehensive industrial supply chains.
In recent years, China has become the world’s leading manufacturing nation, accounting for more than a third of global production, driven by domestic demand to produce everything from motor vehicles to industrial machinery. But its industries’ heavy reliance on American 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 ‘getting hit in the throat’ and having ‘a slipped bicycle chain’ has increased significantly,” said Miao Wei, former Minister of Industry. and Information Technology for a decade before resigning last year.
As the Chinese economy shifts to a service-based model and polluting chimney factories are suspended, manufacturing output as part of the economy has declined. In 2020, manufacturing accounted for just over a quarter of gross domestic product, the lowest since 2012.
“The ratio of manufacturing production to GDP has declined too soon and too fast, which not only weighs on economic growth and affects employment, but also creates security gaps in our industries and diminishes the ability of our economy to resist risks and their global competitiveness, ”said Miao, now a member of the Chinese People’s Political Consultative Conference (CPPCC), the government’s main advisory body.
President Xi Jinping said in November that innovation in the manufacturing industry is far from adequate and that companies must address “bottleneck” technologies to become fully innovative.
“China’s manufacturing industry has made great achievements in recent years, but the situation of being ‘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 Beijing People.
There are many problems that restrict the development of high-quality Chinese manufacturing, but the most fundamental is insufficient market-oriented reforms, Miao said.
While the tax burden on companies remains heavy and financial support to the manufacturing sector needs to be urgently strengthened, the shortage of high-tech and innovative talent has also significantly limited the development of the sector, Miao added.
“We must maintain our strategic determination, keep our minds clear, and deeply understand the gaps and shortcomings.”
Reporting by Stella Qiu, Ryan Woo, Hallie Gu and Yingzhi Yang; Editing by Simon Cameron-Moore and Christopher Cushing