Manufacturing still back­bone of the econ­omy

5

China Daily (Canada) - - LIFE -

Noth­ing demon­strates the strik­ing power shift be­tween China and the United King­dom more than the planned in­vest­ment by China into a high-speed rail­way and nu­clear power sta­tion in the UK, deals clinched dur­ing Pres­i­dent Xi Jin­ping’s re­cent state visit.

While the UK’s in­dus­trial ad­van­tages have de­clined, China’s have grown. Branded the “world’s fac­tory”, China is the only coun­try that boasts all the in­dus­trial cat­e­gories as clas­si­fied by theUnit­edNa­tions. Aside from ad­van­tages in tra­di­tional la­bor-in­ten­sive manufacturing and con­sumer goods, China has also gained an up­per hand in equip­ment manufacturing, in which its out­put now ac­counts for one-third of the world’s to­tal, 2.5 times that of Ger­many, which ranks sec­ond. All this has laid a solid foundation for China’s as­cen­sion to be­come the world’s sec­ond-largest econ­omy.

How­ever, there are also pres­sures threat­en­ing China’s role as “world’s work­shop”. Such pres­sures are not just from pure eco­nomic fac­tors such as soar­ing la­bor costs, but also from the fact that the mar­ket value of do­mes­tic elec­tron­ics gi­ants with nu­mer­ous patents and an­nual prof­its of bil­lions of yuan is lower than that of some loss-suf­fer­ing en­ter­prises whose mar­ket value is only based on spec­u­la­tive con­cepts.

Such con­cerns are ag­gra­vated by the fact that a num­ber of do­mes­tic man­u­fac­tures have shifted their busi­ness to real es­tate and cap­i­tal op­er­a­tions and there is de­clin­ing en­thu­si­asm among univer­sity stu­dents to study sci­ence and tech­nol­ogy ma­jors.

How­ever, manufacturing is the coun­try’s eco­nomic back­bone and more im­por­tance should be paid to con­sol­i­dat­ing it as the foundation of the do­mes­tic manufacturing sec­tor.

It should be noted that a big coun­try’s sus­tain­able eco­nomic de­vel­op­ment can only be built on in­dus­tri­al­iza­tion, be­cause the mod­ern ser­vice sec­tor, which pro­vides the ma­jor­ity of peo­ple with de­cent in­comes and em­ploy­ment op­por­tu­ni­ties, is also built on the foundation of mod­ern manufacturing. This is true

Re­view of 5-year plan

not only for de­vel­op­ing coun­tries but also de­vel­oped coun­tries and economies.

If China’s aim in the past was how to eco­nom­i­cally catch up with and sur­pass de­vel­oped coun­tries, then its cur­rent aim should be how to pre­vent it­self from be­ing over­taken.

Is China’s manufacturing sec­tor able and de­ter­mined to pur­sue fur­ther de­vel­op­ment and pre­vent it­self from be­ing over­taken by its coun­ter­parts in the rest of the world? The an­swer is yes. A se­ries of emerg­ing trends, from in­ten­si­fied ef­forts to try new busi­ness mod­els and open new mar­kets by some do­mes­tic man­u­fac­tur­ers to the ex­plo­ration of the “In­ter­net plus” model, show the fore­sight and adapt­abil­ity of do­mes­tic pro­duc­ers. In 2014 alone, a to­tal of 53,140 sci­en­tific and tech­no­log­i­cal fruits were reg­is­tered in China and ap­pli­ca­tions were filed for more than 1.3 mil­lion patents. Mean­while, China’s R&D in­put was 2.09 per­cent of its gross do­mes­tic prod­uct that year. The pro­por­tion was even higher among such manufacturing gi­ants as TCL.

What China now lacks is not ex­cel­lent and hard­work­ing tech­ni­cians and sci­en­tists, nor en­trepreneurs with a strong mar­ket vi­sion and the courage to with­stand pres­sure, nor en­thu­si­as­tic in­vestors and cap­i­tal. What it lacks is eq­ui­table eval­u­a­tion of its man­u­fac­tur­ers and pos­i­tive in­cen­tives.

It is hoped that the 13th Five-Year Plan (2016-20) can give the do­mes­tic manufacturing sec­tor a de­served sta­tus and the cap­i­tal mar­ket rea­son­ably eval­u­ates en­ter­prises.

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