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By Ma Jiantang, DRC

2018-12-12

Manufacturing industry is the main part of the national economy, and also the foundation of a strong country. The quality of manufacturing industry is a concentrated reflection of a country’s comprehensive strength and core competitiveness. Since the 18th National Congress of the Communist Party of China (CPC), the CPC Central Committee with President Xi Jinping at the core has taken strengthening real economy and developing manufacturing continuously as the major strategic option for China, and has strived to promote China to move from being a big manufacturer to a strong manufacturer. In accordance with the overall requirements and strategic arrangements put forward by the 19th CPC National Congress, we need to actively respond to the “re-industrialization” strategy of other countries, accelerate the construction of a strong manufacturing country, and continuously improve the quality and efficiency of economic development.

1. The new trend of reconstructing competitive advantages.

After the outbreak of the international financial crisis in 2008, the promotion of “manufacturing return” and “re-industrialization” is one of the “crucial options” of developed countries and emerging economies to cope with the financial crisis, and also the key to enhancing their international competitiveness. The manufacturing industry has shown a step-by-step development trend on a global scale. After the international financial crisis, manufacturing industry has become the main battlefield of technological innovation, economic recovery and revitalization, and reconstruction of the international division of labor system. Developed countries regard “manufacturing return” as a strategic option to deal with the crisis. After the international financial crisis, profound changes have occurred in the manufacturing industry while the world economy has been undergoing deep adjustments. A new round of technological revolution and industrial transformation prominently featured by accelerated innovation and penetration of information network technology has emerged on a global scale, and the digital economy has become an important driving force for global economic growth.

2. Moving from being a big manufacturer to a strong manufacturer.

In the wave of “return of manufacturing industry” all over the world, the “backflow” of high-end manufacturing in developed countries coincides with the “inflow” of low-end manufacturing in low- and middle-income countries, which causes a “two-way squeeze” on China. At the same time, the game of high-end manufacturing in international trade is being played out more fiercely. China’s manufacturing industry is at an important historical time in development, with both big challenges and great opportunities. The sustained and rapid development of manufacturing industry has been the key to China’s great achievements since the reform and opening up 40 years ago. China’s industrialization process is a miracle in the world. Since the reform and opening up 40 years ago, the manufacturing industry has been developing rapidly and China has become the largest industrial and manufacturing country in the world. The manufacturing game in international trade poses a real challenge to China. In the world of competition, trade is the surface while manufacturing is the basis. The core technology of manufacturing industry is a country’s important instrument, which must rely on independent innovation. Only by holding the key technologies in our own hands can we realize the transformation from a big to a strong country.

3. Revitalizing the real economy to lay a solid foundation.

President Xi Jinping has pointed out that the real economy is the foundation of a country’s economy and source of wealth, and an important pillar of a strong and prosperous country. We need to take a broad view of the world based on China’s situation from the strategic level of building a modernized economic system, vigorously develop the real economy, and lay a solid foundation for building a modern economic system. We need to seize the historic opportunity presented by the new round of technological revolution and industrial transformation in the world and China’s transformation in the development, and push China’s manufacturing industry to move towards the middle- and high-end of the value chain. China needs to learn from the historical experience and lessons of the manufacturing evolution in developed countries, especially of their “de-industrialization”, and further consolidate the pillar position of manufacturing industry in its national economy. China needs to promote the accumulation of resources to the real economy, and give better play to the supporting role of financial industry and producer services in advanced manufacturing. We need to properly handle the relationship between industrial capital and financial capital in accordance with the requirements put forward at the 19th CPC National Congress to expedite the construction of an industrial system with coordinated development of real economy, scientific and technological innovation, modern finance and human resources. We need to effectively expand the access of small and medium-sized banks to the market, increase the proportion of direct financing, make the financial sector open wider, expand financing channels for small and medium-sized enterprises, and smooth the “l(fā)ast mile” between capital and enterprises. We need to guide private capital to invest in high-tech manufacturing industry, increase manufacturing efficiency with higher financial efficiency, enhance the enterprises’ international competitiveness, and accelerate the transition of China from a big manufacturer to a strong manufacturer.