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China seeks next leap in manufacturing
BEIJING, Dec. 19, 2019 (BSS/Xinhua) — Guangzhou, capital of south China’s
Guangdong Province and a manufacturing hub, has recently approved a three-
year action plan to elevate its manufacturing industry to the next level.
With both its past and present dependent on labor-intensive industries such
as apparel and toys, the city in recent years quickened its pace to move up
the industrial chain and by 2021, it aims to increase the value added of
high-end manufacturing to more than 300 billion yuan (about 42.9 billion U.S.
dollars).
The plan also called for the creation of two world-class manufacturing
clusters in autos and ultra-high definition videos, as well as four other
national clusters in industries including new materials and high-end
equipment.
The city’s manufacturing shift is emblematic of the broader trend in China
as the “world’s workshop” built upon low labor and production costs is taking
on new forms.
Apart from the traditional “Made in China” tags found on store shelves,
high-speed trains and semi-conductors are becoming the new symbols of Chinese
manufacturing.
Across the nation, provinces including Sichuan, Shandong, Zhejiang and
Jiangsu have invested huge amounts to push high-quality development of the
manufacturing industry.
Over the past year, as overall manufacturing investment was losing steam,
investment in high-tech manufacturing showed resilience.
Data from the National Bureau of Statistics showed investment in high-tech
manufacturing surged 14.8 percent year on year in the first 11 months of the
year, far outpacing the sector’s average growth of 2.5 percent.
At the Central Economic Work Conference earlier this month, top
policymakers promised to step up the upgrading of equipment to optimize
traditional manufacturing and increase long-term financing support for the
sector.
China will work to build a number of advanced manufacturing clusters with
international competitiveness, said a statement released after the key
economic meeting, which charted the course for economic work in 2020.
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The meeting also called for promoting industrial and consumption upgrading,
fully tapping into the advantages of China’s considerable market, and giving
play to the underpinning role of consumption and the pivotal role of
investment.
The emphasis on concerted monetary, fiscal and regional support for
advanced manufacturing highlighted the industry’s key role in China’s
economic transformation, according to a research report by Shenwan Hongyuan
Securities.
Investment in high-tech manufacturing will not only help prop up investment
demand in the short term, but also spur technological progress at the supply
end in the long run, noted the report.
Wang Yiming, deputy director of the Development Research Center of the
State Council, said the meeting sends a signal that more investment will flow
to areas such as high-end manufacturing that could stimulate upgrading at
both the supply and demand ends to achieve a dynamic balance.
In addition to rising investment, the Chinese government has launched
across-the-board tax cuts and fee reductions to enable enterprises to focus
more on research and development, which is key to driving the upgrading of
China’s manufacturing.
Considering China’s existing advantages, the tremendous domestic market and
its wide adoption of frontier technologies, the country’s manufacturing
sector will be ready for another big leap forward, analysts say.
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