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 complete industrial supply chains.
In recent years, China has become the world’s largest manufacturing country, with more than a third of world production, driven by domestic demand it produces from motor vehicles to industrial machinery. But its industries’ heavy reliance on high-tech American products, such as semiconductors, was a strategic weakness.
“Basic capabilities are still weak, basic technologies are in the hands of others and the risk of‘ being hit in the throat ’and having‘ a slipped bicycle chain ’has increased significantly,” said Miao Wei, who was Minister of Industry and Information Technology for a decade before leaving office last year.
As the Chinese economy pivots toward a model based on polluting services and smoke battery factories shrink, manufacturing output as part of the economy has shrunk. In 2020, manufacturing accounted for just over a quarter of gross domestic product, the lowest since 2012.
“The relationship between manufacturing output and GDP has declined too soon and too quickly, which not only weighs on economic growth and affects employment, but also leads to security gaps in our industries and diminishes the capacity of the our economy to bear the risks and its global competitiveness, ”said Miao, who is now a member of the Chinese People’s Political Consultative Conference (CPPCC), the government’s top advisory body.
President Xi Jinping said in November that innovation in the manufacturing industry is far from adequate and that companies must face “bottleneck” technologies to become fully innovative.
“China’s manufacturing industry has achieved great success in recent years, but the situation of being ‘big but not strong’ and ‘complete but not good’ has not fundamentally changed,” Miao said in a speech to the delegates of the CPPCC at the Great Hall of the People of Beijing.
There are many problems that restrict the development of high-quality Chinese manufacturing, but the most fundamental is insufficient market-oriented reform, Miao said.
While the tax burden on companies remains high and financial support for the manufacturing sector urgently needs to be strengthened, the lack of innovative and high-tech talent has also significantly restricted the development of the sector, Miao added.
“We need to maintain our strategic decision, stay clear and deeply understand the shortcomings and shortcomings.”
Reports by Stella Qiu, Ryan Woo, Hallie Gu and Yingzhi Yang; Edited by Simon Cameron-Moore and Christopher Cushing