China is at least 30 years from becoming a ‘big power’ manufacturing: ex-minister

BEIJING (Reuters) – China is at least 30 years from becoming a “big power” manufacturing country, said a former industry minister on Sunday, despite boasting the most complete industrial supply chains in the world.

In recent years, China has become the world’s leading manufacturing country, accounting for more than a third of global production, driven by domestic demand to produce everything from motor vehicles to industrial machinery. But the strong reliance on its US high-tech product industries, such as semiconductors, was a strategic weakness.

“Basic capabilities are still weak, essential 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 Technology for a decade before leaving office last year.

As the Chinese economy turns towards a service-based model and polluting chimney factories are deactivated, manufacturing production as a share of the economy has declined. In 2020, manufacturing accounted for just over a quarter of gross domestic product, the lowest since 2012.

“The proportion of industrial production in relation to GDP is decreasing very early and very quickly, which not only weighs on economic growth and affects employment, but also brings security holes to our industries and decreases the ability of our economy to support risks and their global competitiveness, ”said Miao, now a member of the Chinese People’s Political Consultative Conference (CCPPC), the government’s main advisory body.

President Xi Jinping said in November that innovation in the manufacturing industry is far from adequate and companies need to tackle “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 CCPPC delegates in the Great Hall. of the People in Beijing.

There are many problems that hinder the development of high-quality Chinese manufacturing, but the most fundamental is insufficient market-oriented reforms, said Miao.

While the tax burden on companies remains heavy and financial support for the manufacturing sector urgently needs to be strengthened, the scarcity of innovative and high-tech talent has also significantly restricted the sector’s development, added Miao.

“We must maintain our strategic determination, keep a clear mind and deeply understand the gaps and deficiencies.”