Xu Zhaoyuan: Enhancing international competitiveness and added value is the key to stabilizing the proportion of manufacturing


2022-01-14: [Article Link]  Whirring: Enhancing international competitiveness and value-added is key to stabilizing the share of manufacturing Although our manufacturing sector has continued to grow faster and its share has remained high, there has also been a sharp decline in the share of GDP in recent years, with the 14th Five-Year Plan setting out the objective of maintaining a basic stability in the share of manufacturing. In an interview with a journalist from China's Economic Times, the Deputy Minister for Industrial and Economic Research of the Centre for Development Studies of the State Council stated that, in order to achieve basic stability in the manufacturing sector during our 14th Five-Year Plan, the focus should be on stabilizing international competitiveness, enhancing upgrading, increasing the rate of value addition and optimizing the development environment, among which the enhancement of international competitiveness and the rate of value addition are key to stabilizing the manufacturing sector. China Economic Times: How can we see the current rapid decline in the share of our manufacturing industry in GDP? The share of our manufacturing industry is currently not low compared to that of other economies and is now at an intermediate level compared to other economies with similar levels of economic development. In recent years, however, the share of manufacturing has declined at a faster rate, from 32.1 per cent to 26.2 per cent between 2011 and 2020, a total decrease of 5.9 percentage points. This is higher than in the US, France, and South Korea, among others. And many economies that have experienced faster declines in manufacturing than in our own countries have been accompanied by a significant slowdown in economic growth, such as Japan and Italy, so that economic development requires attention to the changing trend in manufacturing. China Economic Times: What factors have affected the evolution of our manufacturing sector as a share of GDP? The main factors influencing the changing trend in the share of manufacturing in the post-industrial world are two: price factors. As a result of the rapid increase in production efficiency in the manufacturing sector, prices in the services sector have risen significantly faster than in the manufacturing sector, leading to a downward trend in the share of manufacturing in current prices; and consumption structural upgrading. An important indicator of the upgrading of the consumption structure is the continuing decline in the share of food and manufactured goods in consumption, and the rising share of services. Both factors are normal patterns of economic development. In addition, there are a number of other factors that have important implications, such as changes in the international competitiveness of manufacturing, the servicing of manufacturing, and changes in the interdependence of exports and imports. Between 2010 and 2017, the share of our manufacturing industry declined by 5.3 percentage points, for both general and regular reasons, such as price and consumption escalation, and for new developments in the integration of manufacturing and services, but the sharper decline was mainly due to two factors: the faster decline in the share of manufacturing exports in final demand. Driven by faster domestic demand growth, my share of final demand abroad has continued to decline in recent years. Second, a number of disharmony factors in the economy have reduced the share of manufacturing. What measures can be taken to stabilize manufacturing as a share of GDP during the “14th Five-Year Plan” period? Xiaoquan: In order to achieve basic stability in the manufacturing sector during our 14th Five-Year Plan, effective and targeted measures should be taken to stabilize international competitiveness, enhance upgrading, increase the rate of value added and optimize the development environment. The first is to stabilize and improve the international competitiveness of manufacturing, to play a supporting role for external demand in stabilizing the share of manufacturing, to strengthen the monitoring and analysis of the international competitiveness of our manufacturing industry and to take timely and targeted measures to address weaknesses. Reducing manufacturing finance, taxes, fees, logistics and institutional costs, and supporting enterprises to further raise costs such as manpower by enhancing innovation and efficiency. The second is to continuously increase support for business upgrading and to promote a more or less stable share of manufacturing inputs in the production chain. Adapting to the new situation in which the vast majority of the country’s products have emerged from a lack of productive capacity, Governments and the relevant sectors have shifted their focus on promoting economic development from attracting new projects and scaling up to a new model based on upgrading and transformational development. Within the fixed asset investment structure, support for the digital, intelligent and green low-carbon transformation of the manufacturing sector has been continuously strengthened to promote basic stability in the share of manufacturing inputs in the production chain. The third is to upgrade the quality of manufacturing development and invest in increasing value added. Keeping up with innovation drivers, promoting business identity and differentiation; and promoting merger restructuring to optimize the sector’s market structure, leading to a transition from low-level homogenization and largely based on price competition to high-quality development. (c) To direct export large enterprises to strengthen their domestic upstream industry-led role, to strengthen import substitution for parts and components in manufactured products and to increase domestic value added in exports. In order to ensure the stability and continuous improvement of international competitiveness, it is necessary to increase the level of remuneration of workers by improving their quality, thereby increasing the value added in the manufacturing sector. The fourth is to further improve the macro-environment of manufacturing development. In particular, there is a need for sustained and sound improvements in real-estate price regulation, changes in high housing prices, improvements in consumer capacity, and reductions in manufacturing costs.


Note: This is a translated version of the Chinese news media article. A mature and nuanced reading is suggested.






Trending in China

What China Reads


Xu Zhaoyuan: Enhancing international competitiveness and added value is the key to stabilizing the proportion of manufacturing


2022-01-14: [Article Link]  Whirring: Enhancing international competitiveness and value-added is key to stabilizing the share of manufacturing Although our manufacturing sector has continued to grow faster and its share has remained high, there has also been a sharp decline in the share of GDP in recent years, with the 14th Five-Year Plan setting out the objective of maintaining a basic stability in the share of manufacturing. In an interview with a journalist from China's Economic Times, the Deputy Minister for Industrial and Economic Research of the Centre for Development Studies of the State Council stated that, in order to achieve basic stability in the manufacturing sector during our 14th Five-Year Plan, the focus should be on stabilizing international competitiveness, enhancing upgrading, increasing the rate of value addition and optimizing the development environment, among which the enhancement of international competitiveness and the rate of value addition are key to stabilizing the manufacturing sector. China Economic Times: How can we see the current rapid decline in the share of our manufacturing industry in GDP? The share of our manufacturing industry is currently not low compared to that of other economies and is now at an intermediate level compared to other economies with similar levels of economic development. In recent years, however, the share of manufacturing has declined at a faster rate, from 32.1 per cent to 26.2 per cent between 2011 and 2020, a total decrease of 5.9 percentage points. This is higher than in the US, France, and South Korea, among others. And many economies that have experienced faster declines in manufacturing than in our own countries have been accompanied by a significant slowdown in economic growth, such as Japan and Italy, so that economic development requires attention to the changing trend in manufacturing. China Economic Times: What factors have affected the evolution of our manufacturing sector as a share of GDP? The main factors influencing the changing trend in the share of manufacturing in the post-industrial world are two: price factors. As a result of the rapid increase in production efficiency in the manufacturing sector, prices in the services sector have risen significantly faster than in the manufacturing sector, leading to a downward trend in the share of manufacturing in current prices; and consumption structural upgrading. An important indicator of the upgrading of the consumption structure is the continuing decline in the share of food and manufactured goods in consumption, and the rising share of services. Both factors are normal patterns of economic development. In addition, there are a number of other factors that have important implications, such as changes in the international competitiveness of manufacturing, the servicing of manufacturing, and changes in the interdependence of exports and imports. Between 2010 and 2017, the share of our manufacturing industry declined by 5.3 percentage points, for both general and regular reasons, such as price and consumption escalation, and for new developments in the integration of manufacturing and services, but the sharper decline was mainly due to two factors: the faster decline in the share of manufacturing exports in final demand. Driven by faster domestic demand growth, my share of final demand abroad has continued to decline in recent years. Second, a number of disharmony factors in the economy have reduced the share of manufacturing. What measures can be taken to stabilize manufacturing as a share of GDP during the “14th Five-Year Plan” period? Xiaoquan: In order to achieve basic stability in the manufacturing sector during our 14th Five-Year Plan, effective and targeted measures should be taken to stabilize international competitiveness, enhance upgrading, increase the rate of value added and optimize the development environment. The first is to stabilize and improve the international competitiveness of manufacturing, to play a supporting role for external demand in stabilizing the share of manufacturing, to strengthen the monitoring and analysis of the international competitiveness of our manufacturing industry and to take timely and targeted measures to address weaknesses. Reducing manufacturing finance, taxes, fees, logistics and institutional costs, and supporting enterprises to further raise costs such as manpower by enhancing innovation and efficiency. The second is to continuously increase support for business upgrading and to promote a more or less stable share of manufacturing inputs in the production chain. Adapting to the new situation in which the vast majority of the country’s products have emerged from a lack of productive capacity, Governments and the relevant sectors have shifted their focus on promoting economic development from attracting new projects and scaling up to a new model based on upgrading and transformational development. Within the fixed asset investment structure, support for the digital, intelligent and green low-carbon transformation of the manufacturing sector has been continuously strengthened to promote basic stability in the share of manufacturing inputs in the production chain. The third is to upgrade the quality of manufacturing development and invest in increasing value added. Keeping up with innovation drivers, promoting business identity and differentiation; and promoting merger restructuring to optimize the sector’s market structure, leading to a transition from low-level homogenization and largely based on price competition to high-quality development. (c) To direct export large enterprises to strengthen their domestic upstream industry-led role, to strengthen import substitution for parts and components in manufactured products and to increase domestic value added in exports. In order to ensure the stability and continuous improvement of international competitiveness, it is necessary to increase the level of remuneration of workers by improving their quality, thereby increasing the value added in the manufacturing sector. The fourth is to further improve the macro-environment of manufacturing development. In particular, there is a need for sustained and sound improvements in real-estate price regulation, changes in high housing prices, improvements in consumer capacity, and reductions in manufacturing costs.

Note: This is a translated version of the Chinese news media article. A mature and nuanced reading is suggested.

Related Articles

Wang Yiming: "14th Five-Year Plan" Action Plan for High-Quality Development of Digital Economy

2022-01-23: Access to the theme: 14th Five-Yar Plan Digital economy Quality development Since the Party’s eighteenth year, the Party’s central government has attached great importance to digital economic development. Xi’s Secretary-General has stressed the need “to make full use of big data and…

Bengbu, Anhui has zero GDP growth in 2021, and it really "lives in Bengbu"

2022-01-23: “The port has been living”, which is a punctuation of the city, but did not realize that, in the last 2021, the port's economic indicators were really “disturbed”. On 17 January, a report on the implementation of the National Economic and Social Development Plan 2021 and the draft National…

The effect of fiscal and financial services for the real economy has emerged

2022-01-22: In 2022, fiscal and financial policies will continue to be stronger and more precise, with greater cross-cyclical regulation, both aggregate and structural functions of sound macroeconomic policies, more proactive and proactive, with a focus on front-loading, macroeconomic stabilization, greater…

Expanding "Mobile Internet Plus" Applications to Help Modernize Agriculture and Rural Areas China Agricultural News

2022-01-23: Expanding the "moveable Internet+" application Authors: Min Shiu (Professor, School of Economic Management, Chinese University of Agriculture); Wang Xiaosheng (Researcher, Chinese Centre for Agricultural Policy Studies, Beijing University); Lee Goong Sung (Professor, School of Economic…

Sun Zaichen, Executive Vice President of Beijing Lawyers’ Law Research Association: Innovative Service Model of Digital Legal Platform

2022-01-23: The 21st Century Economic Reporter Wang Joon, intern, Waring Snow Beijing. “It is impossible to do new services in the old way, to create digital services and to follow the path of `platformization' `digitization' `productization'.” On 21 January, the Director General of Beijing's Law Research…  

Precise drip irrigation has the effect of temperature financial and financial services for the real economy

2022-01-23: In the year when the 14th Five-Year Plan was launched, fiscal and financial policies were sufficiently robust and accurate to drip irrigation, and key economic indicators continued to grow, strongly supporting the continued operation of macroeconomics in reasonable areas. Looking ahead to 2022,…

Expanding "Mobile Internet Plus" Applications to Help Modernize Agriculture and Rural Areas

2022-01-22: Authors: Min Shiu (Professor, School of Economic Management, Chinese University of Agriculture); Wang Xiaosheng (Researcher, Chinese Centre for Agricultural Policy Studies, Beijing University); Lee Goong Sung (Professor, School of Economic Management, Chinese University of Agriculture, China)…  

The State Council issued the "14th Five-Year Plan for Tourism Development" When will the stagnant outbound tourism be restarted?

2022-01-22: There is a strong will on the part of practitioners, consumers and the wider environment, mainly in the light of the global epidemic. On 20 January, the State Council issued the “14th Five-Year Plan” Tourism Development Plan (hereinafter referred to as “Plan”). According to the Plan, the…

2022 Economic Outlook Series: Don't worry about the "decline" of growth in the fourth quarter of 2021

2022-01-22: Liu Ying (Director and Researcher, Department of Cooperation and Research, Kwangyang Institute of Finance, People's University of China) In 2021, China's economic data were fresh, growing at a quarterly rate of 18.3 per cent, 7.9 per cent, 4.9 per cent and 4.0 per cent, which appears to be…  

Related Articles

Wang Yiming: "14th Five-Year Plan" Action Plan for High-Quality Development of Digital Economy

2022-01-23: Access to the theme: 14th Five-Yar Plan Digital economy Quality development Since the Party’s eighteenth year, the Party’s central government has attached great importance to digital economic development. Xi’s Secretary-General has stressed the need “to make full use of big data and…

Bengbu, Anhui has zero GDP growth in 2021, and it really "lives in Bengbu"

2022-01-23: “The port has been living”, which is a punctuation of the city, but did not realize that, in the last 2021, the port's economic indicators were really “disturbed”. On 17 January, a report on the implementation of the National Economic and Social Development Plan 2021 and the draft National…

The effect of fiscal and financial services for the real economy has emerged

2022-01-22: In 2022, fiscal and financial policies will continue to be stronger and more precise, with greater cross-cyclical regulation, both aggregate and structural functions of sound macroeconomic policies, more proactive and proactive, with a focus on front-loading, macroeconomic stabilization, greater…

Expanding "Mobile Internet Plus" Applications to Help Modernize Agriculture and Rural Areas China Agricultural News

2022-01-23: Expanding the "moveable Internet+" application Authors: Min Shiu (Professor, School of Economic Management, Chinese University of Agriculture); Wang Xiaosheng (Researcher, Chinese Centre for Agricultural Policy Studies, Beijing University); Lee Goong Sung (Professor, School of Economic…

Sun Zaichen, Executive Vice President of Beijing Lawyers’ Law Research Association: Innovative Service Model of Digital Legal Platform

2022-01-23: The 21st Century Economic Reporter Wang Joon, intern, Waring Snow Beijing. “It is impossible to do new services in the old way, to create digital services and to follow the path of `platformization' `digitization' `productization'.” On 21 January, the Director General of Beijing's Law Research…  

Precise drip irrigation has the effect of temperature financial and financial services for the real economy

2022-01-23: In the year when the 14th Five-Year Plan was launched, fiscal and financial policies were sufficiently robust and accurate to drip irrigation, and key economic indicators continued to grow, strongly supporting the continued operation of macroeconomics in reasonable areas. Looking ahead to 2022,…

Expanding "Mobile Internet Plus" Applications to Help Modernize Agriculture and Rural Areas

2022-01-22: Authors: Min Shiu (Professor, School of Economic Management, Chinese University of Agriculture); Wang Xiaosheng (Researcher, Chinese Centre for Agricultural Policy Studies, Beijing University); Lee Goong Sung (Professor, School of Economic Management, Chinese University of Agriculture, China)…  

The State Council issued the "14th Five-Year Plan for Tourism Development" When will the stagnant outbound tourism be restarted?

2022-01-22: There is a strong will on the part of practitioners, consumers and the wider environment, mainly in the light of the global epidemic. On 20 January, the State Council issued the “14th Five-Year Plan” Tourism Development Plan (hereinafter referred to as “Plan”). According to the Plan, the…

2022 Economic Outlook Series: Don't worry about the "decline" of growth in the fourth quarter of 2021

2022-01-22: Liu Ying (Director and Researcher, Department of Cooperation and Research, Kwangyang Institute of Finance, People's University of China) In 2021, China's economic data were fresh, growing at a quarterly rate of 18.3 per cent, 7.9 per cent, 4.9 per cent and 4.0 per cent, which appears to be…