Economic Watch: China seeks next leap in manufacturing

Source: Xinhua| 2019-12-19 15:57:50|Editor: mingmei
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BEIJING, Dec. 19 (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.

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.