40 BEIJING REVIEW AUGUST 1, 2019 http://www.bjreview.comBUSINESS MARKET WATCH
This is an edited excerpt of an article written by Guo Kesha,
Dean of the School of Economics and Finance at Huaqiao
University, Fujian Province, published in Guangming Daily
Copyedited by Sudeshna Sarkar
Comments to [email protected]T
he development of the manufacturing
industry has played a key role in China’s
economic growth. In 2018, the value
added of manufacturing reached 26.5 trillion
yuan ($3.8 trillion), contributing 29.4 percent of
the GDP.
China has developed into an industrial
power with complete industrial systems and
a strong infrastructure foundation. While
the manufacturing industry boasts strong
production capacity, many sub-sectors, how-
ever, are burdened by overcapacity and need
urgent transformation and upgrade.
Excess capacity can be cut by encourag-
ing market competition and phasing out
loss-making “zombie enterprises.” This will
also balance supply and demand and keep
commodity prices stable to develop a favor-
able market environment.
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development of the manufacturing indus-
try. Due to domestic economic growth and
changing development modes, the govern-
ment and enterprises’ input in technological
research and development (R&D) has seen
substantial growth, improving the innova-
tion capacity of the industry and promoting
university-industry research collaboration.
Since the manufacturing industry hasdeveloped on a large scale, only industrial
upgrade can further expand it and make it
a stable contributor to economic growth.
To achieve high-quality development of the
industry, the growth of hi-tech, strategic
emerging and advanced manufacturing
industries should be accelerated and tradi-
tional manufacturing industries upgraded.
As part of supply-side structural reform,
China needs to focus on promoting in-
novation and green development of the
manufacturing industry, developing new
driving forces and upgrading traditional
industries as it reduces costs and improves
weak sectors.
Industrial policies in line with domestic
conditions should be implemented and
more market-oriented and law-based ap-
proaches used to give full play to the role of
the market in the allocation of resources, en-
hance the effectiveness of the policies and
reduce negative impacts.
Efforts are also needed to promote
integrated development of manufacturing
and service industries based on information
technology.
Technological R&D and manufacturing
that used to be carried out independently
have been connected through technolo-
gies such as the Internet, big data and theInternet of Things, making manufacturing
and services increasingly closely linked.
Manufacturers need to follow the new trend
by making full use of technological platforms
integrated with modern service industries
and accelerate upgrading traditional indus-
tries through high technology to contribute
to manufacturing restructuring.
As China’s economy enters a new phase
of pursuing high-quality growth amid domes-
tic and external uncertainties, reforms are
being furthered and opening up widened.
In the future, it is necessary to promote
mergers and acquisitions of manufacturing
enterprises, increase industrial concentra-
tion and create a favorable environment for
enterprises to expand.
The development of the private and public
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stitute a key driving force for the high-quality
development of the manufacturing industry as
small and medium-sized enterprises account
for a large part of it. As part of broader reform
efforts, private companies should be allowed
greater access to industries where state-owned
enterprises have a stronger presence. China
needs to focus on both the public and private
sectors to develop various forms of mixed-
ownership economy, broaden channels for
their mutual investment and boost the vitality
of market entities. QIndustrial Upgrade Essential for the Manufacturing
Sector’s Expansion
OPINION
XIN
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A helicopter model on display at the 19th China
Harbin International Equipment Manufacturing Expo
in Harbin, northeast China’s Heilongjiang Province,
on May 16