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China at least 30 years away from becoming manufacturing 'great power': former minister

Economic IndicatorsMar 07, 2021 03:20AM ET
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2/2 © Reuters. Employee works on a production line manufacturing steel structures at a factory in Huzhou 2/2

BEIJING (Reuters) - China is at least 30 years away from becoming a manufacturing nation of "great power", a former industry minister said on Sunday, despite boasting the world's most complete industrial supply chains.

In recent years, China has become the world's top manufacturing nation, accounting for over a third of global output, driven by domestic demand to produce everything from motor vehicles to industrial machinery. But its industries' heavy dependence on U.S. high-tech products such as semiconductors constituted a strategic weakness.

"Basic capabilities are still weak, core technologies are in the hands of others, and the risk of 'being hit in the throat' and having 'a slipped bike chain' has significantly increased," said Miao Wei, who was Minister of Industry and Information Technology for a decade before stepping down last year.

As the Chinese economy pivots towards a services-based model and polluting smoke-stack factories are mothballed, manufacturing output as a share of the economy has declined. In 2020, manufacturing accounted for slightly over a quarter of gross domestic product, the lowest since 2012.

"The ratio of manufacturing output to GDP has been declining too early and too quickly, which not only weighs on economic growth and affects employment, but also brings security loopholes to our industries and diminishes our economy's ability to withstand risks, and its global competitiveness," said Miao, now a member of the Chinese People's Political Consultative Conference (CPPCC), the top advisory body to the government.

President Xi Jinping said in November that innovation in the manufacturing industry is far from adequate, and firms 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 been fundamentally changed," Miao said in a speech to CPPCC delegates at the Great Hall of the People in Beijing.

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

While the tax burden on companies remains heavy, and financial support on the manufacturing sector needs strengthening urgently, a shortage of innovative and high-tech talent has also significantly constrained development of the sector, Miao added.

"We must maintain our strategic resolve, stay clear-headed and deeply understand the gaps and deficiencies."

China at least 30 years away from becoming manufacturing 'great power': former minister
 

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Comments (12)
Steve Lora
Steve Lora Mar 07, 2021 10:18PM ET
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3rd World country. China will be making carnival toys 30 years from now
Gary SKY saw
Gary SKY saw Mar 07, 2021 9:14PM ET
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All anti China here.. Be careful.. United States of India will replace USA soon... Don't just look at China.. Look at all the multi national companies ceo.. Who are they and Biden administration?
Jeremy Sklenar
Jeremy Sklenar Mar 07, 2021 8:11PM ET
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What a shame... Very poor quality of all China manufactured goods.. it all ends up in the landfills and scrap yards..
Viking Fire
Viking Fire Mar 07, 2021 7:27PM ET
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Chinas hostility and aggression and failures that broke down supply lines during covid has made countries alter course away from them. With countries limiting how much they let china make for them in the future other countries will benefit more: india being one.
David David
David9 Mar 07, 2021 2:32PM ET
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I study China daily. These people know how to plan and think way ahead. When there is a problem, they will solve it as a nation. I see China continue to rise and will become number one. It is very hard not to think this isn't the case..
Wilmark Turco
Wilmark Turco Mar 07, 2021 8:08AM ET
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this is good great job
Viking Fire
Viking Fire Mar 07, 2021 6:04AM ET
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India will play a significant role in the future as its legal and political structure is closely aligned with democratic nations. Countries found that China cant be relied on with supply lines and covid so they will expand to rely on them less and less.
David David
David9 Mar 07, 2021 6:04AM ET
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China will remain the World's Factory for generations to come. No country come close to China because they have spend trillions over decades on their supply chains and infrastructure. India has the people but is lacking in so many things. Just look at today, the farmers are protesting for months. China is the Sleeping Dragon.
Ad Cline
Ad Cline Mar 07, 2021 6:04AM ET
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the Chinese have serious problems in there manufacturing base and supply chains that can not be resolved until they change there political system. there their 50year plan will fail unless changes are made.
Yelen Shim
Yelen Shim Mar 07, 2021 5:49AM ET
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CHINA passed that 30 years ago.
michael engel
michael engel Mar 07, 2021 5:47AM ET
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The switch from a low ROA, when cheap prices beat the competition, to better quality products for  higher gross margin, is difficult to achieve.
Juan Thomas
Juan Thomas Mar 07, 2021 5:11AM ET
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I think China passed that fase long ago. People gotta talk about something
Kelly Mayer
Kelly Mayer Mar 07, 2021 4:07AM ET
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Of course you dont want the enemy or the competition to know how far ahead you are. Make them believe you are 30yrs away from your goals, when you probably are already on top of the game
YC Teng
YC Teng Mar 07, 2021 3:08AM ET
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Great observations and so true...Welcome to the 5th industrial revolution where robots and AI determine winners
 
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