Yao Yang: Build Manufacturing Powerhouse

Aug 12-2019   

The Chinese economy is ushering in the V2.0 of the supply-side reform with high-quality growth at the core; the most critical leverage will be the cultivation of high-quality manufacturing, says Prof. Yao Yang, Dean of NSD.

Only 11 economies have managed to avoid the “middle-income trap” and enter the ranks of high-income nations since the Second World War, and one of their shared traits is the development of manufacturing industry, which supplies technical innovations, drives the growth of service industry (both B to C and B to B), and secures competitiveness in the international market.

China’s manufacturing industry tops the world in both added value and export value, and boasts the most comprehensive industrial segments and the largest workforce. Though de-industrialization has begun in China, it only signifies its share of jobs and added value relative to the national totals, and not a complete halt in its growth. On the contrary, it’s high time to ensure and realize its high-quality growth by keeping an eye on the long way to catch up with Western counterparts.

By learning from Germany and Japan, invisible champions in niche fields should be forged through market selections. Small and medium-size firms should have better access to financing. Some universities should shift focus to technical education. Moreover, better policy environments should be cultivated by reducing taxes, refraining from adopting random industrial policies, and taking measures to make manufacturing jobs attractive for workers who have moved in exodus to the service industry.