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China’s economic modernization calls for a thriving real economy

Updated: Oct 30,2017 4:42 PM

According to a report to the 19th CPC National Congress, the core task of facilitating economic development should be grounded in the real economy, for the purpose of establishing a modernized economic system.

Key word: international standards

The report said the government should support the optimization and upgrade of traditional industries and speed up the development of the service industry with the guidance of international standards.

So far, over 80 percent of standards in China’s industries are consistent with international ones, including its household electrical appliance, textile, furniture, toy, and footwear industries.

“Keeping up with international standards is a pressure as well as an incentive for China’s industries to persistently enhance their quality of products and levels of production,” said Yang Yuying, a researcher at the International Cooperation Center of the National Development and Reform Commission.

With the surging of new technologies, industries, and business types, more technological standards should be made, covering key fields such as robots, advanced rail transit equipment, agricultural machinery, and high-performance medical appliances.” So China should not only introduce international standards, but also cultivate its own,” Yang said.

Key word: entrepreneurship

The report promised more protection for entrepreneurship and encouraged more people to engage in innovation and start their own businesses.

On Sept 25, the CPC Central Committee and the State Council jointly issued a guideline on encouraging the entrepreneurial spirit and creating a favorable environment for entrepreneurship, the first of its kind in China.

The moves by the central authorities was welcomed by Zhang Ruimin, CEO and chairman of Haier Group, saying it offers a profound guidance for enterprises at the pivotal stage of economic and social transformation.

The all-around deployment covers many aspects, ranging from spiritual guidance to financial support, Zhang said. Additionally, IPR protection and fault-tolerant mechanism further help share entrepreneurs’ concerns.

Key word: in-depth integration

The report suggested an in-depth integration of the internet, big data, artificial intelligence, and the real economy.

“Just within six months after we introduced the ET industrial brain technology from the Alibaba Group, our photovoltaic production saw a one-percentage point increase, which means an annual reduction in costs worth billions of yuan,” said a person in charge of the Suzhou Xiexin Photo-Voltaic Ltd Co.

Blending information technology and the real economy will restructure the driving mechanism for economic growth and give rise to a substantial group of new business types, economic modes, and industries. The traditional industries’ transformation and upgrade will be greatly advanced with the integration of information technology, propelling China’s manufacturing to a higher level, said Wang Peng, vice-president of the China Center for Information Industry Development.

Key word: world-class advanced manufacturing clusters

According to the report, enormous efforts should be made to foster China’s industries to ascend to mid-high levels of the global value chain and cultivate several world-class advanced manufacturing clusters.

A cultivation fund — worth 3 billion yuan ($451.50 million) — for advanced manufacturing clusters, was set up as early as 2015 in Henan province and set the tone for the development of electronic information and equipment manufacturing. This measure contributed to the rise of manufacturing clusters in Zhengzhou and Luoyang.

“Advanced manufacturing stemming from high quality and efficiency applies to traditional industries as well. Therefore, an equal amount of attention should be attached to cultivating new industries and upgrading traditional ones,” said Wang.

Aside from that, Wang added that the market’s decisive impact on resource distribution and government’s intervention should reinforce one another in economic development. Meanwhile, crucial breakthroughs should be made in the middle and western areas, with the eastern costal area setting a good example.

Key word: craftsmanship

The report also drew people’s attention to craftsmanship and work ethics.

At the 44th World Skills Competition, 52 young Chinese craftsmen made a striking sweep of awards with 15 gold medals, seven silver medals, eight bronze medals, and 12 awards of merit. This best effort to date showcased the overall capacity of the development of China’s vocational techniques.

“The supply-side quality can only be enhanced on the condition that enterprises and laborers adhere to their down-to-earth dedications and cater to the changes in people’s needs,” said Yao Yang, director of the National School of Development at Peking University.

In order to popularize the ideas of pursuing perfection, an incentive mechanism is needed to raise high-tech talents’ incomes and social status. Additionally, a reinforced technical education is urgently needed, adapting to new techniques, industries and business types, said Yao.