China accelerates the construction of a modern industrial system, which helps stabilize the global supply chain

Since this year, the Central Committee has held several meetings to emphasize the priority of developing the modern industrial system, so as to support the modernization drive. Obviously, "modern industrial system" has become the key word of China's development.

The first meeting of the 20th Central Finance and Economics Commission held in May studied the issue of accelerating the construction of a modern industrial system, emphasizing that the modern industrial system is the material and technological foundation of a modern country, and that the focus of economic development must be placed on the real economy to provide strong material support for the realization of the second century goal.

The meeting of the Political Bureau of the CPC Central Committee held in late July pointed out that we should vigorously promote the construction of a modern industrial system, accelerate the cultivation of strategic emerging industries and create more pillar industries.

Recently, many economists and executives at home and abroad said that China's acceleration of the construction of a modern industrial system will help the global supply chain to be smooth and efficient and ensure the smooth operation of the global economy. However, "decoupling" from China will bring huge risks to the global economic recovery.

China's industrial system has great attraction for multinational companies

For the Chinese market, economists and executives at home and abroad generally believe that China has great attraction to multinational companies because of its perfect supply chain support system, strong logistics system, broad market and policies to encourage innovation.

Hans Paul Burkner, global honorary chairman of Boston Consulting Group (BCG), said that China's efforts to promote industrial modernization will help China move towards the high-end of the value chain, inject innovative vitality into the Chinese economy, promote green development, and further transform to knowledge intensive and consumption driven. He believes that the modern industrial system will help China maintain its position in the global supply chain in the face of uncertainties such as geopolitical and manufacturing backflow.

Craig Allen, president of the US China Trade National Committee, said that "China is very attractive in terms of supply chain integration". He said that the development scale of China's supply chain has encouraged American enterprises to enhance their competitiveness through investment in infrastructure and talents.

Isabel Ge Mahe, Apple's vice president and managing director of Greater China, said: "In the past 30 years, Chinese suppliers have grown rapidly and become an indispensable and extremely important part of our supply chain“

Some foreign media reported that Apple was considering moving some of its iPhone production lines to India, but Ge Yue said that Apple was very happy and willing to push China towards intelligent manufacturing.

In the semiconductor industry, although the US government vigorously promotes "decoupling", the enthusiasm of American chip enterprises for the Chinese market has not been affected by this.

Since this year, Patrick Gelsinger, CEO of Intel, an American chip giant, has visited China three times. He said: "China plays an important role in Intel's business strategy and business development. Intel has a long-term commitment to the Chinese market, Chinese customers and partners. In the nearly 40 years since Intel entered China, it has achieved sustained and stable business development. "At the end of June, Intel Dawan Science and Technology Innovation Center was established in Nanshan District, Shenzhen, focusing on AI and chip application development.

Complete industrial categories provide strong support for the stability of the industrial chain supply chain

The reason why the Chinese market remains attractive to foreign-funded enterprises is that China is the only country in the world with all the industrial categories listed in the UN Industrial Classification. According to the data released by the Ministry of Industry and Information Technology, the added value of China's manufacturing industry accounts for nearly 30% of the world's total, and its scale has ranked first in the world for 13 consecutive years. In addition, more than 570 Chinese industrial enterprises have been listed in the top 2500 global R&D investment, providing strong support for the stability of the industrial chain supply chain.

At the beginning of this year, a report issued by HSBC showed that as China moves up the value chain, China will become an importer, rather than an exporter of intermediate products such as raw materials. The report believes that this will help to strengthen global connectivity and enhance the competitiveness of global supply chains. In addition, the report points out that the intermediate products imported by mainland China account for only 20% of the import of spare parts on average; The intermediate products exported by China are increasingly relied on by the member countries of the Association of Southeast Asian Nations.

Jeffrey Sachs, a famous economist and director of the Center for Sustainable Development of Columbia University, said: "China's advantage today is that it is at the forefront of many important technological innovations, which is very beneficial to the future development of China's manufacturing industry“

Technological innovation capability is constantly enhanced

It should be noted that China still faces bottlenecks in key technology fields such as semiconductor. Huang Qunhui, director of the Institute of Economics of the Chinese Academy of Social Sciences, believes that manufacturing is the most active industry in technological innovation activities, and China needs further training in basic materials, basic technologies and key basic software. However, as far as the phased development achievements of China's manufacturing industry are concerned, they have been affirmed.

In 2018, the World Economic Forum cooperated with McKinsey Consulting to track the advanced manufacturing plants using the most advanced digital technology worldwide, namely the so-called "lighthouse factory". Up to now, China has become the country with the largest number of lighthouse factories in the world, reaching 50, accounting for one third of the global total.

Denis Depoux, global managing director of Roland Berger International Management Consulting, said: "The quality and depth of China's industrial clusters, as well as the ability to rapidly invest a lot of manpower and launch new products, are impressive and are not easy to replace."

key word: China Supply chain Global industry