In recent years, what achievements have been made in our country’s industrial development? What specific tasks are there in leading the construction of a modern industrial system with scientific and technological (S&T) innovation? How will we vigorously promote new industrialization next? In response to these questions, Jin Zhuanglong, Party Group Secretary and Minister of the Ministry of Industry and Information Technology, recently answered questions from reporters.

Standing at a new and higher starting point, consolidating and enhancing the industrial economy’s recovery and improvement

Reporter: In recent years, what achievements have been made in China’s industrial development? What is the current industrial economic development trend? What will be the focus of efforts moving forward?

Jin Zhuanglong: Since the 18th Party Congress, with General Secretary Xi Jinping raising the flag, setting the direction, and steering the course, a series of important discussions on the major theoretical and practical issues of promoting new industrialization have been made, greatly enriching and developing our Party’s systematic understanding of industrialization, providing fundamental adherence to and action guidelines for promoting new industrialization. Our country insists on focusing on the real economy to accelerate the pace of new industrialization. The overall strength of the industry, quality and efficiency, as well as innovation, competitiveness, and risk resistance have significantly improved, placing industrial development at a new and higher starting point.

The unique advantages of our industry being ‘comprehensive,’ ‘varied,’ and ‘large’ have become more evident. First, the system is comprehensive. China has 41 industrial categories, 207 industrial subcategories, and 666 industrial types, making it the only country in the world that has all industrial categories classified by the United Nations. Second, the variety is vast. In 500 major industrial products, more than 40% of China’s product output ranks first in the world, with personal computers, mobile phones, air conditioners, solar panels, and other important products accounting for more than half of the global output. Third, the scale is massive. In 2022, China’s total industrial added value reached 40.16 trillion yuan, accounting for 33.2% of GDP; the manufacturing added value reached 33.5 trillion yuan, nearly doubling from 2012. China is the world’s largest manufacturing country, with the added value of manufacturing accounting for about 30% of the global share, ranking first in the world for 14 consecutive years.

The pace of making the manufacturing industry ‘stronger’ is accelerating. The industrial structure is upgrading rapidly, with the added value of high-tech manufacturing accounting for 15.3% of the industrial sector above the designated size in the first three quarters of 2023, up from 9.4% in 2012, and the equipment manufacturing industry’s share increased from 28% to 32.9%. In some key areas and critical tracks, a batch of industries with full production chain competitiveness has been formed. The export structure has been continuously improved. In the first three quarters of 2023, the combined exports of new energy vehicles, lithium batteries, and photovoltaic products increased by 41.7% year-on-year. The regional layout is continuously optimized, with 45 national advanced manufacturing clusters constructed, leading industries with a total output value of over 10 trillion yuan, accounting for about one-third of the total industry output value.

The information and communication industry has achieved development by leaps and bounds. The largest and technologically leading information and communication network has been built, with computing power ranking second globally. A total of 3.282 million 5G base stations have been built, achieving ‘gigabit access in every city,’ ‘5G coverage in every county,’ and ‘broadband access in every village.’ The technological industry has shifted from ‘following and imitating’ to ‘leading and innovating,’ with the global share of 5G standard essential patent declarations reaching 42%, and 6G, quantum communication, and other cutting-edge technologies being at the forefront of the world. The integration of applications has accelerated the empowerment of all aspects of economic and social development. China has become the world’s largest and most active digital consumer market, with industrial internet applications integrated into 49 major categories of the national economy. The capacity for security protection has continuously strengthened, with the overall scale of the cybersecurity industry exceeding 200 billion yuan.

Overall, China’s industrial development has made significant progress but is still at an important juncture of shifting from being big to strong and overcoming difficulties. Currently, the certainty and favorable conditions for continuous development are increasing domestically, especially since the National Conference on Promoting New Industrialization was held from September 22 to 23 last year, injecting strong confidence and strength into our work. Additionally, China faces historic opportunities brought by a new round of S&T revolution and industrial transformation. In recent years, by taking the initiative, some key areas of new-generation information technology and new energy have formed first-mover advantages. Looking to the future, we are confident and capable of seizing opportunities, facing challenges, and continuously achieving new breakthroughs and results in new industrialization, providing a strong material and technological foundation for Chinese-style modernization.

Industry plays a ‘ballast stone’ role in stabilizing the macro economy. Currently, China’s industrial economy shows a trend of recovery and improvement. In the first 11 months of last year, the added value of industries above the designated size increased by 4.3% year-on-year, accelerating by 0.7 percentage points compared to 2022, especially since the growth rate has been accelerating month by month since August. This year, we will continue to fully promote the stable growth of the industrial economy and implement a combination of policies. Deeply implement the work plan for stabilizing growth in ten key industries, support industrial provinces and key provinces and cities to continue ‘taking the lead.’ Consolidate and enhance the driving force and growth pole role of key regions such as Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area, guiding central cities and key city clusters to highlight their unique advantages and achieve differentiated development. Promote the coordinated effort of consumption, investment, and export the ‘Three Carriages,’ boost large-scale consumption of new energy vehicles, electronic products, and explore and cultivate new consumption growth points such as smart home and national ‘trendy products.’ Accelerate the implementation of major projects in the 14th Five-Year Plan, support enterprises to carry out technological transformation and upgrading, expand effective investment in manufacturing, consolidate and enhance the export advantages of the ‘New Three Items,’ stabilize and expand the export of industrial products, and create more export growth points.

Accelerating the release of new development momentum, driving industry innovation with S&T innovation

Reporter: In recent years, China’s industrial S&T innovation capability has significantly increased. What are the specific manifestations? How will we continue to drive industry innovation with S&T innovation next?

Jin Zhuanglong: Industry is the main battlefield for technological innovation, the most active, richest, and most concentrated field of innovation activities, and the field with the strongest spillover effects of innovation. In recent years, China’s industrial S&T innovation capability has significantly increased. In 2022, China became the world’s second-largest country in R&D investment, with more than 570 industrial enterprises among the top 2500 global R&D investors, accounting for nearly one-quarter. The number of invention patent applications filed by Chinese industrial enterprises increased from 176,000 in 2012 to 555,000 in 2022. The country has constructed 27 national manufacturing innovation centers, 2 national and local co-built manufacturing innovation centers, and 260 provincial-level manufacturing innovation centers, forming a networked manufacturing innovation ecosystem. 23 national independent innovation demonstration zones and 178 national high-tech industrial development zones have become important forces in leading and driving industrial S&T innovation and high-tech industrial development. A batch of major landmark achievements has been made in fields such as 5G, manned spaceflight, large aircraft, large cruise ships, and high-end medical equipment, significantly enhancing the capability to secure key materials, strongly supporting the implementation of major national strategies and the construction of a quality powerhouse, aerospace powerhouse, transportation powerhouse, network powerhouse, and digital China.

We will thoroughly implement the deployment of the Central Economic Work Conference, focusing on driving industry innovation with S&T innovation in terms of technology, enterprises, platforms, services, and parks, and accelerating the construction of a demand-oriented, application-driven, enterprise-centered, and government-industry-academia-research-finance integrated industrial S&T innovation system, vigorously promoting the deep integration of S&T innovation and industry innovation. First, comprehensively implement the high-quality development campaigns of key production chains, deeply promote the industry foundation reconstruction project and major technical equipment tackling project, strengthen quality support and standard leadership, and continuously enhance the resilience and security level of production and supply chains. Second, strengthen the main position of enterprises in S&T innovation, further expand the size of S&T-leading enterprises, high-tech enterprises, manufacturing single champion enterprises, technology and innovation-oriented small- and medium-sized enterprises, and other types of innovation entities. Third, continuously optimize the innovation platform network, build 5-10 more national manufacturing innovation centers in key fields, and construct a batch of experimental verification platforms and pilot platforms in key areas such as key materials and major equipment. Fourth, strengthen the support for S&T innovation services, implement manufacturing excellence quality projects and new industry standardization pilot projects, improve policies for the development of the S&T service industry, create an upgraded version of the ‘Torch’ brand, and cultivate professional, market-oriented, and international S&T intermediary organizations. Fifth, optimize the role of various parks, promote the quality and efficiency improvement of national high-tech development zones, leverage the role of national independent innovation demonstration zones well, build world-leading S&T parks and innovation highlands, initiate the creation of national new industrialization demonstration zones, and cultivate world-class advanced manufacturing clusters.

Accelerating the construction of a modern industrial system, promoting the optimization and upgrading of the industrial system

Reporter: Accelerating the construction of a modern industrial system centered on advanced manufacturing is an inevitable requirement for building a new development pattern and promoting high-quality development. Next, how will the Ministry of Industry and Information Technology grasp and implement key tasks?

Jin Zhuanglong: Firmly strengthening, improving, and expanding the manufacturing industry, comprehensively enhancing the level of industrial base advancement and production chain modernization, accelerating the realization of industrial system upgrading and development, and constructing a modern industrial system centered on advanced manufacturing, we need to focus on four aspects.

First, accelerate the transformation and upgrading of traditional industries. China’s traditional industries have a large volume, accounting for more than 80% of the manufacturing industry, and are the basic foundation for China to maintain its status as the world’s largest manufacturing country. We need to place the transformation and upgrading of traditional industries in a more important position, accelerate the high-end, intelligent, and green development of traditional industries, and make traditional industries ‘sprout new shoots.’ Increase the support for manufacturing enterprise technological transformation funds, implement tax incentives and special re-lending policies, improve enterprise technical transformation standards, strengthen legal and regulatory construction, promote equipment updates, process upgrades, management innovations, and digital empowerment. Implement the manufacturing technological transformation and upgrading project, focusing on key industries such as steel, non-ferrous metals, and light industry, widely applying digital and intelligent technology, green technology, and promoting large-scale technological transformations and equipment updates. Deeply implement the ‘increase varieties, improve quality, create brands’ campaign, accelerate the development of green, smart, and innovative products. Promote the orderly transfer of industries at home and abroad, continue to organize industry transfer and development docking activities, and support the central and western regions to enhance their capacity to undertake industry transfers.

Second, consolidate and enhance the leading position of advantageous industries. Currently, China’s rail transit equipment, shipbuilding and marine engineering equipment, new energy vehicles, photovoltaics, communication equipment, power batteries, rare earth, and other industries are in a leading or even the leading position globally, which is an important sign of China’s manufacturing industry advancing to the high end of the global value chain, and this advantage must be consolidated and utilized well. We need to accelerate the strengthening, extending, and supplementing of supply chains, expand scale advantages, enhance technological advantages, promote upstream and downstream supply and demand docking, and collaborative development, and improve the competitiveness of the entire production chain. Enhance the supply capacity of high-end products, promote high-end applications of rare earth in aerospace, electronic information, new energy, and other fields. Strengthen the innovation and iteration of new technologies and products, pay close attention to disruptive changes caused by new technological breakthroughs, identify risk points, and timely optimize and adjust development strategies. For some areas with the risk of overcapacity, strengthen normative guidance and quality supervision, improve industry concentration, and promote industrial cluster development.

Third, actively cultivate emerging and future industries. Currently, China’s strategic emerging industries account for about 13% of GDP. We need to coordinate technological innovation, large-scale development, and application scenario construction, actively develop new production forces, and strive to seize the high ground of global industrial competition. Cultivate more new pillars and tracks. Make good use of the domestic large market and rich application scenarios, develop and expand emerging industries such as new energy, new materials, and intelligent connected vehicles, promote the large-scale application of Beidou in the communication field and mass consumption field, and actively cultivate new growth points such as biomanufacturing, commercial aerospace, and low-altitude economy. Plan for future industries in advance. Formulate and implement policy documents for cultivating future industries, promote the research and development and application promotion of frontier technologies such as artificial intelligence, humanoid robots, the metaverse, the next-generation internet, 6G, quantum information, deep-sea and aerospace development, and build new advantages for future development.

Fourth, promote artificial intelligence to empower new industrialization. Artificial intelligence is a strategic technology leading the new round of S&T revolution and industrial transformation, which has shown its edge in research and development design, production and manufacturing, and other fields, becoming an important driving force for new industrialization. Vigorously promote the digitalization of industries, develop and expand the core industries of the digital economy, and consolidate the technical foundation of computation, algorithms, models, and data. Adhere to the coordinated promotion of ‘construction, use, and research,’ improve the digital infrastructure and service system of 5G, computing power, and industrial internet, and accelerate the construction of 5G factories. Accelerate the digital transformation of manufacturing, deeply implement the special action for digital empowerment of small- and medium-sized enterprises, and effectively solve the problems of small- and medium-sized enterprises not wanting to transform, not daring to transform, and not knowing how to transform. [We also must] deeply implement the intelligent manufacturing project, vigorously develop intelligent products and equipment, intelligent factories, and intelligent supply chains.

Comprehensively enhancing the overall strength of enterprises, accelerating the construction of world-class enterprises

Reporter: What achievements have we made in comprehensively enhancing the competitiveness of enterprises? What aspects will we focus on next?

Jin Zhuanglong: Enterprises are the leading force in promoting new industrialization, and only strong enterprises can lead to a strong industry. In recent years, the comprehensive strength of Chinese enterprises has significantly improved. This is mainly reflected in: First, the number of enterprises has significantly increased. The number of industrial enterprises above the designated size increased from 344,000 in 2012 to 483,000 by the end of November 2023. The number of small, medium, and micro enterprises in China exceeded 52 million, with high-tech enterprises reaching 465,000, becoming an important source of new technologies, new industries, and new formats. Second, backbone enterprises have accelerated their growth. In 2023, 142 Chinese enterprises entered the Fortune Global 500, ranking first in the world, including 63 manufacturing enterprises. The business revenue of the top 500 Chinese manufacturing enterprises increased to 51.06 trillion yuan, doubling from 2012. Third, specialized and new enterprises have emerged rapidly. More than 103,000 specialized and new small- and medium-sized enterprises have been cultivated, with 12,000 ‘little giants’ and 1,186 manufacturing single champion enterprises.

Next, we need to remove various market barriers, stimulate the vitality of high-quality enterprises and the creativity of outstanding entrepreneurs, and accelerate the construction of world-class enterprises.

First, develop and expand backbone enterprises in the production chain. Adhere to the ‘Two Unwaverings,”¹ leverage the central role of central enterprises in important production chains, and bravely assume the role of ‘chain leader’ in modern production chains. Promote the private economy to grow bigger, better, and stronger, protect the property rights and rights of private enterprises and entrepreneurs according to law, guide private enterprises to stick to their main business, strengthen real industries, and transform dynamics, and consciously follow the path of high-quality development. Support leading enterprises to optimize and integrate production chains, innovation chains, and value chains, and accelerate their emergence as first-class enterprises with ecological dominance and production chain control power.

Second, promote the specialized and innovative development of small- and medium-sized enterprises. Fully implement the Small- and Medium-sized Enterprise Promotion Law, adhere to the balance between management and service, development and assistance, improve the work system, policy and regulatory system, service system, and operation monitoring system for small- and medium-sized enterprises. Build a high-quality enterprise gradient cultivation system, increase support in finance, taxation, talent, intellectual property rights, data, and other aspects, and inspire the emergence of more specialized and newer small- and medium-sized enterprises. Improve the long-term mechanism for preventing and resolving arrears to small- and medium-sized enterprises, and effectively protect the legitimate rights and interests of small- and medium-sized enterprises.

Third, promote the integrated development of large, medium, and small enterprises. Implement the ‘Hand-in-Hand Campaign’ to promote the integrated innovation of large, medium, and small enterprises, guide large enterprises to open up various innovation resources to small- and medium-sized enterprises, share production capacity resources, support and drive the innovation of small- and medium-sized enterprises. Encourage large enterprises to try and use innovative products from small- and medium-sized enterprises first, and promote the introduction and application of supporting products from small- and medium-sized enterprises.