Promoting High-Quality Development Throughout the Process of New Industrialization

Industrialization is the fundamental prerequisite, the driving force, and the core essence of modernization. It is a necessary journey all countries and nations must take to achieve prosperity and strength. Committed to a path of new industrialization with Chinese characteristics, we must speed up efforts to boost China’s strength in manufacturing, in order to better facilitate the creation of a new development dynamic, promote high-quality development, and ultimately advance the course of Chinese modernization.

I. Strategic significance of new industrialization in the new era and new journey

Industrialization refers to the economic development process of a country or region, typically characterized by technological advancements and industrial structure upgrades, which leads to continual increases in per capita national income. In the mere decades following the founding of the People’s Republic of China in 1949, and particularly after the initiation of reform and opening up which began in 1978, China completed the process of industrialization that took developed countries several centuries. In doing so, it has created the miracles of rapid economic development and long-term social stability and laid robust material and technological foundations for modernization.

As a development path, new industrialization is characterized by its mutual reinforcement with informatization, a high level of science and technology, strong economic returns, minimal resource consumption, limited pollution, and the full utilization of human resource advantages. Being a latecomer that is playing catch-up, China cannot simply replicate wholesale the traditional industrialization path of “mechanization, then informatization” and “pollute first, clean up later.” Instead, it must follow a green and sustainable path that is well-integrated with the informatization process.

New industrialization was put forward based on a profound understanding of the laws governing global industrialization, the trends of the times, as well as China’s basic national conditions and characteristics. When advancing industrialization in a large developing country like China, home to over 1.4 billion people, it is essential to adhere to the general laws governing global industrialization. But it is perhaps more important to pursue a new type of industrialization that takes account of the national conditions and characteristics of China.

An assembly workshop at a driverless car manufacturing enterprise in Anyang County, Henan Province, September 8, 2023. PHOTO BY XINHUA REPORTER LU PENG

Since the 18th National Congress of the Communist Party of China (CPC) in 2012, President Xi Jinping has put forward a series of important conclusions on a range of major theoretical and practical issues regarding new industrialization and has advanced a number of new ideas, viewpoints, and statements.

He has noted, “Chinese modernization is very different from the modernization of Western developed countries. Those countries followed a phased process of development, with industrialization, urbanization, agricultural modernization, and informatization each following the other in succession, to reach their current level after more than 200 years. We are latecomers seeking to make up for those ‘lost two hundred years.’ This determines that China must follow a simultaneous process of development in which industrialization, informatization, urbanization, and agricultural modernization overlap.” President Xi has also stressed that “As China is a large country, we must develop the real economy, continuously promote industrial modernization, and upgrade the manufacturing sector.” “On the industrial front,” he has said, “the Chinese dream is specifically about accelerating new industrialization.” And he has stated, “In pursuing economic growth, we must continue to focus on the real economy and advance new industrialization.”

President Xi has also put forward certain requirements: “Digital technology and the digital economy represent not only a decisive opportunity in the scientific and technological revolution and industrial transformation, but also a major field of international competition. We must grasp the opportunities on offer and seize the initiative for future development.”“We must continue to promote integration between informatization and industrialization and accelerate the digital, network-based, and intelligent development of manufacturing.”

An ocean thermal energy electricity generation device aboard the vessel Ocean Geology II, during preparations for an offshore test, July 23, 2023. XINHUA / PHOTO BY XI XIAOQIAN

On a new journey in the new era which started in 2012, new industrialization has acquired new implications and features. On the one hand, we find ourselves in a period marked by accelerating changes unseen in a century in the world. The new round of scientific and technological revolution and industrial transformation is in full swing, with profound adjustments unfolding in the global industrial, supply, and value chains. Major countries are engaged in intensifying competition to determine the layout of manufacturing and develop advanced manufacturing technology. Developed countries are proactively making plans for forward-looking technologies and industrial sectors, and profound shifts are sweeping the global industrial landscape and its technological foundations. To advance new industrialization, it is imperative to proactively adapt to and steer the trends of digitalization and green development in order to retain the initiative in development. On the other hand, the core task of the CPC is to realize national rejuvenation through Chinese modernization. The process of new industrialization thus needs to be advanced in line with the theoretical and practical requirements of Chinese modernization—which are the modernization of a huge population, of common prosperity, of material and cultural-ethical advancement, of harmony between humanity and nature, and of peaceful development.

In the present context, the feature “new” in China’s industrialization will be manifested in the following ways: seizing the initiative by relying on innovation-driven development to more quickly move to the middle and high end of the global value chain; strategically coordinating the processes of new industrialization, informatization, urbanization, and agricultural modernization; promoting industrial modernization based on full integration of the digital and real economies and accelerated green and low-carbon development; pursuing opening up that gives full play to the strengths of China’s vast domestic market and utilizes both domestic and international markets and resources; and realizing inclusiveness by accelerating the construction of a modernized industrial system to promote common prosperity. On a fundamental level, the new industrialization we are pursuing on a new journey in the new era satisfies the new requirement for high-quality development.

Without a solid material and technological foundation, it will be impossible to build a great modern socialist country. Chinese modernization must ensure common prosperity for almost 20% of the global population. To achieve this, we must continually enhance the material and technological conditions for improving people’s lives, keep our focus on the real economy when pursuing economic growth, and accelerate the process of new industrialization.

China aims to basically achieve new industrialization by 2035. The next ten years or so will essentially serve as a sprint for China as it strives to build a modern industrial system, create a new development dynamic, and basically achieve modernization. This will also be a critical window for breakthroughs and innovations in science, technology, and industry. The next decade will thus present both unique opportunities and formidable challenges for new industrialization. Our ability to effectively accomplish new industrialization and lay a strong material and technological foundation for Chinese modernization will have a great bearing on whether we can gain the strategic initiative in future development and international competition and realize national rejuvenation.

II. Advancing new industrialization based on the requirement for high-quality development

High-quality development is an essential element of Chinese modernization and the primary task in building a modern socialist country. To advance new industrialization in the new era and promote high-quality development throughout the new industrialization process, we must do the following: adhere to a people-centered philosophy of development; fully and faithfully apply the new development philosophy on all fronts; ensure both development and security; and follow a path of new industrialization with Chinese characteristics.

Innovative development as the primary driver

With a strong grasp of the trajectory of the new round of scientific and technological revolution and industrial transformation, which is characterized by digitalization and green development, we must achieve greater self-reliance and strength in science and technology. We should fully leverage the advantages of the new system for pooling resources nationwide under the conditions of the socialist market economy and strengthen the supply of domestically developed advanced technological factors. We should push forward core technology research projects in key fields such as new-generation information technology, biotechnology, new energy, and new materials, ensure the full integration of digital technology with the real economy, advance green and low-carbon industrial development, and promote integrated, high-end, digital, and green manufacturing. We should carry out industrial foundation reengineering projects and research projects on major technologies and equipment to address shortcomings in core, critical, and basic capabilities. All these efforts will ensure faster progress in building China’s strength in manufacturing, product quality, aerospace, transportation, cyberspace, and digital development.

Coordinated development as an inherent requirement

The processes of new industrialization, informatization, urbanization, and agricultural modernization must go hand in hand, with efforts being made to resolve development imbalances and inadequacies in industrialization. The development of the real economy should be well-coordinated with scientific and technological innovation, modern finance, and human resources, so as to generate a virtuous cycle between the spheres of science and technology, industry, and finance. We should push ahead with developing new forms of infrastructure to make faster progress in building a modern industrial system underpinned by the real economy and ensure coordination between strategic emerging industries, pillar industries, and traditional industries. We need to optimize the distribution of major productive forces based on the defined roles of major functional zones, boost coordinated regional development, and keep working to improve the functions and layout of new and high-technology parks and industrial parks. To develop industry clustering and integration, we should establish several internationally competitive clusters for advanced manufacturing and digital industry.

Green development as the universal form

Focusing on the goals of carbon peaking and carbon neutrality, we must work to build a resource-conserving and environmentally-friendly industrial system. We need to accelerate the transition toward green development, taking coordinated steps to reduce carbon emissions, limit pollution, expand green development, and promote economic growth. We should prioritize ecological protection, conserve resources and use them efficiently, and pursue green and low-carbon development. With a keen focus on making breakthroughs in green and low-carbon technology, we need to develop a green and low-carbon industry. We should seize the energy revolution and green manufacturing as key opportunities to build a modern green and low-carbon energy system centered on new energy and a modern industrial system centered on green manufacturing. Improvements should be made to the system for market-based allocation of resources and environmental factors to encourage green consumption, spur the transition to green production and consumption on all fronts, and promote green and low-carbon modes of production and lifestyles.

Open development as the essential approach

We should build a fully open industrial system that creates mutual benefits and is diverse, well-balanced, secure, and efficient. Playing an extensive role in the global industrial division of labor and industrial cooperation, we should keep working to develop new strengths for international economic cooperation and competition. We should strengthen the links between domestic and international markets and resources, enabling our domestic economy to generate a strong gravitational pull for global production factors and resources, a greater competitive edge for intense international competition, and powerful momentum for the allocation of global resources. We also need to enhance institutional opening up in terms of rules, regulations, management, and standards. We should strengthen connectivity with countries under the Belt and Road Initiative with regard to markets, rules, and standards, deepen the BRICS partnership on the new industrial revolution, and promote cooperation among BRICS countries in the areas of digitalization, industrialization, innovation, inclusiveness, and investment.

Shared development as the fundamental goal

To see the gains of new industrialization benefit all our people fairly, we should ensure seamless integration between new industrialization and the long-term endeavor of achieving common prosperity. In the course of advancing new industrialization, we must take care to avoid polarization in income distribution. When pursuing technological innovation and advanced manufacturing, we need to take account of both environmental and social effects. We should promote full integration of the digital and real economies and use the digital economy as a means to bridge the growing digital divide with Western developed countries. We should reduce the income gap by promoting high-quality employment, and ensure that new industrialization is innovation-driven, sustainable, and inclusive. In the process of advancing new industrialization, we must work toward realizing modernization that will deliver common prosperity for all.

As our world undergoes changes unseen in a century, unilateralism and protectionism are clearly on the rise and the world has entered a new period of turbulence and change. For its part, China has entered a period of development in which strategic opportunities, risks, and challenges are concurrent and uncertainties and unforeseen factors are rising. To promote new industrialization, we must ensure both development and security, enhance our awareness of risks, and keep in mind worst-case scenarios. These also constitute the requirements for high-quality development. We need to coordinate industrial development and security and promote both open development and economic security. While advancing new industrialization, we should actively explore effective paths for enhancing national industrial security under the conditions of an open economy. Keeping in mind worst-case and extreme scenarios, we should accelerate research and development for core technologies in key fields, advance efforts to upgrade our industrial foundations and modernize industrial chains, and effectively strengthen industrial chains to shore up weaknesses and maintain stable operation. We should carry out industrial competitiveness surveys and industrial security assessments in key sectors to improve the industrial security management system. It is particularly important to establish a management system for ensuring the security of industrial and supply chains that features clearly defined powers and responsibilities and close interdepartmental collaboration. We must see that industrial security policies play a stronger guiding and coordinating role in the formulation and implementation of microeconomic policies, such as manufacturing development planning, major science and technology programs, and anti-monopoly measures.

III. Accelerating new industrialization with a focus on building China’s manufacturing strength

The development of modern manufacturing is both the driving force and an important symbol of industrialization. As the world’s largest manufacturing nation, China is the only country in the world to possess all industrial sectors listed in the United Nations’ International Standard Industrial Classification of All Economic Activities (ISIC). Yet, when compared with the world’s industrial powerhouses, China needs to strengthen its scientific and technological innovative capacity and foundational manufacturing capabilities. It still depends on others for some core technologies, and the overall technological level and the security of its industrial sector need to be elevated. For China to realize new industrialization, it is crucial that we promote the high-quality development of manufacturing and see China moving from a manufacturer of quantity to one of quality.

Regarding industrial and supply chains as the foundation of manufacturing strength and building autonomous, controllable, safe, and reliable industrial and supply chains

Global economic competition today involves not only enterprises and industries but also industrial and supply chains. Threats to a country’s industrial security primarily stem from disruptions and bottlenecks in global industrial and supply chains. Against a backdrop of accelerating changes unseen in a century in the world, a new round of scientific and technological revolution and industrial transformation is unfolding at pace. To advance new industrialization and move faster in strengthening manufacturing, China must bolster the resilience and security of its industrial and supply chains.

A reversible pump turbine generator in an underground cavern, Chengde, Hebei Province, August 19, 2023. It is part of Fengning Pumped Storage Power Station under the State Grid Xinyuan Group. PHOTO BY XINHUA REPORTER LI HE

This will necessitate efforts to upgrade the industrial foundation and modernize industrial chains. Focused on key industrial and supply chains, we must address bottlenecks in the development of key and core technologies and components and fully carry out industrial foundation reengineering projects and research projects on major technologies and equipment. We should focus on developing a new generation of information technology, biotechnology, and artificial intelligence (AI), and strive to pioneer breakthroughs in high-end chips, operating systems, new materials, and major equipment.

Enhancing innovative capacities in manufacturing and continuing to upgrade the industrial structure

We should reinforce the primary role of enterprises in scientific and technological innovation, champion the spirit of outstanding entrepreneurs, and encourage enterprises to invest more in innovation. We need to cultivate more world-class enterprises featuring excellent products, outstanding brands, cutting-edge innovations, and modern management practices, and continue to expand the ranks of firms that use sophisticated technologies to produce novel and unique products. To enhance China’s scientific and technological capabilities, we should step up basic research, fully leverage the advantages of the new system for pooling resources nationwide, and intensify applied basic research. Fully integrating the innovation, industrial, capital, and human-resource chains, we need to adopt a more demand- and scenario-driven approach and develop a number of national manufacturing innovation centers, pilot-scale experiment platforms, and validation platforms for technological applications, and open, coordinated, and highly efficient research platforms for generic technologies.

We should move faster in developing advanced manufacturing and strategic emerging industries and make a strong push to develop the modern producer services sector. We must see that the modern services sector is fully integrated with advanced manufacturing and modern agriculture, promote the integration and clustering of strategic emerging industries, and create a number of advanced manufacturing clusters with international competitiveness. Steps should be taken to speed up the transformation and upgrading of traditional industries, promote the intelligent and digital transformation of traditional manufacturing, and consolidate and upgrade industries where we excel. We must continue to improve the quality of Chinese products and cultivate world-famous brands.

Concentrating on intelligent and green manufacturing and advancing the digital and green transition in industry

To advance digitalization, we must push toward the full integration of digital technology with the real economy, harness digital technology to empower the transformation and upgrading of traditional industries, and promote the digitalization of the industrial economy, with a focus on intelligent manufacturing. We should use digital technologies to spur the formation of new industries and new forms and modes of business, encourage the sound development of the platform economy and the sharing economy, and promote the industrialization of the digital economy. We should continue to implement intelligent manufacturing projects and special initiatives to digitally empower small and medium-sized enterprises, promoting the innovative application of AI. To accelerate the development of a modern infrastructure system, we should promote new forms of infrastructure through effective investment and continue to build cyber, computing, and other new-type information infrastructure moderately ahead of time. Moves should also be made to accelerate the scaled application of the Industrial Internet and enhance cybersecurity capabilities.

To promote green development, we should advance the all-around green industry, putting in place a green manufacturing system with a core focus on developing green products, building green factories, establishing green industrial parks, and creating green supply chains. Strides should also be made in enhancing environmental supervision. We should further implement green manufacturing projects to accelerate the green transformation and upgrading of manufacturing. We must see that environmentally friendly designs, technologies, processes, production, management practices, supply chains, and employment practices are used throughout the product lifecycle. To promote carbon peaking in key industries, we should accelerate the R&D and application of energy-saving and carbon-reducing technologies, encourage the consumption of green and low-carbon energy, and promote the efficient recycling of resources. We must vigorously develop the resource reutilization and remanufacturing industries and properly manage the recycling and utilization of waste resources such as used batteries from electric vehicles.

Ensuring smooth economic flows and spurring a transformation in quality, efficiency, and growth drivers

On the one hand, we must put the focus on the domestic economy with a view to fostering a complete domestic demand system. We must address the bottlenecks and difficulties hindering the development of a unified national market and promote the free circulation of production factors and resources for manufacturing. We should take steps to resolve key issues affecting the supply of high-level technologies and institutional supply, create and steer new demand through the development of a complete domestic demand system, and increase the supply of high-quality products and services to boost the efficiency with which production factors are allocated in manufacturing. We should promote coordinated development between urban and rural areas and between regions to expand the coverage of economic flows. We should guide the rational layout of industries through the functional zoning strategy and the new urbanization strategy. And we should give full play to the roles of various parks and zones, including those for new and high technologies and for industries, in order to drive the formation of a regional manufacturing layout that leverages the complementary advantages of respective regions and propels high-quality development.

On the other hand, we must work to promote interplay between the domestic and international economies. Making good use of both domestic and international markets and resources, we should create more development opportunities for manufacturing through high-standard opening up and strongly support enterprises in expanding into international markets. We should encourage more investment of foreign capital in advanced manufacturing and new and high technology sectors, continue to provide good services and support to foreign-funded enterprises, and gradually create an open environment for technological innovation. We should give more importance to the role of pilot free trade zones in promoting the high-quality development of manufacturing and work to develop these zones into high-level bases for independent innovation, hubs for the convergence of high-quality production factors, and testing grounds for high-standard rules.

Huang Qunhui is Director and Research Fellow at the Institute of Economics and Research Fellow at the Research Center for Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, Chinese Academy of Social Sciences.

Originally appeared in Qiushi Journal, Chinese edition, No. 20, 2023