Fri, December 09, 2022

Economic Development: China Intervenes Less in Industries

Wibest Broker-Economic Development: silver and gold knight chess pieces on top of dollar and yuan banknotes

ECONOMIC DEVELOPMENT – Chinese industry minister said on Monday that the country will have lesser intervention in its massive industrial sector. This comes after an obvious scaling back of its high-tech industrial push, which has long been a problem to the United States.

China is also attempting to ease the concerns surrounding its industry policies, which are among the key complaints from the US in the US-China trade war.

According to minister of industry and informational technology Miao Wei, the country will “gradually reduce the government’s micro-management and direct intervention, in order to allow the market to effectively decide resource allocation and support the development of the manufacturing industry.”

The comments came days before the latest round of high profile trade negotiations between Beijing and Washington, in which US officials will visit Beijing on Thursday.

Miao did not mention anything about the so-called “Made in China 2025,” which is an initiative aimed at helping the country catch up with rivals in tech such as semiconductors, artificial intelligence, robotics, and aerospace.

China does not appear to concede to US demands to ease policies on tech companies, according to a report over the weekend. The US has threatened further action if the Asian giant does not change policies covering industrial subsidies and intellectual property, among others.

China’s High-Tech Manufacturing Drive

Wibest Broker-Economic Development: shot inside a Chinese factory workers handling machines

On the other hand, China isn’t slowing down with its high-tech manufacturing campaign as local governments start kicking off programs to help manufacturers become more competitive.

Local governments are pursuing new tech that could spur industrial growth, like new energy vehicles (NEVs) and artificial intelligence.

For instance, Hunan, a southern province, issued a three-year plan for the development of its AI sector, promising more support for a local industry with a size estimated to hit 10 billion yuan ($1.49 million) by the year 2021.

In Henan, a central province, service robots production grew 14.3 times from January  to February on a year-on-year basis, according to data.

During his speech, Miao said that a single person could not decide for something in which a whole supply chain was involved, pertaining to Trump’s wish to put manufacturing jobs back in the US.

“Every company will consider putting its supply chain in a country where costs are relatively lower. This is the purpose of the law of economics,” Miao said. “If, after comparisons are made, the United States has lower costs and possesses advantages versus other countries, I’m sure that a company…will bring its manufacturing back to the United States.”


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