Social Sciences in China (Chinese Edition)

No.5, 2021

 

The Manufacturing Sector’s Strategic Position and Role in China’s New Stage of Development

(Abstract)

 

Guo Kesha and Peng Jizong

 

Industrial evolution has ushered in a high-quality developmental stage for manufacturing industry in China’s new stage of development. In the middle-income period of an economy, the growth in GDP and Total Factor Productivity (TFP) of the entire economy is generally driven by the rapid growth of manufacturing value-added and TFP. This has been the major factor for the smooth entry into high-income stage for a large economy. Based on the historical experience of the average share of manufacturing of the high-income large countries in their end period of middle-income stage with a relatively high quality economic development, and taking into account the adjustment effect of integrated development of manufacturing and services on changes in industrial structure, we argue that around the period when China enters the high-income stage, the share of manufacturing in GDP should remain between 28 percent and 30 percent. In their middle-income stage, other large countries had all implemented development strategies and promotion policies for their manufacturing sector. Drawing on this experience, China should strengthen its policy guidance for manufacturing development during the 14th Five-Year Plan period, study and formulate medium-and long-term strategic plans to promote the development of manufacturing, so that a middle or high speed growth can be maintained with the support of its high quality development.