Modern industrial system is the material and technical foundation of modern countries. Report to the 20th CPC National Congress of the Communist Party of China put forward the important task of building a modern industrial system. The first meeting of the 20th Central Committee of Finance and Economics emphasized the "five persistences" in accelerating the construction of a modern industrial system, namely, persisting in focusing on the real economy, striving for progress steadily and step by step, persisting in the three-time industrial integration and development, persisting in promoting the transformation and upgrading of traditional industries, and persisting in open cooperation. This is an action guide for building a modern industrial system with integrity, advancement and safety in the future.
To build a modern industrial system, we must first accurately grasp the era connotation of this concept. On the whole, the modern industrial system should have at least three main characteristics. One is integrity. Integrity not only refers to the complete industrial categories, but also refers to the complete production capacity of high-end products within the industry. In addition, integrity also refers to adapting to the characteristics of China’s huge population, and the labor-intensive industries are fully developed and can provide sufficient jobs. The second is the advanced nature. Advanced nature not only refers to the high level of production technology and management, but also refers to the strong industrial competitiveness, which can support industrial upgrading under the current situation of two-way extrusion of developed and developing countries in China. In addition, it can also provide high-level factor returns and effectively promote common prosperity. The third is security. Safety means not only being able to achieve a high level of self-reliance without highlighting shortcomings and weak links, but also that key resources such as grain, energy and minerals can meet development needs, and that the industrial system should be environmentally friendly and take the road of sustainable development. Generally speaking, the three characteristics of "integrity, advancement and safety" fully reveal the important connotation and development requirements of modern industrial system.
According to the era connotation of modern industrial system and the current situation of industrial development in China, we need to grasp five important principles to accelerate the construction of modern industrial system supported by real economy.
First, insist on focusing on the real economy and prevent it from being divorced from reality. It is the key to build a modern industrial system to optimize the allocation of production factors and allocate high-quality production factors to the most critical industries. The nature of capital is to flow to the place where the highest return can be obtained, and its sensitive sense of smell can always compare the average profit rate of different industries. This natural profit-seeking, that is, "from the real to the virtual" or "from the virtual to the real" flow valve. It is the real economy that really creates wealth for the society, creates more jobs and opens up the track of scientific and technological innovation. The real economy is the foundation of the country and is of great significance to maintaining long-term economic prosperity and social stability. China started from the real economy, and it also depends on the real economy to move towards the future. At any time, we can’t "break away from reality". The most fundamental thing is to make the real economy grow stronger and make the manufacturing industry, especially the advanced manufacturing industry, profitable and promising.
To prevent the reality from becoming illusory, we must first effectively improve the benefits of the real economy and enhance its attractiveness to factors such as funds and talents. Manufacturing industry is the main industry participating in international competition and the core of the real economy. In order to comprehensively improve the efficiency level of manufacturing industry, we should not only attach importance to the "addition" policy, support and guide enterprises to strengthen innovation, develop with specialization and novelty, and enhance the differentiation of products and services, but also combine the "subtraction" measures, especially to guide low-quality and inefficient enterprises to withdraw from the market in time, shape a reasonable competitive market structure, and supplement it with the policy of expanding demand to improve pertinence and directness. Secondly, while strengthening "reality", we must also make up "emptiness". In the financial field, it is necessary to improve the diversified and efficient financial service system and guide finance to better play its role in serving the real economy. It is necessary to further deepen systematic, institutional and rule-of-law reforms, gradually and steadily solve the obstacles that affect the stability and healthy development of the capital market, so that abundant social funds can be more effectively invested in the real economy and provide more solid industrial support for high-quality development.
Second, we should persist in striving for progress steadily and step by step, and we should not be greedy for foreign countries. Building an advanced modern industrial system does not mean that all localities should develop high-tech industries at the same time. Emerging industries, high-tech industries and major projects are growing rapidly and have good development prospects, which have a great pulling effect on the local economy, and often become the focus of attention in various places. However, it is also easy for all places to rush headlong into the herd and compete excessively, and a few places succeed, while most places invest a lot but fail to achieve benefits. Although some places or cities have succeeded in developing high-tech industries by leaps and bounds, they do not have simple replication, and blindly launching projects without considering the actual situation may produce fallacy of composition. To implement the requirements of striving for progress steadily and step by step, the core is to give full play to the different roles of the market and the government in industrial development. Local governments need to formulate industrial development plans to clarify and guide the upgrading and development of local industries, but the focus should be on constantly improving market supervision, strengthening services to enterprises, strengthening planning guidance and shaping a better business environment. Enterprises are the main body of investment decision-making and self-financing. The government can’t take the place of independent decision-making by enterprises, and it can’t attract projects with so-called preferential subsidies for "assessing performance".
The third is to adhere to the integration and development of three industries and avoid separation and opposition. There is an inherent balance among the three industries, so we can’t unilaterally emphasize the development of any one industry. China is a unified big market, where goods and services circulate efficiently and help each other, and the industrial development of each region should mainly follow the principles of comparative advantage and efficiency priority. From various places, we should neither unilaterally pursue the proportion of tertiary industry and simply implement "retreat from two to three", nor unilaterally emphasize the proportion of manufacturing industry and inhibit the development of service industry. At present, we should pay more attention to the new trend of the integration and development of various industries. With the rapid development of the new generation of information technology and digital technology, its empowerment effect on various industries is more significant, and the traditional boundaries between many industries are also blurred. For example, in many typical manufacturing enterprises, the value-added from R&D, design, brand image, after-sales and other service links has greatly exceeded the manufacturing link. The deep integration of modern service industry with advanced manufacturing industry and modern agriculture has become an important direction of industrial upgrading. In guiding industrial development, all localities should fully consider the inherent requirements of the integrated development of local pillar industries, upstream and downstream industries and related industries, and reserve sufficient space and resources for the development of related industries.
Fourth, we should persist in promoting the transformation and upgrading of traditional industries and should not simply quit as "low-end industries". Traditional industries are the base of modern industrial system, and the transformation and upgrading of traditional industries are directly related to the overall construction of modern industrial system. In the process of building a modern industrial system, China must always attach importance to the development of traditional industries. This is the requirement of maintaining and enhancing China’s industrial competitiveness. At present, China’s traditional low-cost advantages are weakening, and the establishment of competitive advantages such as technology and brand is not achieved overnight. The complete industrial system and strong supporting capacity are important sources of China’s industrial international competitiveness for a long time. The simple withdrawal of traditional industries will directly damage China’s industrial integrity, reduce its supporting capacity and ultimately weaken China’s international competitiveness. At the same time, the new round of scientific and technological revolution and industrial transformation has also brought new opportunities to improve the efficiency and international competitiveness of traditional industries. Many traditional industries can become advanced manufacturing industries after transformation and can have a longer development period. To promote the transformation and upgrading of traditional industries, we should continue to increase support for the digital intelligence and green transformation of traditional manufacturing industries, and solve the problems of low profit margin and weak self-upgrading ability of traditional industries; In the process of promoting industrial transformation and upgrading, local governments should attach great importance to the development of traditional industries with cluster effect, provide support and guarantee for the development of these traditional industries, and prevent simplification from retreating.
The fifth is to adhere to open cooperation and not build a car behind closed doors. Persisting in opening to the outside world is an important experience of China’s rapid economic development in the past. Through "bringing in" and "going out", China not only introduced important capital and technology, but also participated in competition and learning in the global market, which promoted the product quality and competitiveness. Continuous open cooperation is an inherent meaning of building a modern industrial system and an inevitable requirement for achieving high-quality development. It should be clearly seen that the key core technologies can’t wait or not, and the key links of the industrial chain and supply chain must be mastered by China itself, but we can’t take the old road of closed development. Only by adhering to a high level of opening to the outside world and always keeping the domestic market fully open to domestic and foreign enterprises can we deeply participate in the global industrial division and cooperation, maximize the absorption of foreign advanced achievements, accelerate the pace of innovation, give full play to China’s super-large-scale market advantages and strive for a better external environment, and also better expand the potential of external demand, promote industrial upgrading and better build a modern industrial system.
(Author Xu Zhaoyuan is the deputy director and researcher of the Industrial Economics Research Department of the State Council Development Research Center. Source: Economic Daily)
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