Manufacturing Power Strategy

Abstract

To avoid becoming stuck on the middle rungs of the development ladder, China has embarked on a new and more balanced strategy that assigns a greater role to domestic demand and to improvements in technology innovation capacity, especially in its industrial sectors. The government is pursuing a new strategy through a focus on strategic industries with a high content of innovative technology. The Manufacturing Power Strategy and a range of key policy initiatives incorporated within it are the strategic components of China’s new innovation-focused industrial policy. The Manufacturing Power Strategy is the key element of China’s longer-term strategy aimed at closing the technology gap with advanced economies and deriving more of its growth impetus from higher indigenous-innovation-based productivity. It is still not easy, however, to comprehensively assess whether the industrial policy is accelerating or slowing down the transformation and upgrading of China’s manufacturing industry.