Manufacturing has been the most important driver of economic development.

From the perspective of global cross-section data, countries with a larger proportion of manufacturing are usually stronger in terms of economic growth speed and stability, and the past is often said that “no work is not rich”, which has been the case from the data.

However, the CMF report released recently shows that both developed and developing countries are facing “deindustrialization” – the downward pressure on the share of manufacturing. At present, the global manufacturing value added has an “inverted U” shape, rising first and then falling. From a more specific employment share point of view, when a country’s income development reaches a certain level, the proportion of manufacturing will show a downward trend.

“Industrialization is not only a problem of manufacturing itself, but also causes a series of economic and social consequences.” For example, a downturn in manufacturing will worsen unemployment, quality employment and income distribution problems, and most directly, a slowdown in economic growth.” At the China Macroeconomic Forum (CMF) hot issues seminar, Huang Yanghua, a professor at the School of Applied Economics of Renmin University of China, said.

From around 2012, the proportion of added value of China’s industrial and manufacturing industries also appeared downward pressure, which is also the central government proposed to maintain the stability of the proportion of manufacturing industry is very important background.

In this regard, Huang Yanghua suggested that in response to the downward pressure on the manufacturing industry, the first thing to do is to upgrade the manufacturing industry, make up for the short board of efficiency, improve the bargaining power of products, and further focus on research and development of industries that remain technically leading; On the other hand, many industrial factors should also be adjusted, to shift to non-price competition, at the same time, to cope with the new pricing, expand the global market, “Belt and Road” a large number of cooperation projects and cooperation areas can be divided into countries for manufacturing cooperation, and cooperation with manufacturing powers more emphasis on research and development cooperation. For places with a lower level of development, production capacity, third-party cooperation, and market cooperation can be used to make the connection between the manufacturing industry and the “Belt and Road” more closely.

Beware of the “inverted U” shape

In terms of global data, manufacturing is generally stronger and more stable than major national economies. From a macroeconomic perspective, most of the 17 Sustainable development Goals of the United Nations 2030 need to be supported by manufacturing and industrialization. From the perspective of major countries and average trends in the world, the tax revenue of a large number of countries mainly comes from the manufacturing sector, which still has a strong supporting role for a country’s growth and more macro modernization through economies of scale and efficiency.

“The United States had a ‘deindustrialization‘ process in the early days, and now it is proposed to ‘re-industrialization’ because it recognizes the importance of manufacturing.” In the past, in the process of deindustrialization, with the large-scale outsourcing of manufacturing, not only led to the loss of industrial capacity in the United States, but also there was a kind of innovation resources to move out with the manufacturing industry, which damaged the foundation of the American economy.” Saidi Institute planning Institute director Cheng Nan said.

In China’s 2035 vision goals, there are very clear goals for modernization, including long-term growth needs the support of the manufacturing industry, and scientific and technological self-reliance also needs the linkage between manufacturing and innovation and industrial upgrading.

“A larger proportion of manufacturing can reduce the volatility of economic growth, the volatility of manufacturing is lower than that of services, and in this epidemic, countries with a larger proportion of manufacturing generally have greater economic room for manoeuvre in response to the epidemic.” At the same time, the manufacturing industry itself is an important carrier of national innovation, but also the main area to solve the bottleneck, which is the stability and upgrading of the proportion of manufacturing industry to achieve the goal of innovation country is an important support.” Huang Yanghua said.

However, Cheng Nan also said that the current face is a more complex external environment, making the road to upgrade the manufacturing industry by some squeeze. In recent years, the global industrial chain and supply chain are undergoing profound adjustment, and in this change pattern of great power game, the development of China’s manufacturing industry is facing the two-way squeeze of developed countries and developing countries. In particular, as the Sino-US strategic game intensifies, we can see that the United States and the West have been trying to curb the development of China’s manufacturing industry, especially the advanced technology of high-tech industries, and hinder the pace of China’s industrial upgrading. This will impact the development of China’s manufacturing industry to a certain extent, and it needs to be vigilant.