First, how do you view the proportion of manufacturing

At present, we have some misunderstanding about industrial structure, it is necessary to clarify.

1. Manufacturing power is not equal to the share of manufacturing, which will not lead to an increase in the share of manufacturing, but to a decline in the share of manufacturing. For a while, the goal of making China strong in manufacturing was interpreted by all sectors of society, including experts and local governments, as increasing the share of manufacturing. In reality, however, a strong manufacturing country will not increase its manufacturing share, but decrease it.

There are two reasons for this. First, the stronger the manufacturing industry is, the more its added value comes from producer services, especially R&D, design, consulting, finance and trade, because the service industry enables the manufacturing industry. Second, the result of creating a strong country is to make the country strong and the people rich, and when people’s income level rises, they will certainly consume more and more services with the upgrading of consumption.

3BSE018100R1 PM860K01

3BSE018100R1 PM860K01

3BSE018100R1 PM860K01

2. There is no premature deindustrialization in China, and the proportion of service industry in China is relatively low. From the perspective of international comparison, with the improvement of economic development level, the proportion of service industry in GDP of developed countries is gradually increasing. If you look at the trend of China, the proportion of service industry is also increasing over time. However, compared with the path taken by other countries, at any given stage of economic development, the proportion of service industry in China has always been low in the historical period.

The low share of services is due to a combination of factors, such as local governments’ preference for large, easily taxed and seemingly advanced manufacturing industries, while services are seen as bringing in large numbers of migrants and placing a heavier burden on the government to provide public services; Population flow is not smooth, so that a large number of people are still trapped in the relatively low population density, not conducive to the development of the service industry in small towns and rural areas; A large number of migrants have failed to become citizens in the places of migration. They prefer to send money to their hometowns rather than spend money in the cities where they live, especially to increase their consumption of services.

In China’s financial system, the real interest rate is low for a long time, and the indirect financial system mainly needs mortgage for loans, which is more conducive to the development of the manufacturing industry with high capital intensity and more collateral, but not conducive to the development of the service industry. China also has a large number of controls in the service sector, including the entry of private capital into the service sector.

In recent years, China has experienced an inflection point of increasing the proportion of manufacturing to decreasing, which is considered to be premature deindustrialization. In this regard, it should be noted that there was a time when China’s manufacturing industry had overcapacity and relied on exports to absorb its manufacturing capacity. Therefore, the apparent “premature” decline in manufacturing capacity is actually due to China’s adjustment of overcapacity reduction in manufacturing industry and gradual adjustment to the normal economic structure.