China pushes hi-tech factories to reassert manufacturing dominance and avoid the ‘middle income trap’
- The Chinese government is supporting R&D efforts for advanced manufacturing, bringing more automation and robots to the factory floor
- Beijing worries the economy could shift to services too quickly and aims to keep manufacturing above 25 per cent of GDP, similar to South Korea
The robot’s Tianjin-based maker has received tax breaks and government-guaranteed loans to build products that modernise China’s vast factory sector and advance its technological expertise.
“The government is paying great attention to the manufacturing sector and the real economy – we can feel that,” said Ren Zhiyong, general manager of Tianjin Langyu Robot Co, as he gave Reuters a guided tour of his plant.
China is backing R&D efforts by hi-tech manufacturers like Langyu, driven by an urgent desire to reduce reliance on imported technology and reinforce its dominance as a global factory power, even as it cracks down on other parts of the economy.
Beijing’s pivot puts the focus on advanced manufacturing, rather than the services sector, to steer the world’s second-largest economy past the so-called “middle income trap”, where countries lose productivity and stagnate in lower-value economic output.
“Pressure is the driving force, and without pressure, it is difficult for companies to develop,” said Ren.
