Facing the high-quality development of China's manufacturing industry in 2035

Liu Yong

Published in China Economist Issue 01, 2021

summary

Since the founding of New China more than 70 years ago, the development of the manufacturing industry has made remarkable achievements, the scale of development is the first in the world, the innovation ability has been significantly improved, the industrial structure has been continuously optimized, the high-quality enterprises have risen rapidly, and the level of openness has been continuously improved, thus forming an important support for accelerating the process of industrialization and modernization of the mainland, enhancing international competitiveness, and building a world power. The Fifth Plenary Session of the Nineteenth Central Committee of the Communist Party of China proposed that by 2035, "basically realize the new industrialization, informatization, urbanization, agricultural modernization, and build a modern economic system", which requires that we must firmly grasp the main line of supply-side structural reform and adhere to the real economy as the main direction of attack. From the perspective of the manufacturing industry, it is to adhere to the core position of innovation in the overall development, accelerate the development of advanced manufacturing, promote the transformation and upgrading of traditional industries with greater efforts, pay attention to improving the stability and competitiveness of the industrial chain supply chain, and vigorously enhance the vitality and development capabilities of market players. On this basis, this paper puts forward countermeasures and suggestions for promoting the high-quality development of the manufacturing industry and building a manufacturing power in 2035 from the perspective of relying on super-large-scale market advantages to drive transformation and upgrading, giving full play to the advantages of the new national system to build a manufacturing innovation system, deepening the reform of the market-oriented allocation of factors, stimulating and promoting entrepreneurship, and creating new advantages in international cooperation and competition with a high level of opening up.

keyword

2035; manufacturing developments; new requirements

Contact: Liu Yong [email protected]

Fund Project: This paper is a phased result of the Innovation Project of the Chinese Academy of Social Sciences "Research on Industrial Integration and Promoting the Optimization and Upgrading of the Economic System" (GJSCX2021-02) and the Strategic Advantage Discipline (Industrial Economics) of the Chinese Academy of Social Sciences.

The Fifth Plenary Session of the Nineteenth Central Committee of the Communist Party of China proposed that by 2035, a new type of industrialization, informatization, urbanization and agricultural modernization should be basically realized, and a modern economic system should be built. This undoubtedly puts forward higher requirements for the high-quality development of the manufacturing industry, which is the foundation of the founding of the country, the instrument of national rejuvenation, and the foundation of a strong country. Building a manufacturing system with global standards is the only way to enhance the country's comprehensive national strength and core competitiveness, ensure national security and promote sustainable development. In the new era of building socialism with Chinese characteristics, adhering to the road of new industrialization with Chinese characteristics, accelerating the construction of a manufacturing power, and accelerating the development of advanced manufacturing are of special significance to realizing the Chinese dream of the great rejuvenation of the Chinese nation.

First, the development status and achievements of China's manufacturing industry

Since 1949, the development of the mainland manufacturing industry has made remarkable achievements, realized the transformation of "from small to large", and become the world's largest manufacturing country. The output of major industrial products has jumped sharply, and it currently has the world's most complete industrial system and continuously enhanced scientific and technological innovation capabilities, the industrial structure continues to be optimized and upgraded, and the comprehensiveness, coordination and sustainability of economic development are continuously enhanced, thus forming an important support for accelerating the process of industrialization and modernization of the mainland, enhancing international competitiveness, and building a world power.

First, the scale of development is the largest in the world. In 2019, the added value of the mainland manufacturing industry reached 26.9 trillion yuan, equivalent to 28.1% of the total added value of the global manufacturing industry, and has occupied the first place in the world for ten consecutive years. The mainland has become a country with all the industrial categories in the United Nations Industrial Classification, and the output of more than 200 kinds of industrial products ranks first in the world, of which the output of air conditioners, color televisions, refrigerators, and washing machines has occupied more than 50% of the global market share; the output of automobiles and new energy vehicles occupies more than 30% and 50% of the global market share respectively. It has cultivated a number of manufacturing clusters with significant influence in the world and plays an indispensable and important role in the international industrial division of labor.

Second, the ability to innovate has been significantly enhanced. From the perspective of mainland funding, in 2019, the mainland's research and experimental development (R&D) expenditure reached 2.21 trillion yuan, an increase of 12.5%, the growth rate was 0.7 percentage points faster than the previous year, and double-digit growth was achieved for four consecutive years; the intensity of R&D funding investment was 2.23%, an increase of 0.09 percentage points over the previous year. Among them, the internal expenditure of R&D funds of manufacturing industries above designated size accounted for 1.43% of the main business income, an increase of 0.48 percentage points compared with 2015, and the expected target of the "13th Five-Year Plan" was exceeded ahead of schedule (1.26%); a manufacturing innovation network with 17 national manufacturing innovation centers as the core and more than 100 provincial manufacturing innovation centers as the supplement was built. A number of key technologies and products have made major breakthroughs, such as the "Chang'e" moon, the "Fat Five" flying sky, the C919 large passenger aircraft materials, flat panel display substrate glass, etc. to achieve breakthroughs, the pace of science and technology into actual productivity has been significantly accelerated, which has effectively promoted industrial transformation and upgrading. According to the World Intellectual Property Organization's "Global Innovation Index", the mainland innovation index ranking in 2020 has risen from 29th in 2015 to 14th, and significant progress has been made in scientific and technological innovation; the contribution rate of scientific and technological progress to economic growth has reached 59.5%.

The third is the continuous optimization of the industrial structure. Since the Eighteenth National Congress of the Communist Party of China, the mainland has adhered to the supply-side structural reform as the main line, the intensity of industrial restructuring has been continuously increased, the form of industrial organization has been continuously optimized, and the real economy represented by the manufacturing industry has made great progress. The steel industry completed the "13th Five-Year Plan" target of 150 million tons of capacity two years ahead of schedule; in 2019, the capacity utilization rate recovered to 80.0%, rising to the highest level in the past seven years. The pace of digital transformation in manufacturing has accelerated significantly. According to statistics, in June 2020, the penetration rate of digital R&D and design tools in key areas of manufacturing in mainland China was 71.5%, an increase of 14.8 percentage points compared with 2015; the numerical control rate of key processes was 51.1%, an increase of 3.8 percentage points compared with 2015. The development momentum of emerging industries is strong, and the growth rate continues to be faster than the overall economic growth rate. During the period from 2016 to 2019, the average annual growth rate of the added value of the mainland's high-tech manufacturing industry reached 11.2%, which was significantly higher than the average growth rate of 6.0% of all industries, and the proportion of the added value of industries above designated size increased from 11.8% in 2015 to 14.4% in 2019; the proportion of the added value of equipment manufacturing industry in the added value of industries above designated size also increased by 0.7 percentage points, rising to 32.5%. Emerging industries are becoming the main force driving the development of manufacturing.

Fourth, the rapid rise of high-quality enterprises. Along with the rapid development of the manufacturing industry, a number of enterprises with outstanding innovation ability, great leading role, good development potential, and strong international competitiveness have emerged in emerging industries such as information and communications, rail transit, and new energy vehicles, as well as a large number of "specialized, special, and new" small giant enterprises and single champion enterprises with strong professional capabilities and levels in market segments and fields. These enterprises have become leaders in various fields of manufacturing industry in terms of production scale, research and development level, management ability and market expansion, and play an active role in the global market. In 2020, there were 124 companies in the mainland that were selected as the "Fortune Global 500", of which 38 were mainly engaged in manufacturing, ranking first in the world. Among the top 500 most valuable brands in the world in 2020, 18 manufacturing brands in the mainland are on the list. In the list of the top 100 enterprises in the global digital economy released by Forbes in 2019, 14 companies from the mainland are on the list.

Fifth, the level of openness has been continuously improved. General Secretary Xi Jinping has stressed many times that "reform and opening up is China's basic national policy and the fundamental driving force for promoting China's development." In recent years, the mainland has implemented a new round of high-level opening up, promoting the formation of a new pattern of comprehensive opening up, and the manufacturing industry is entering a new period of comprehensive opening up and full integration into the global economic system. At present, the access to foreign investment in the general manufacturing industry has been liberalized in an orderly manner, the restrictions on the share ratio in automobile, shipbuilding, and aircraft-related fields are gradually being abolished, and high-speed rail, nuclear power, and satellites have gone abroad in a systematic manner. According to statistics, in 2019, the mainland has exported industrial products to 200 countries or regions around the world, and the export volume accounts for about 71% of the mainland's total exports. In the World Bank's Doing Business 2020 report, which is based on 190 economies around the world, China ranked 31st, up 15 places from the previous year.

Second, the new requirements for China's manufacturing industry in 2035

From building a moderately prosperous society in an all-round way in 2020 to basically realizing socialist modernization by 2035, and then to comprehensively building a socialist modern power in the middle of the 21st century, it is a major strategic arrangement made by the Party Central Committee for the development of socialism with Chinese characteristics in the new era. Facing the goal of basically realizing the "new four modernizations" by 2035 put forward by the Fifth Plenary Session of the Nineteenth Central Committee of the Communist Party of China, we must unswervingly promote the construction of a manufacturing power, a quality power, a network power, and a digital China, firmly grasp the main line of supply-side structural reform, adhere to the principle of doing solid and strong and optimizing the real economy as the main direction of attack, change the development mode, optimize the economic structure, transform the growth momentum, and strive to improve the stability and modernization level of the industrial chain supply chain under the new development pattern of "double circulation".

(1) Insist on placing innovation at the core of the overall development of the manufacturing industry

At present, there is a relatively serious structural imbalance between supply and demand in the mainland manufacturing industry, and the low-level oversupply coexists with the high-level insufficient supply; the low level of technological innovation of enterprises and the lack of independent innovation ability; the lack of industrial common technical support, especially in industries where small and medium-sized enterprises are concentrated, technological transformation is extremely difficult; affected by factors such as technology, technical standards, and intellectual property protection, the weak basic supporting capabilities such as key materials and core components have become the "card neck" problem of industrial development. It has serious restrictions on the production and system integration of the whole machine. The fact that key core technologies are subject to people not only become a bottleneck restricting the high-quality development of the manufacturing industry, but also pose a major risk to the country's economic security. General Secretary Xi Jinping pointed out: "Only by mastering the key core technologies in our own hands can we fundamentally guarantee the country's economic security, national defense security and other security" (Xi Jinping, 2015). Enterprises are the main body of technological innovation. The mainland's inability to master key core technologies in the field of Ruogan is closely related to the weak technological innovation capabilities of enterprises (Li Guojie, 2019).

Innovation is the soul of the development of the manufacturing industry and the inexhaustible driving force for transformation and upgrading. To enhance the innovation ability of the manufacturing industry, first, we must adhere to the demand-oriented, problem-oriented, adhere to the market-oriented, strengthen the main position of enterprise innovation, guide and promote all kinds of innovative elements to gather in enterprises, by focusing on integrated circuit chips, biotechnology, aerospace, core components A number of "card neck" key frontier technology shortcomings, with greater efforts to increase investment in research and development and innovation, comprehensively strengthen core technology research, accelerate the research and implementation of key components, core technologies of alternative measures, Strive to achieve a historic breakthrough in autonomous and controllable aspects. Second, we must comprehensively promote the deeper integration of production, education and research, encourage enterprises to form innovation consortiums, undertake major national scientific and technological projects, build a collaborative innovation network in the manufacturing industry, create unique advantages conducive to the rapid large-scale application and iterative upgrading of new technologies, increase investment in the transformation and application of technological achievements, accelerate the transformation of achievements, and form a synergistic effect of scientific and technological innovation to support industrial upgrading. Third, we must give play to the leading and supporting role of leading enterprises, attract upstream and downstream enterprises in the industrial chain to gather, rely on the industrial chain to supplement the chain and upgrade the service chain, form and improve the industrial ecosystem of mutual promotion and symbiosis, promote collaborative innovation, and give play to the integration and innovation of the industrial chain value chain1.

1 The difference between rongtong innovation and traditional technological innovation is that it emphasizes the closeness of the front-end and back-end links of the innovation chain, the dynamics of knowledge sharing and the pluralism of risk sharing. In fact, integrating innovation is not only an important starting point for enterprises to build an innovation ecosystem, but also an important foundation for improving innovation performance and sharing innovation risks.

(2) Accelerate the development of advanced manufacturing industries

At present, the world is in a major change situation unprecedented in a century, the uncertainty of the new crown epidemic, Sino-US trade frictions, the WTO crisis and other uncertainties have increased sharply, and the third wave of globalization has entered a period of deep adjustment. The digital economy, sharing economy, and industrial integration are reshaping the form of the traditional real economy, and the manufacturing industry is accelerating its development towards digitalization, networking, and intelligence, and the characteristics of software-defined, data-driven, platform support, service value-added, and intelligence dominance are becoming increasingly obvious (Zhang Yongming and Xu Zhiyong, 2018). From a realistic point of view, the mainland's advanced manufacturing industry is roughly composed of two parts, one part is the traditional manufacturing industry after absorbing and integrating advanced manufacturing technology and other high-tech (especially information technology), upgraded to advanced manufacturing industry, such as CNC machine tools, marine engineering equipment, aerospace equipment, aviation equipment, etc.; the other part is the formation of emerging technological achievements, with basic and leading industries, such as incremental manufacturing, biological manufacturing, micro-nano manufacturing, etc. Compared with the major industrial developed countries and the goal of achieving manufacturing power, there is still a big gap in technological innovation, quality branding, and environmental friendliness in most fields on the mainland.

The development of advanced manufacturing is an important way for the mainland to make up for the shortcomings of its industrial basic capabilities and seize the commanding heights of future industries, and it is also a leading force for participating in international competition. In the journey to achieve new industrialization, we should clarify the direction of progress on the basis of existing industries, strive to expand investment in high-tech or high-end manufacturing, optimize the supply structure, and cultivate new growth momentum. First of all, actively develop a new generation of information technology, biotechnology, new energy, new materials, high-end equipment, new energy vehicles, green environmental protection, aerospace, marine equipment and other new technology-driven strategic emerging industries, promote the engineering transformation and large-scale production of advanced technologies and cutting-edge technologies, and strive to form a number of irreplaceable fist products while seizing the opportunity for the development of emerging industries. Second, promote the deep integration of new technologies such as the Internet, big data, and artificial intelligence with the real economy, and build a number of strategic emerging industrial clusters with unique advantages and core competitiveness. Third, accelerate the cultivation of intelligent manufacturing industry using digital technology, focus on improving the ability of enterprise system integration, intelligent equipment development capabilities and key components research and development production capacity, focus on robots and their key components, high-speed and high-precision processing equipment and intelligent complete sets of equipment, and vigorously develop intelligent manufacturing equipment and products.

(3) Promote the transformation and upgrading of traditional industries with greater efforts

Transforming and upgrading traditional industries is an important task to promote the high-quality development of the manufacturing industry and build a manufacturing power. Traditional industries are an important part of the mainland's industrial system and have had a profound impact on the growth of the entire industrial sector, not only in terms of scale, but also in terms of efficiency2. At present, traditional industries account for 80 percent of the added value of industries above the mainland's scale and are still the main body of the industrial economy. Traditional industries such as textiles, clothing, and home appliances are related to the national economy and people's livelihood, and are not only important industries for stabilizing employment and foreign trade, but also an important source of new kinetic energy cultivation. For example, many strategic emerging industries such as new energy vehicles and new materials come from the transformation and upgrading of traditional industries. Since 2020, the COVID-19 pandemic has had a major impact on the mainland economy, and traditional industries have played an important role in stabilizing industrial growth. This shows that under the current situation of major changes in the external environment of the mainland, increased risks and challenges, and increasing downward pressure on the economy, accelerating the transformation and upgrading of traditional industries is of far-reaching and important strategic significance for stabilizing industrial fundamentals, promoting the upgrading of the manufacturing industry chain, and maintaining stable and healthy economic development.

2 Traditional industries mainly have four characteristics: First, most of them are based on stable and mature traditional technologies, the growth mode is mainly epitaxial growth, the price elasticity of product demand is small, and the added value is low. Second, indicators such as the proportion of GDP and the rate of contribution to economic growth have tended to decline for a long time. Third, the epitaxial dynamic is variable, such as the textile industry is an emerging industry in the initial stage of industrialization, and it evolves into a traditional industry after entering the middle of industrialization; in addition, some traditional industries will also be transformed into emerging industries after absorbing emerging technologies. Fourth, there is regional relativity, such as the processing and manufacturing industry transferred from the eastern coastal area to the central and western regions, and it may be a new industry in the transferred area.

The essence of industrial transformation and upgrading is the process of industrial evolution and change with innovation as the basic driving force, the improvement of the level of economic added value and competitiveness as the goal, and the multi-dimensional innovation practices such as technology, market, management, business model, enterprise form, and industrial linkage as the specific form (Liu Yong, 2018). To promote the transformation and upgrading of traditional industries, the first is to take supply-side structural reform as the main line, and accelerate the upgrading to the middle and high end of the industrial value chain by strengthening innovation drive, improving quality and brand, improving labor productivity and total factor productivity. The second is to take intelligent manufacturing as the main direction of attack, use a new generation of information technology to transform the manufacturing industry into a whole factor, a whole process, and a whole industrial chain, accelerate the development of intelligent management, intelligent production and intelligent services, promote the high-end, intelligent, and green manufacturing industry, and develop service-oriented manufacturing. The third is to take technological transformation and equipment renewal as the main starting point and breakthrough, accelerate the integration and application of new technologies, new processes, new materials, new equipment, new formats, and new models, especially focusing on informatization, automation, and supply chain management, and strive to improve the technical level and innovation ability of enterprises in core basic components (components), key basic materials, advanced basic processes, etc., and realize process innovation, product innovation and model transformation (Research Group of the Institute of Industrial Economics, Chinese Academy of Social Sciences, 2020).

(4) Pay attention to improving the stability and competitiveness of the industrial chain supply chain

Since the reform, the mainland has given full play to the low-cost advantages of factors such as labor, seized the important opportunities of economic globalization, made full use of the opportunity of international division of labor, formed a development model of "two ends outside" of markets and resources, participated in the international economic cycle, and promoted high-speed economic growth (Liu He, 2020). The essence of this growth achievement is an effective docking between international high-end elements (especially key technologies and markets) and domestic low-cost elements. With the rapid economic and social development of the mainland, major changes have taken place in the demand structure and production function, the internal circulation of the production system is not smooth and the disconnect between supply and demand has emerged, the problem of key technologies being subject to people is prominent, and the complexity of structural conversion tends to rise. In early 2020, the COVID-19 pandemic broke out globally, with long-term and far-reaching impacts on the world economy. Protectionism and unilateralism have spread further, and trade and investment disputes tend to intensify. Developed countries have intensified their blockade of the mainland's "card neck" technologies such as chips, integrated circuits, and high-end software, increasing the security risks to the industrial chain, and facing profound adjustments in the global industrial pattern and supply chain configuration.

To enhance the stability and competitiveness of the mainland industrial chain supply chain, the first is to forge the long board, strengthen the existing industrial scale advantages, supporting advantages and first-mover advantages in some fields, consolidate, improve and innovate the industrial chain supply chain on the basis of grasping the opportunity of internal circulation substitution, and promote the upgrading of the industrial base and the modernization of the industrial chain. The second is to make up for shortcomings, implement the industrial base reconstruction project, attach importance to the "strong chain" role of technical factors, increase the intensity of tackling key problems in important products and key core technologies, develop advanced and applicable technologies, and guide enterprises to extend and expand from low-end processing and manufacturing links to high-value-added research and development, design, branding, marketing, and remanufacturing at both ends of the "smile curve." The third is to encourage and guide advantageous enterprises to further strengthen the characteristics of the whole industrial chain, optimize the global layout, and actively attract and dock global innovation resources, especially to encourage and guide advantageous enterprises to further increase investment in the whole industrial chain based on the mainland's super-large-scale market advantages, and enhance the level of transnational cooperation and innovation and collaborative manufacturing capabilities. In addition, it is also necessary to optimize the development environment of the industrial chain supply chain by strengthening the support of land elements, improving the economic capacity of financial service entities, and promoting substantial progress in tax reduction and burden reduction.

(5) Vigorously enhance the vitality and development capacity of market players

In the 2020 Fortune Global 500, 36 U.S. manufacturing companies made a total profit of $224.91 billion, while 38 Chinese manufacturing companies had a total profit of only $49.48 billion. From the perspective of industry, the gap between high-quality enterprises in China and the United States is mainly concentrated in the fields of ICT manufacturing, medical device and pharmaceutical industry, military aerospace manufacturing industry, and equipment manufacturing industry (construction machinery + agricultural machinery). Judging from the situation of private enterprises and small and medium-sized enterprises, the problems of the lack of vitality of market players and the need to improve the ability of enterprises to be improved are still more prominent. According to statistics, the average life expectancy of private enterprises in the mainland is only 3.7 years, and the average life expectancy of small and medium-sized enterprises is only 2.5 years, so the average life expectancy of such a short period reflects the fragility of investment and operation capabilities of some enterprises. All along, the lack of enterprise development capacity has been largely masked by high economic growth3. For most enterprises, the shift from extensive development that relied on labor and resources in the past to intensive development that relies on technology and innovation is itself a huge challenge to corporate strategic concepts, governance structures, management norms, etc.

3 Enterprises tend to invest impulsively in the economic upward period, overextending or even diversifying in large quantities; in the downward period, the capital chain will be tightened and broken due to hasty investment, resulting in difficulties.

The establishment of a manufacturing power is inseparable from the world's leading high-quality enterprises. To enhance the vitality and development capabilities of market players, we must first support enterprises to be market-oriented, expand the scale of operation through mergers and acquisitions, and improve the product chain and innovation chain by focusing on the main business, strengthening technological transformation and innovation, and further strengthening and optimizing. Second, create a level playing field in terms of market access, examination and approval, operation and operation, bidding and bidding. Increase financial, taxation, financial and other policy support for start-ups, support entrepreneurial service platforms to further improve the industrial chain, encourage enterprises to develop to specialized and excellent, and cultivate and develop a number of small giant enterprises and single champion enterprises with strong innovation capabilities. Finally, support enterprises to enhance their innovation capabilities. In this regard, it is not only necessary to fully implement the deduction policy for enterprise R&D investment, enhance the operability and convenience of policy implementation, and guide enterprises to increase R&D investment through policies, but also strengthen support for enterprises to introduce talents, innovation capacity building and the combination of production, education and research, and guide and promote the agglomeration of innovation elements to enterprises.

Third, new countermeasures to promote the high-quality development of the manufacturing industry

Standing at a new starting point for a new journey of comprehensively building a socialist modern country, facing the new opportunities and challenges in the new development stage, we must thoroughly implement the new development concept, fully tap the driving force of super-large-scale market advantages for transformation and upgrading, rely on the advantages of the new national system to build a manufacturing innovation system, deepen the reform of the market-oriented allocation of factors, stimulate and carry forward the entrepreneurial spirit, create new advantages in international cooperation and competition with a high level of opening up, and continuously promote the high-quality development of the manufacturing industry to a deeper level.

(1) Give play to the advantages of the super-large-scale market

To promote the high-quality development of the manufacturing industry, we must firmly grasp the strategic base point of expanding domestic demand, give full play to the advantages of the super-large-scale market and the potential of innovation4, make the industrial cycle process more based on the domestic market, and strengthen the matching between manufacturing output and domestic demand through docking with the internal cycle, forming a higher level of dynamic balance between demand changes to drive supply transformation and upgrading, and new supply to create new demand. The first is to guide enterprises to carry out market transformation and business transformation in a timely manner based on changes in domestic demand (such as consumption upgrading, demographic changes and rapid development of urbanization, etc.), from simple "cost control + order export" to improving the added value of products, cultivating independent brands and controlling marketing channels, and improving the status of the value chain. The second is to rely on the domestic demand market to promote the industrialization of research and development results, guide and encourage enterprises to strengthen independent innovation, continuously break through and subvert the original industrial boundaries and operating mechanisms, and stimulate new industries, new formats, and new products to be nurtured and grow in differentiation. The third is to build a domestic value chain based on the super-large-scale market, improve the endogenous power mechanism, profit mechanism and re-investment guarantee mechanism of enterprise innovation, promote the agglomeration of innovation policies, innovative resources and entrepreneurial talents to enterprises, form a "siphon effect" of agglomeration of innovative elements, and improve the allocation, utilization and integration of global innovation resource elements.

4 The super-large-scale market advantage formed on the basis of super-large-scale countries, as a new comparative advantage of the mainland, combined with the rapid development of informatization and networking, will become the main force to promote major technological progress and structural changes in the manufacturing industry (Sheng Chaoxun, 2019).

(2) Give full play to the advantages of the new national system

Giving full play to the advantages of the new national system is an inevitable choice to effectively cope with the great changes in the world that have not occurred in a hundred years, strengthen the national strategic scientific and technological strength, break through the technical barriers of strategic industries, resolve the innovation challenges of scientific research organization reform, scientific research paradigm digital transformation and industrial transformation, build new advantages in manufacturing innovation and development, and effectively protect national security5. To give full play to the advantages of the new national system, the first is to focus on key links and key technologies and technical system issues, clarify the role boundaries of the government and the market, maximize the decisive role of the market in the allocation of resources, stimulate the vitality of various ownership innovation entities, give full play to the government's resource mobilization and guarantee capabilities, and open up key links for innovation and development. The second is to build a national research experiment system composed of a national research institute system with full coverage of cutting-edge technology fields and a higher education system with complete disciplines, promote the integration of science and education, the combination of industry and education, and strengthen the ability to provide forward-looking basic research and cutting-edge leading technologies. The third is to build a manufacturing innovation system with enterprises as the main body, market as the guide, and deep integration of production, education and research, strengthen technological innovation and collaborative research at the source of the industry, and support the innovative development of the manufacturing industry. The fourth is to lay out and build a number of scientific and technological innovation centers and comprehensive national science centers with global influence, and cultivate a new engine for national innovation and development. In addition, it is also necessary to take the innovation and mechanism reform of the property rights system, the talent system, the education system, the reward system and other systems as a breakthrough, release the vitality of the main body of technological innovation, and promote the integration of science and education and the integration and innovation of production, study and research.

5 The new national system is an institutional mechanism arrangement under the socialist market economy system, emphasizing that the market should not only play a decisive role in the allocation of resources, pay attention to mobilizing the effective participation of market players, but also better play the role of the government to achieve specific national goals (Mu Rongping, 2020).

(3) Deepen the reform of the market-oriented allocation of factors

Improving the market-oriented allocation of factors is an inherent requirement for building a unified, open, competitive and orderly market system, and is also the premise and foundation for promoting the high-quality development of the manufacturing industry. To deepen the reform of the market-oriented allocation of factors, the first is to expand the scope of market-oriented allocation of land, labor, capital and other factors. Through the integration of urban and rural construction land markets, the relaxation of urban settlement restrictions except for a few megacities, the smooth flow of labor social channels, and the improvement of the basic system of the stock market, we will break down the institutional and institutional obstacles to the flow of factors, and let the survival of the fittest function of the market mechanism play a greater role. The second is to accelerate the cultivation of technology and data element markets. Improve the property rights system for job scientific and technological achievements, adjust and reform the right to use, dispose of and benefit from scientific and technological achievements, vigorously develop service institutions for the transfer of technological achievements, and actively cultivate new industries, new formats and new models in the digital economy. The third is to accelerate the market-oriented reform of factor prices. Promote the transformation of the government pricing mechanism from the formulation of specific price levels to the formulation of pricing rules; government pricing should be completely withdrawn from the field where prices can be formed by the market, and prices should be formed through market competition. The fourth is to improve the operating mechanism of the factor market. Improve the factor market trading platform, improve the rules and services of factor trading, strengthen the supervision of factor transactions, and strengthen anti-monopoly and anti-unfair competition law enforcement.

(iv) Stimulate and promote entrepreneurship

In promoting the high-quality development of the manufacturing industry, entrepreneurs are the most important, most direct and most critical subjects. What concept the entrepreneur uses to run the enterprise and the way to obtain profits determines the strategic vision of the enterprise, and even the technical level, management ability and product quality of the enterprise6. The key to stimulating and promoting entrepreneurship is to improve and perfect the institutional and policy environment for the growth of entrepreneurs. The first is to strictly protect the legitimate rights and interests of market entities such as operational autonomy and property rights, strengthen the protection of property rights and intellectual property rights, form long-term and stable development expectations, encourage innovation, tolerate failure, and create a strong atmosphere that encourages entrepreneurs and officials to start a business. The second is to build a level playing field. Fair competition is not only reflected in the acquisition of resources, funds, talents and other elements, but also in the demand side of government procurement and market access. Whether these aspects are fair, just and open objectively provides entrepreneurs with different incentive options. The third is to optimize market order. Strictly implement the corresponding quality safety and environmental protection standards, and strictly punish those who do not meet the standards; strengthen the supervision of relevant certification, accreditation, inspection and testing institutions, improve service and competitiveness, so that high-quality products can be recognized by consumers; and increase the crackdown and punishment for counterfeiting, shoddy, infringement of intellectual property rights, and other acts. The fourth is to focus on cultivating entrepreneurship, and carry out special training for private entrepreneurs and enterprise managers at different levels to help them enhance their patriotic awareness, expand their world vision, enhance their strategic thinking, and enhance their spirit of innovation.

6 Whether an enterprise can gain a leading edge through innovation is closely related to the strategic ambition and leadership quality of entrepreneurs. In recent years, many private investments have suffered Waterloo-style failures, which have a lot to do with the lack of development capabilities based on entrepreneurial strategic thinking. In essence, there are no truly backward industries, only backward concepts, standards, technologies and management.

(5) Promote the high-level opening up of the manufacturing industry

To achieve high-quality development of the manufacturing industry in the new era, it is even more necessary to expand the opening up of the manufacturing industry and form a new pattern of comprehensive opening up of the manufacturing industry (Research Group of the Institute of Industrial Economics, Chinese Academy of Social Sciences, 2020). The first is deep integration into global value chains. Although the barriers to technical trade continue to deepen and the difficulty of introducing advanced foreign technologies has increased, it is still necessary to strengthen independent core technology research and strive to achieve cutting-edge technological breakthroughs, while adhering to active international cooperation, fully integrating into the global value chain, and forming a strategic situation of "you have me, I have you, and cannot be cut". The second is to continue to optimize the business environment. Through the full implementation of the pre-establishment national treatment and negative list management system for foreign investment, further expand the scope of foreign investment access, give full play to the advantages of the free trade zone and free trade port system, effectively reduce institutional transaction costs, increase the protection of intellectual property rights, and create a stable, fair, transparent, law-based and predictable business environment for global investors. The third is to improve the "going out" public service system. Strengthen research on the global industrial chain and value chain, build an international production capacity cooperation information platform, share major project libraries and big data resources, give full play to the advantages of overseas investment platforms such as overseas economic and trade cooperation zones, strengthen overseas enterprise associations and other intermediary organizations, and guide enterprises to solve problems with the help of professional social forces. The fourth is to actively and steadily promote the reform of the World Trade Organization. On the basis of in-depth analysis and study of existing international trade rules such as the World Trade Organization (WTO) and their shortcomings, we should unite all international forces, safeguard the multilateral trading system, and build an open world economic system.

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China Economist (Chinese Title: China Economist) is an academic journal in Both Chinese and English that is supervised by the Chinese Academy of Social Sciences and sponsored by the Institute of Industrial Economics of the Chinese Academy of Social Sciences. Founded in March 2006, China Economist has always been committed to transmitting the most cutting-edge research progress of Chinese economics and management to the world, building an academic platform and research position for Chinese and foreign scholars to communicate with each other, publicizing to the world the research results that can represent the fundamental interests of the Chinese people, promoting foreign readers to better understand China, and continuously enhancing the mainland's international influence and international discourse power. "China Economist" has been included in the global mainstream and authoritative databases and indexing systems such as EconLit, EBSCO, ProQuest, SCOPUS, etc., and has been selected as the Chinese Journal of Chinese Social Sciences (AMI) of the Chinese Academy of Social Sciences, which is a journal that "represents the highest level of English journals in humanities and social sciences in mainland China".

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