Editor's note: This article is part of CGTN's series called "A New Vision for China's Economic Future," in which global economists and eminent academics share their personal views and insights on China's economic development. Shi Jianguo is a researcher at the Institute of Party History and Literature of the Communist Party of China Central Committee. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity.

As Chinese President Xi Jinping, also the general secretary of the Communist Party of China (CPC) Central Committee, pointed out at the first meeting of the Central Commission for Financial and Economic Affairs, under the 20th CPC Central Committee on May 5, a modern industrial system is the material foundation of a modern country, and the focus of economic growth must be on the real economy to provide a solid material foundation for China to realize the Second Centenary Goal.

For China to seize the initiative when it comes to its future development amid fierce global competition, build a great modern socialist country, and advance national rejuvenation, it is important to establish a strategic positioning supported by the real economy.

We will encourage the development of an industrial system that is competitive and supportive, and encourage policies and measures that focus on the real economy.

China also needs to form a new industrial structure featuring the joint development of emerging industries and traditional manufacturing industries, the mutual promotion of modern and traditional service industries, the deep integration of information technology (IT) and industrialization, and the development of military-civilian integration. 


This will enable China to build a more complete, advanced, safe and modernized industrial system as soon as possible, which would then provide a solid foundation for China to realize its Second Centenary Goal.

Advanced manufacturing as key to development

President Xi had emphasized that the real economy is the foundation of a country's economy and source of wealth. Advanced manufacturing is one key area of the real economy, and economic development cannot be separated from the real economy at any time, he said.

Nowadays, if we look at developed countries, it is easy to find that they have all experienced the process of modernization of their industrial systems, and finally have formed the world's leading manufacturing capabilities in some industrial fields. There are many examples such as the aerospace sector in the U.S., the automotive and advanced equipment manufacturing sector in Germany, and the semiconductor, automotive, and electronics industries in Japan and South Korea. All of them show that these industries have all become solid foundations that support the modernization of these countries. 

Meanwhile, in contrast, some countries in Latin America, which were previously recognized as having bright futures, failed to seize the opportunities to upgrade their countries' industrial systems, especially the manufacturing industry. They eventually saw their economic growth slow or even faced long-term stagnation, and finally fell into the "middle-income trap," which they could not extricate themselves from.

The industrial development experiences from the above countries provide historical references for China to learn from.

China should proceed from its actual national conditions, and continue to focus on the real economy. It is important to move towards global scientific and technological revolution and promote industrial transformation to boost China's strength in manufacturing, aerospace, transportation, cyberspace industries, ensuring product quality, and digital development.

We will carry out industrial foundation re-engineering projects and research projects on major technologies and equipment; support enterprises that use special and sophisticated technologies to produce novel and unique products; and move the manufacturing sector toward higher-end, smarter and greener production.

In the process of building a manufacturing powerhouse, it is necessary to consolidate China's leading position in industries where it excels, accelerate work to shore up weaknesses in sectors vital to China's development security, comprehensively promote the upgrading of the industrial foundation, enhance the resilience of the industrial chain, and enhance the modernization of the industrial chain.

Promote vigorous development of strategic emerging industries

Strategic emerging industries, which represent the direction of a new round of scientific and technological revolution and industrial transformation, are a new pillar and a new track leading future development, and are key areas for cultivating and developing new momentum and obtaining new competitive advantages in the future. 

As President Xi pointed out in the report to the 20th CPC National Congress, China will promote the integrated and clustered development of strategic emerging industries and cultivate new growth engines such as next-generation IT, artificial intelligence (AI), biotechnology, new energy, new materials, high-end equipment and green industry.

As a major socialist country on its way to becoming a powerful modern country, China must fully leverage its institutional advantages, strengthen research on key and core technologies and support strategic resources, relieve the stranglehold on many areas as soon as possible, and comprehensively improve the country's capacity for independent innovation.

At the same time, China should also fully leverage and make good use of the strengths of China's enormous market, organically combine the strategy of expanding domestic demand with the strategy of innovation-driven development, strive to expand the domestic market application of strategic emerging industries, open up the market space, and promote the formation of a virtuous circle of industrial development.

For example, the realization of China's domestically-developed C919 large jetliner project is a very successful example. From research and development, finalization, test flight, and commercial operation, the project has given full play to China's institutional and market advantages.

By 2035, the Commercial Aircraft Corporation of China is expected to have an annual production capacity of 200 large commercial aircraft. This will have a positive driving role in China's national economic development and related industries.

Digital economy as crucial growth engine

In recent years, the internet, big data, cloud computing, AI, blockchain, and other technologies have accelerated innovation. The world's economy has transformed into a digital economy with the network of IT industry as an important component.

In this regard, President Xi pointed to the unprecedented speed of the digital economy's development, the extent of its reach, and the level of its impact; as well as how it is fast becoming a critical force that is reordering global production factors, reshaping global economic structures, and transforming global competition.

In the process of comprehensively promoting Chinese-styled modernization, if China wants to outpace its competitors and seize the commanding heights of future development, we must seize the advantages and strive to strengthen, improve and expand the digital economy.

Therefore, it is necessary to promote the deep integration of the digital economy with advanced manufacturing and modern service industries, use IT applications and intelligence as leverage to foster new growth drivers, promote total factor productivity, and give birth to new industries, new businesses and business models.

At the same time, digital technology should also enable the transformation and upgrading of traditional industries, and promote the fundamental transformation of the traditional manufacturing industry model and enterprise form. Hence, China will accelerate the digitalization of agriculture and services, help farmers increase their incomes and promote equal access to basic public services.

Accelerate development of modern infrastructure system

Infrastructure serves as an important support for economic and social development. Although the overall level of China's infrastructure has achieved improvement by leaps and bounds, compared with the practical needs of the development and security of a large country, and the urgent requirements of China's construction of a modern industrial system, the existing infrastructure system is not adapted and complete. 

Therefore, it is necessary to optimize the layout, structure, function, and system integration of infrastructure, and establish a comprehensive, efficient, intelligent, green, and safe modern environmental infrastructure system.

To lay out a solid foundation for building a comprehensive modern socialist country, it is also necessary to speed up the construction of new infrastructure such as 5G networks and data centers, accelerate the construction of a strong transportation system, build a clean, low-carbon, safe, and efficient modern energy system, strengthen water conservancy infrastructure, and strengthen agricultural and rural infrastructure.