The Five Relations of Why China's Manufacturing Industry Is Big and Not Strong

China is a big manufacturing country. The comparative advantages of local manufacturing are mainly reflected in price competition and there is still a certain gap between value competition and developed countries. With the advancement of the scientific and technological revolutions and the information revolution, the global manufacturing industry will usher in new changes. If China wants to maintain its competitive advantage in the new international environment, it must follow the path of building a strong country and promote manufacturing to a manufacturing power. upgrade.

The international competition for a new round of manufacturing powers has become increasingly fierce, and developing countries have paid more attention to catch-up development.

At present, the world has set off a new wave of competition for manufacturing power, and most of the countries participating in the competition are countries with large manufacturing scale and strong economic strength. According to relevant statistical data, the member states of the Group of 20 (G20) are the main participants of this wave, and most of the group’s manufacturing powers have a clearer vision. In addition, the total economic scale of all countries participating in the competition of manufacturing powers in the world accounts for more than 70% of the total size of the global economy.

In the era of the fourth industrial revolution, the new round of international competition for manufacturing power will also be competition in the information space. The developed countries such as the United States, Britain, and Germany that have taken the lead in industrialization have relatively strong economic and scientific and technological strength. With the deepening of global integration, these developed countries are actively exploring cost-stricken areas and are choosing to invest in the world. Although many developed countries have already entered the era of post-industrialization, they all clearly see that “post-industrial” is not “without industry”. The global economic competition still needs to be supported by the manufacturing industry to a large extent, and the country’s competitiveness is also sufficient. In the strength of the manufacturing industry, making the manufacturing industry become an inevitable choice.

Relatively speaking, developing countries pay more attention to the development of catch-up in the new round of competition to create a powerful nation, and China, ASEAN, India, etc. have all started catching up with the manufacturing industry. Some developing countries have the advantages of more mature traditional manufacturing industries, large market potential, low factor costs, and relatively complete supporting services. This provides strong support for the catch-up development of domestic manufacturing industries and also serves as a new strategy for the country to become a multinational corporation. Positions provide facilities.

China's manufacturing industry still shows the characteristics of “big but not strong”, with low added value, high production costs, and low levels of research and development.

Although China's manufacturing industry ranks first in the world in terms of scale, it still displays the characteristics of “big but not strong”, which makes Chinese manufacturing long-term low-end in the global industrial chain. The characteristics of “big but not strong” manufacturing in China are mainly reflected in the following three aspects:

First, the overall low efficiency of manufacturing output has led to low value-added products. In recent years, the value-added rate of China’s manufacturing industry is about 20%, which is far below the level of 35% in industrialized countries. This shows that China's manufacturing economic efficiency and product added value is low, in the global industrial chain in the middle and lower reaches of the division of labor status. Taking the iphone mobile phone as an example, China is the assembly base for the production of iphone mobile phones. However, for the production of a mobile phone, China only obtains 3.63% of the total profits. U.S. companies obtain nearly 50% of profits, and Japanese companies obtain more than 30% of profits. Korean companies Get more than 10% profit. The unbalanced phenomenon of the large scale of China's manufacturing industry and small output value also reflects the problem of low output value and low added value in China's manufacturing industry. According to the statistics of the United Nations Industrial Organization, the per capita added value of China's manufacturing industry is equivalent to only one-tenth of that in Ireland, ranking at around 50 in the world, and even lower than some developing countries.

Second, the lack of a core manufacturing component leads to high production costs. Most of the core components of China's manufacturing industry rely on imports, which increases the cost of production in China's manufacturing industry. Information from the Ministry of Industry and Information Technology shows that the external dependence of China's high-end chips and general-purpose chips is as high as 95%, that is, almost 95% of high-end CNC systems, high-grade hydraulic parts, and engines rely on imports. The rising costs of imported materials and the rising prices of social assets directly affect the cost of China's manufacturing industry and keep it high. The gradual disappearance of manufacturing cost advantages has weakened the competitiveness of China's manufacturing industry.

Third, insufficient investment in R&D in manufacturing science and technology has led to low levels of research and development. The R&D expenses of China's large and medium-sized industrial enterprises are less than 1% of the main business income, which is far below the average level of 2.5% in the developed countries. Regarding the allocation of R&D expenditures and the staffing of R&D personnel, there is a large gap between China and the developed countries. The lack of scientific and technological innovation has a direct impact on the improvement of the manufacturing technology level. The lack of R&D investment is a key factor that leads to low levels of research and development and inactive technological innovation.

Our country takes the road of building a powerful country and needs to grasp five major relationships

Under the upsurge of competition for a new wave of manufacturing powers, China should take a positive attitude to view the development situation and competitive landscape of the manufacturing powerhouses in the world, and rationally consider the problems and deficiencies in the development of China’s manufacturing industry and fully measure China’s competition in the international manufacturing powers. The status. In addition, China’s road to a strong manufacturing country needs the support of the country’s macro development strategy and policy environment. It needs to deal with the problems and contradictions in the current domestic manufacturing development, and it also needs to actively develop international cooperation. Therefore, our country has taken the road of “building a strong country” and generally needs to grasp the following five major relationships.

The first is the relationship between China's economy and the global economy. The contribution of a country or region to the development of the global economy is inextricably linked with the country’s economic strength and development capabilities. China's pulling role in global economic development should also be matched with its own economic strength and development capabilities. Therefore, China should comprehensively consider the strength and potential of its own economic development, supply of resource elements, market development level, and risk response capabilities, and design a scientific and reasonable economic growth rate to ensure the sustainable development of China's economy.

The second is the relationship between the macro-policy environment and the strategy of building a strong country. Scientific and effective macroeconomic policies play an important supporting role in the healthy and sustainable development of the manufacturing industry. In order to promote the strategy of building a strong nation, China has issued policy documents such as "Made in China 2025", "Guidelines for Actively Promoting "Internet Plus" Action", "Guiding Opinions on Deepening the Integration of Manufacturing Industry and the Internet", and actively promoting the strategy of building a strong country. Service is implemented. Governments at all levels should work hard to implement the Central Government's policies, effectively promote the development of the local manufacturing industry, and respond to the strategic spirit of manufacturing power in the country.

The third is the relationship between economic restructuring and manufacturing competitiveness. Under the new normal, we must take a rational look at the status of manufacturing in China's national economy and properly handle the relationship between economic restructuring and manufacturing competitiveness. At present, China has entered the era of post-industrialization. The share of manufacturing in China's national economic system will be reduced, and the share of service industry will gradually increase. However, this does not mean that China has already straddled the stage of the development of the manufacturing industry and cannot ignore the status of manufacturing in our economy. The "reindustrialization" strategy of the developed countries has also fully demonstrated that the development of the manufacturing industry cannot be ignored at any stage. With the increasingly fierce competition among manufacturing powers in the world and the urgent need to adjust our country’s economic structure, we should fully grasp the relationship between economic structural adjustments and the improvement of competitiveness in the manufacturing industry, and make bigger and stronger manufacturing under the framework of ensuring the smooth transition of the economy. industry.

The fourth is the relationship between excess capacity and innovation-driven. In the process of implementing the strategy of building a strong country in our country, a certain degree of excess capacity is beneficial, but if it exceeds the boundary, serious overcapacity will have a significant negative effect on China's economic development, including market competition, efficiency, and social risk. Great. In order to enhance China's manufacturing capacity, it is necessary to standardize the market order, increase effective investment, balance market supply and demand, resolve excess capacity, and increase the output efficiency of the manufacturing industry. At the same time, a modest overcapacity will also help force manufacturing companies to establish a sense of innovation-driven, take the initiative to increase investment in R&D technology, promote product innovation, develop model innovation, and reduce blind investments. Therefore, our country takes the road of “building a strong country” and implementing innovation-driven strategies is an inevitable choice.

The fifth is the relationship between the "Belt and Road" cross-border cooperation and manufacturing transformation and upgrading. At present, China is vigorously implementing the "One Belt and One Road" strategy to promote common development and achieve common prosperity. The implementation of this strategy will help rationalize the allocation of production capacity. Relying on the “One Belt and One Road” strategy and strengthening strategic cooperation with countries along the route, it will help transfer some of China’s excess production capacity in the production and processing of manufacturing industries, and it will have the effect of resolving production capacity. It will also be the front-end research and development of the domestic manufacturing industry chain. The design and back-end manufacturing service and socialization have more room for development. At the same time, it is also conducive to absorbing advanced technologies, models, and management experience of countries along the route to provide more support for the transformation and upgrading of domestic manufacturing industries. Therefore, in the process of our country’s road to becoming a powerful country, we should also handle the relationship between the “Belt and Road” cross-border cooperation and the transformation and upgrading of manufacturing industries, adhere to the concept of open development, strengthen international cooperation, and actively create “multi-wins”. pattern.

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