The China Center for International Economic Exchanges, headed by former Chinese Vice Premier Zeng Peiyan, issued a report on the transformation of China’s industrial structure. The report concluded that China faces four challenges to upgrading its industrial structure: the lack of key technology, the pressure from international competition, the pressure on employment, and structural and institutional obstacles.
As China has grown to be the world’s manufacturing powerhouse, it has had to rely on imports for many of its key technologies, large complete groupings of equipment, core components, and important basic elements.
Internationally, the United States, Japan, France, and other countries have proposed and implemented a "remanufacturing” strategy. Developing countries such as China, India, Brazil, and South Africa have, one by one, entered into accelerated industrialization, causing sharp price hikes in energy and other resources. All of this has gradually diminished China’s competitiveness.
How to upgrade the industrial structure without losing jobs is a challenge. Expanding the service industry is necessary to resolve this problem.
Finally, China must deepen reform to provide structural and institutional assurance to the upgrading of its industrial structure.
Source: People’s Daily, May 6, 2013