context: China has been committed to upgrading its manufacturing sector with national strategies like Made in China 2025 as labour and production cost rise. Escalating tensions between China and the US have not helped. As pressure mounts, the state plans to announce more incentives to support industry growth.
Central and local governments will further support manufacturing investment and development, says Meng Wei 孟玮 National Development and Reform Commission (NDRC). Meng says they will focus on key and bottleneck areas, including
- accelerating major sci-tech infrastructure construction
- developing strategic emerging industrial zones
- cultivating advanced manufacturing clusters
- implementing tax incentives and fiscal policies
- deepen equity issuance reform
- improve sci-tech innovation board's institutional arrangement
- improving market environment, including access, administrative approval and tender
- improve investment area devolution
- promote the 'investment project responsibility system' (Note: the government sets standards in this approach, asking investors to pledge compliance)
With a rigorous ecosystem in place, manufacturing investment and development will focus on high-end and bottleneck industries, says Li Yiming 李艺铭 China Centre of Information Industry Development Institute of Electronic Information (CCID) deputy director. Those include
- high-end areas with strong demonstration effects
- electronic information products
- transportation equipment
- specialised equipment
- important bottlenecks
- integrated circuits
- new materials
Economic Information Daily notes Guangdong, Hubei and other local governments have ramped up investment policy support, while the tech innovation board created new investment opportunities. Based on discussions around the tech innovation board, Li Taoyang 黎韬扬 China Securities military sector chief analyst predicts high-end manufacturing investments will focus on key materials and components, and smart manufacturing.