China manufacturing: can Beijing prevent a US-style collapse of its key sector?

Manufacturing’s contribution to gross domestic product has been in free fall since 2006 and alarm bells are starting to ring, experts say

Beijing should learn a lesson from the demise of America’s industrial sector, they say

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China must protect its manufacturing sector to prevent a US-style demise, experts say. Photo: AFP

Published: 2:29pm, 28 Mar 2021Updated: 7:42pm, 29 Mar 2021

China must ensure manufacturing remains the backbone of its economy and not allow it to slowly wither, as had happened in the United States, economists say.

Cai Fang, a former deputy head of the Chinese Academy of Social Sciences who now works as an adviser to the People’s Bank of China, said manufacturing’s share of gross domestic product (GDP) had been falling since 2006 and alarm bells were starting to ring.

“The manufacturing sector has always been the most important and most basic part of the real economy, but it is now a source of concern,” Cai said at the China Real Economy Forum in Foshan, Guangdong province on Saturday.

“It is crucial to maintain the weight of the manufacturing sector, prevent the decline in productivity and actively expand the size of middle-income groups to support the healthy development of the economy,” he said.

Cai’s comments were echoed by Fan Hengshan, an economist and former deputy secretary general of the National Development and Reform Commission, who said it was “abnormal” to have witnessed the shrinkage of Chinese manufacturing.

The government should formulate development plans for each segment of the manufacturing sector, he said.