Li Qiang used his first trip as premier this week to prioritise the development of China’s advanced manufacturing sector to guard against risks amid efforts by the United States to curb Beijing’s technology ambitions. During his two-day inspection tour of China’s central Hunan province, Li hosted a seminar on the development of advanced manufacturing and listened to the heads of eight national enterprises, which included Xiaomi CEO Lei Jun, state broadcaster CCTV said according to Bloomberg. Li, who replaced Li Keqiang as China’s No 2 official earlier this month, underscored the role of the manufacturing sector as an integral part of China’s real economy amid complex and profound changes in the domestic and international environment, according to an official statement. He visited companies including electric car maker BYD and Apple supplier Lens Technology. As the situation at home and abroad undergoes complex and profound changes, the development of China’s manufacturing industry is facing an important juncture and the efforts to strengthen the industry must be increased Li Qiang “As the situation at home and abroad undergoes complex and profound changes, the development of China’s manufacturing industry is facing an important juncture and the efforts to strengthen the industry must be increased,” Li said, according to the statement. Li also urged the executives to “promote high-level technological independence and self-reliance, and push forward the transformation and upgrading of traditional manufacturing industries”. Earlier this month during his first press conference as premier, Li focused on boosting confidence in China’s ailing economy and its private sector. On Friday, during a meeting of the new cabinet, Li further pledged to focus on the real economy by boosting the private sector and stabilising foreign investment amid persistent market doubts over China’s growth prospects due to growing external uncertainties, falling overseas orders and still weak consumption. In the provincial capital of Changsha, Li demonstrated his commitment to alleviating the difficulties faced by businesses and proposed the establishment of a favourable public atmosphere that respects entrepreneurs who are viewed as the main body of China’s scientific and technological innovation. 5 issues, from housing to population, likely to mark Xi’s fact-finding campaign The premier also promised to create a business-friendly environment with market-oriented and law-based policies, while also providing policy support to foster the development of advanced manufacturing. Li also pinned his hopes on entrepreneurs to help shift the focus from production to innovation and from products to brands, in reference to a change from “Made in China” to “Created in China”. Companies should “accelerate the transformation and shift of Chinese manufacturing into Chinese creations and Chinese products into Chinese brands,” he said. China needs to find new economic growth engines through science and technological innovation in its manufacturing sector to mitigate the decline driven by the transformation of different industries, according to Zhao Bo, associate professor of economics at the National School of Development at Peking University. Zhao emphasised the need to establish a market-driven innovation environment that “combines digital information with traditional industries, allowing China’s manufacturing industry to renew and upgrade to a more advanced level”. A service sector that is isolated from manufacturing may be a water without a source and a tree without roots Zhao Bo He suggested that the government focus on strengthening the manufacturing sector and integrate it with the service sector, with his research highlighting a potential detrimental effect on economic growth when the service sector’s share of the economy is too high. “A service sector that is isolated from manufacturing may be a water without a source and a tree without roots,” Zhao said on Wednesday at an economic outlook event hosted by Peking University. After three years of under Beijing’s zero-Covid policy, China’s real economy suffered from uncertainties including increased production costs, foreign investment outflows and declining market confidence, which undercut the prospects of entrepreneurs. Hunan has committed to boosting its business environment this year by driving the production of 1 million new energy vehicles, establishing 10 enterprises valued at 10 billion yuan (US$1.45 billion), 200 national sci-tech small enterprises and 60 enterprises or products with national manufacturing champions, according to the province’s 2023 government work report. The southern province has also set a goal to boost its private economy, aiming for it to account for over 70 per cent of regional gross domestic product, while also creating 1,000 new private industrial enterprises.