South Korean media: From 23rd to 2nd, the rise of China's manufacturing competitiveness!
On October 11, South Korean media "Gukmin Daily" published an article stating that "Made in China 2025", which has transformed China into a high-end manufacturing power over the past 10 years, will come to an end this year. China, which was a customer of South Korea before the mid-2010s, has now become a competitor. In multiple fields such as electric vehicles and batteries, China has become a global market leader. Recently, Shinhan Investment Securities released a report titled "Made in China 2025: Ten Years of Change", analyzing the secrets behind China's enhancement of manufacturing competitiveness, which enabled it to surpass the EU and consolidate its position as a two-power system alongside the United States.
According to data from the United Nations Industrial Development Organization (UNIDO), when China joined the World Trade Organization (WTO) in 2001, its manufacturing competitiveness ranking was only 23rd. However, by 2018, this ranking had risen to second place. China's share in global manufacturing has now exceeded 30%. China has taken the global lead in areas such as electric vehicles, batteries, shipbuilding, and aerospace. The localization rate in most industries, except for semiconductors, has made significant progress. The localization rates in fields such as solar energy, high-speed rail, charging batteries, and electric vehicles have exceeded 90%.
The "Critical and Emerging Technology Report" released by the Belfer Center at Harvard University's Kennedy School points out that China ranks second to the United States in key technology fields such as artificial intelligence, biotechnology, semiconductors, space technology, and quantum technology, surpassing Western developed countries including the EU. The Belfer Center pointed out that although the United States holds an advantage in all areas, it does not have absolute hegemony, and China's rapid catching up is becoming a reality.
The "Made in China 2025" program, which is about to end this year, is considered to have achieved remarkable results. This government-led plan rapidly built a supply chain ecosystem and significantly improved technological self-reliance. The second phase (2026-2035) aims to surpass Germany and become a leading high-end manufacturing power in the world. The goal is to ensure the competitiveness capable of driving the global market. The third phase (2036-2049) aims to surpass the United States and become the number one industrial power in the world.
What is the secret behind China's transformation into a manufacturing power with such strong technological strength? Shinhan Investment Securities pointed out that the secret lies in massive R&D investment and the cultivation of a large number of tech talents.
As of last year, China's R&D expenditure had reached 3.6 trillion yuan, exceeding South Korea's annual budget. Notably, the proportion of private sector in R&D has risen from about 50% at the beginning of the 21st century to nearly 80%. This is due to the rapid development of large private enterprises such as Huawei, Tencent, Alibaba, and BYD, which are leading in R&D investment.
The results of China's R&D investment are clearly reflected in its PCT application volume. PCT is the gateway for international recognition of technological innovation and commercialization potential. In 2019, China first surpassed the United States. As of last year, the number of applications submitted by China has reached 70,000, accounting for 25.6% of the global total.
Another driving force behind China's technological rise is its human resources. Shinhan Investment Securities analyzed: "In China, top talent is concentrated in the science and technology field, and the salary system also tends to favor STEM (science, technology, engineering, mathematics) jobs. The difference in talent distribution may lead to differences in national competitiveness in the future."
Original text: www.toutiao.com/article/1845689306170368/
Statement: This article represents the views of the author.