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The Law of Industrialization Contained in China's Development
Abstract: the 70-year industrialization process of New China contains the law of promoting industrialization by large developing countries: pay attention to giving full play to their comparative advantages and constantly optimize the economic structure; correctly handle the relationship among industrialization, urbanization, agricultural modernization and technological progress, realize the synchronous development of new industrialization, informatization, urbanization and agricultural modernization; guide the evolution of industrial structure with the improvement of labor productivity, Prevent the proportion of manufacturing industry from falling too early and too fast, and accelerate the development of advanced manufacturing industry.
Before the founding of New China, although my country already had a certain proportion of industrial economy, the real industrialization began during the first five-year plan period after the founding of New China. In 1953, 83.1 per cent of the country's labor force was engaged in agricultural production, the share of industrial employment was only 8.0 per cent, and industrial value added accounted for only 17.6 per cent of gross domestic product (GDP). By the end of the first five-year plan, the share of industrial added value in GDP had risen to 23.2 per cent. Since then, the level of industrialization in China has been continuously improved, and the proportion of industrial added value in GDP reached 44.1 per cent in 1978, but it has also formed an industrial economic structure in which the proportion of heavy industry is too high. Since the reform and opening up, my country has adjusted its ownership structure in accordance with the requirements of productivity development, adjusted its industrial structure in accordance with the principle of comparative advantage, and industrialization has advanced rapidly. It took decades to complete the industrialization process that developed countries have gone through for hundreds of years. At present, my country has become the world's second largest economy, the largest manufacturing country, the largest trade in goods, the second largest consumer of goods, and the second largest inflow of foreign capital. Its foreign exchange reserves have ranked first in the world for many years. Summarizing the laws of industrialization in New China in the past 70 years will help us forge ahead at a new historical starting point and take a new road to industrialization. It can also contribute Chinese wisdom to enriching development economics.
From Giving Priority to Development of Heavy Industry to Giving Play to Comparative Advantages
In a poor and backward country, the main task of economic construction is to speed up the process of industrialization and change the economic structure dominated by agricultural economy. Since the founding of the people's Republic of China, our party has always placed the task of realizing industrialization in an important position. It has explored for a long time what kind of industrialization to promote and how to promote industrialization, and has experienced the transformation from giving priority to the development of heavy industry to giving full play to comparative advantages.
After the founding of New China, China implemented the strategy of giving priority to the development of heavy industry. The implementation of this war has a certain historical background. At that time, the blockade of Western countries formed many development bottlenecks, which must be broken by giving priority to the development of heavy industry. The oil industry is a typical example. As an indispensable but "stuck" strategic industry at that time, self-reliance to achieve self-sufficiency in oil is not only a last resort, but also a must. Similar to this are the chemical industry, the electronics industry, the nuclear industry and the aerospace industry. It is precisely because of the priority given to these areas that breakthrough development has been achieved. It can be seen that the strategy of giving priority to the development of heavy industry has its rationality, but it also causes the imbalance of the proportion of light and heavy industry. From 1952 to 1978, China's total output value of light industry grew at an average annual rate of 8.4 per cent, while that of heavy industry grew at an average annual rate of 12.1 per cent, and the proportion of heavy industry increased substantially from 35.5 per cent to 56.9 per cent. This economic structure has brought about problems such as distorted resource allocation and low efficiency of industrial enterprises. It has also caused an imbalance between investment and consumption, and people's living standards have not been significantly improved for a long time.
Since the reform and opening up, with the establishment and improvement of the socialist market economic system and the gradual deepening of reform and opening up, the scope of market allocation of resources has expanded rapidly, the distortion of product prices and factor prices has been corrected, economic entities have been diversified, and my country's industrialization development path has shifted to focus on giving play. Comparative advantage. An important feature is the faster development of labor-intensive industries and the absorption of a large number of surplus agricultural labor, which not only promotes the process of urbanization, but also promotes the optimal allocation of resources and the improvement of total factor productivity. Especially in the process of developing the manufacturing industry, China has transformed its rich labor resources into comparative advantages and international competitiveness, actively integrated into the global industrial chain, and become the world's manufacturing center. my country's industrial structure has been greatly optimized. In the 1980 s, light industry grew faster than heavy industry, and the industrial structure of abnormally light and heavy industry was adjusted; in the 1990 s, light industry and heavy industry began to develop in a balanced manner; after 2000, with the change of comparative advantage and the strengthening of infrastructure investment in the central and western regions, the output value of heavy industry grew faster than that of light industry again, and the industrial structure was more stable and balanced. China's industrialization and opening to the outside world complement each other. From the establishment of special economic zones in the 1980 s and the implementation of the coastal opening strategy, to the beginning of efforts to join the World Trade Organization in the 1990 s, to the promotion of the formation of a new pattern of comprehensive opening since the 18th National Congress of the Communist Party of China, my country has embraced economic globalization in all directions., Fully integrated into the global supply chain, industrial chain, and value chain. The proportion of my country's GDP in the world's GDP has risen from 1.8 at the beginning of reform and opening up to about 16% at present, and its contribution to world economic growth has exceeded 30% over the years.
From giving priority to the development of heavy industry to giving full play to comparative advantages is not only the most important practice in the course of China's industrialization, but also a process of deepening understanding, which has accumulated valuable experience in promoting industrialization in a late-developing country.
Correctly handle the relationship between industrialization, urbanization, agricultural modernization and technological progress
Another experience of my country's 70-year industrialization process is to regard industrialization as an organic part of modernization and correctly handle the relationship between industrialization, urbanization, agricultural modernization, and technological progress.
The strategy of giving priority to the development of heavy industry at the beginning of the founding of New China brought about the problem of incoordination between industrialization and urbanization to a certain extent. Heavy industry is characterized by high capital intensity and insignificant industrial matching effects. The priority development of heavy industry can not create a large number of non-agricultural jobs, and it is difficult to give full play to the regional radiation function, which leads to urbanization lagging behind industrialization, and the follow-up power of industrialization is insufficient.
Since the 1980 s, coastal areas have given full play to the comparative advantages of abundant labor force and followed the economic law of industrial agglomeration to produce economies of scale. Labor-intensive manufacturing has developed vigorously, which has promoted the rapid development of urbanization. In the 21st century, under the promotion of regional coordinated development strategy, the infrastructure conditions in the central and western regions have been improved, and they have begun to undertake the transfer of manufacturing in coastal areas, and the speed of urbanization has also shown a momentum of coming from behind. From 1978 to 2017, my country's urban population increased rapidly, the urbanization rate increased at the fastest rate in the world during the same period, the number of cities and towns also increased significantly, and industrialization and urbanization gradually tended to synchronize.
Under the effect of the law that the proportion of agriculture gradually decreases with the improvement of the level of economic development, my country's agricultural surplus labor force has been transferred on a large scale and entered urban non-agricultural industries for employment, which has improved overall labor productivity. Since the beginning of the 21st century, China's economy has entered the stage of industry nurturing agriculture and cities supporting rural areas, and the policy of supporting and benefiting agriculture is unprecedented. With the process of industrialization, agricultural modernization, marked by agricultural mechanization, has accelerated its development. From 1978 to 2017, the total power of agricultural machinery increased at an average annual rate of 5.6 per cent. From 2003 to 2017, the average annual growth rate of the number of large and medium-sized agricultural tractors and their supporting agricultural tools exceeded 14%.
Since the 18th National Congress of the Communist Party of China, the Party Central Committee with Comrade Xi Jinping at the core has further deepened its understanding of the laws of industrialization, emphasizing the simultaneous development of new industrialization, informatization, urbanization, and agricultural modernization. This is not only a theoretical sublimation of the development experience at home and abroad, but also reflects the characteristics of the new round of scientific and technological revolution. The report of the 19th National Congress of the Communist Party of China proposed to accelerate the development of advanced manufacturing industry and promote the deep integration of the Internet, big data, artificial intelligence and the real economy. This will give industrialization the wings of scientific and technological innovation, and is an effective measure to actively adapt to and lead the new wave of information revolution. The report of the 19th National Congress of the Communist Party of China also regards the rural revitalization strategy as a national development strategy, which complements and complements the "synchronization of the four modernizations. In the process of industrialization and urbanization, many developing countries have suffered from agricultural shrinkage, rural decline, and the improvement of farmers' lives lagging behind economic development, and they have paid a heavy price. While promoting a new type of industrialization, the implementation of the rural revitalization strategy with agricultural and rural modernization as the overall goal is a major deployment for the simultaneous development of the "four modernizations". It reflects the inherent requirements of my country's socialist modernization and aims to explore a common goal of nearly 1.4 billion people. The road to prosperity.
In recent years, my country's population structure has changed, the working-age population has begun to grow negatively, labor wages have accelerated, and the comparative advantage of labor-intensive manufacturing tends to weaken. This new situation and new characteristics highlight the importance of the development of the "synchronization of the four. On the one hand, my country's agricultural labor productivity continues to increase, and the potential for agricultural labor transfer in the central and western regions is still large. On the other hand, with the help of the new round of scientific and technological revolution, especially the results of informatization, we can accelerate the mastery of core technologies and obtain core competitiveness, and enhance the position of my country's manufacturing industry in the global value chain through new industrialization.
Improving Labor Productivity to Guide the Evolution of Industrial Structure
From the experience of various countries, the industrialization of a country does not follow a straight trajectory, but changes according to an inverted U-shaped curve. The proportion of manufacturing value added in GDP usually goes through a gradual increase first, and then slowly decreases after reaching the peak. The decline in the proportion of manufacturing value added in GDP may be the result of the natural evolution of the industrial structure at a higher stage of industrialization, or it may be the result of premature "de-industrialization" when conditions are not yet ripe. We can observe this phenomenon in terms of the maturity of conditions when the share of manufacturing begins to decline (using the per capita income group defined by the World Bank as a characteristic of the stage of development), the share of agriculture (as a characteristic of the industrial structure), and the outcome of the decline in the share of manufacturing.
The decline in the share of manufacturing in the first group of countries is a natural progression. At the turning point from rising to falling, the per capita GDP of these countries has reached the standard of high-income countries, and the proportion of agricultural added value in GDP has dropped to a very low level; after the proportion of agriculture has declined, the position of its manufacturing industry in the global value chain has accelerated, and the labor productivity of the whole economy has continued to improve, maintaining the status of a developed manufacturing power. The decline in the proportion of manufacturing in the second category of countries is of an immature nature. At the point of decline, per capita GDP is still at the level of upper-middle income, and the proportion of agriculture is on the high side; after the decline in the proportion of agriculture, the transformation and upgrading of the manufacturing industry is not successful, the international competitiveness is declining, and the rate of increase in labor productivity is not enough to support sustained and healthy economic development. Judging by GDP per capita, most of these countries have so far not entered the ranks of high-income countries. Some Latin American countries are typical of this.
From this, three regular understandings can be summarized: First, after industrialization has advanced to a certain stage, high-speed industrialization will inevitably turn to a new stage of industrialization with technological innovation and structural upgrading as its connotation. At this time, the decline in the proportion of manufacturing is inevitable. Second, when the proportion of agriculture drops to a low level, there is no pressure on the transfer of surplus agricultural labor, and the tertiary industry is at a high level of development, the decline in the proportion of manufacturing will not lead to a decrease in labor productivity. Third, the decline in the proportion of the manufacturing industry does not mean that the importance of the industry is reduced. On the contrary, the new industrialization stage is a critical period for the manufacturing industry to climb the value chain ladder.
In the light of international experience, China should prevent premature de-industrialization. The 19th National Congress of the Communist Party of China proposed that "to build a modern economic system, we must focus on the real economy" and "accelerate the construction of a manufacturing power and accelerate the development of advanced manufacturing". It is necessary to implement these major arrangements to prevent the proportion of the manufacturing industry from falling too early and too fast, to allow enough time for the manufacturing industry to upgrade to technology-intensive high-end, the transfer of surplus agricultural labor, the development of the service industry and the improvement of labor productivity, and to promote core technological innovation and enhance Core competitiveness, so as to obtain a new position in the global value chain.
Author: CAI Fang
Source: People's Daily, August 28, 2019, 08
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