China unveils plan to enhance manufacturing and boost economy

China unveils plan to enhance manufacturing and boost economy

19 May 2015, 11:07

China has delivered its plan to upgrade manufacturing by inspiring innovation and raising efficiency in an attempt to boost economic growth.

"The key to creating a new driver of economic growth...lies in the manufacturing sector," said the State Council.

The plan entitled "Made in China 2025," was revealed as China's factories are struggling with dim demand, increasing competition from other developing economies and a slowing domestic economy.

Wider constraints from the environment and resources, rising labor costs and a significant slowdown in investment and exports are the problems China's manufacturing faces now, said the State Council on the main government website.

The authorities pledged to support 10 high-technology industrial sectors including robotics, aerospace, new-energy vehicles and advanced transport.

According to the cabinet, with the government's fiscal and financial support, Beijing wants to boost research spending to 1.68% of manufacturing revenues by 2025 from 0.88% in 2013, MarketWatch reports.

The plan didn't give details of how Beijing would achieve these objectives but it shows the government's determination to revitalize a sector that was once a major growth engine. Rising costs have dampened foreign investment in the sector and cut into overseas demand for Chinese-manufactured products.

In 2014, about 33% of all foreign investments in China went into the manufacturing sector, well below the service sector's 55%, as official numbers indicated.

Appetite of foreign investors for made-in-China products has also declined. China's exports were up 6.1% in 2014, slowing from a growth of 7.9% in 2013.

The country's economy grew 7% in comparison with 2014, in the first quarter - its slowest quarterly rate in six years.

Beijing has intended to stimulate economic growth by easing monetary and financial policies. It has also trimmed interest rates three times in six months and accelerated government spending on infrastructure.

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