What is the new industrialization?
The new industrialization should map to business models and market forms, not to an industrial form. Many governments are drawn to "tall, shiny, new" industries — but "in China the person who made bottled water became the richest man, and Haitian, which makes soy sauce, is valued at 200 billion yuan." Traditional industries carry enormous value. The issue is that Chinese manufacturing has overlooked a key premise: the market. Without a market, no matter how advanced or how new the manufacturing, it means little.
The foundation of the new industrialization has to be a new market
Chinese manufacturing's greatest strengths are its wealth of production scenarios and its supply-chain base. By contrast, the development and build-out of the Chinese market itself still lags badly. Per capita consumption in China is only 16.8% of Japan's and 5.9% of the United States'. In the context of the U.S.-China trade war, without building out its own large market, China will struggle to make any real breakthrough in economic development. Policy should move from the supply side to the consumption side.
The future of the new industrialization is new market demand
SHEIN has guided the digital transformation of traditional manufacturing by creating new user demand. New lifestyles create new market demand, which in turn shapes the supply side. The move from product supply chain to technology supply chain — exporting a supply chain while also exporting a brand — is the best moment for brand-building. Cases like Shangpin Home Collection and Hongqiao Furniture show how new business models can drive industrial upgrading.
In closing
A new market and new consumption are the foundation of the new industrialization. Against the backdrop of U.S.-China competition, the priority for China's economic structure should be reaching through to the market — not supply-side innovation alone.
Originally published: 36Kr · The Walker’s View · 2024-01-27 · Read original →
Originally published in the "36Kr · The Walker’s View" column. The author is Executive President of the Guangdong SME Development Promotion Association. For reprints or citations, please contact the author or the Association Secretariat.