05/20/2015, 00.00
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Beijing to focus on new technologies to revamp economy

The State Council unveiled an ambitious ten-year plan to upgrade manufacturing, including ocean engineering and aerospace technology, to pull the country out of its current impasse. With rising labour costs and environmental degradation, China has no choice; however, some analysts believe the private capital and foreign knowhow are needed.

Beijing (AsiaNews) – Chinese manufacturers are expected to boost their productivity immensely by 2025, through innovation, so as to create globally competitive multinational companies that are both resource-efficient and environmentally friendly, this according to the "Made in China 2025" plan the State Council unveiled yesterday.

The plan comes as the country's economy slows to its lowest growth rate in 20 years at around 7 per cent. Under the circumstances, the government has realised that rising labour costs, slowing exports and environmental restrictions cannot be addressed through force.

For Chinese Prime Minister Li Keqiang, China has to find new areas to excel. In his address at the end of the National People’s Congress, he said that small- and medium-size firms would help pull the country out of its current situation, especially in the service sector and e-commerce, which are sectors of the future.

In its plan, the State Council picked ten focus areas to build a high-end manufacturing sector: new information technology, numerical control tools and robotics; aerospace equipment; ocean-engineering equipment and hi-tech ships; railway equipment; energy-saving and new-energy vehicles; power equipment; new materials; biological medicine and medical devices; and agricultural machinery.

For ANZ Banking senior economist Raymond Yeung Yue-ting, this "transformation is an essential task for the government under the [existing] macroeconomic environment." With it, "The industry upgrade will boost people's income and drive domestic consumption."

However, whether the ambitious revamp-and-upgrade plan would work depends on the government's supporting policies. Indeed, "It's important,” Yeung said, “to have more policies in place to encourage more private investment and introduction of foreign technologies".

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