Li Xiaohua: Multi-dimensional Understanding of the Modern Industrial System
Created On : 2018-09-11    Views : 110

Building a modern industrial system with coordinated development of the real economy, science and technological innovation, modern finance and human resources, is the main content of the building of a modern economic system, and it is also a major theoretical innovation that is made based onChina's development practice, and conforms to the law of economic development.


The modern industrial system has the general requirements of advanced nature, but also displays differences between different countries and regions, and the characteristic of dynamic evolution over time. The so-called advanced nature means that the industrial system should be of a high level, whether it is a comparison of vertical time dimensions or a comparison of horizontal countries and regional dimensions. The so-called differences refer to the differences in such aspects as resource endowment, location condition, economic system, development path, and international environment in various countries and regions. There are no common evaluation criteria for modern industrial systems; the modern industrial systems of different countries have their own characteristics, and late developing countries don't necessarily have to follow the development path of the modern industrial systems of developed countries. The so-called dynamic nature means that the modern industrial system will continue to adjust with economic development and evolution of technology, and in particular it will continue to move to a higher level with the advancement of technology frontiers. At present and in the future, we can understand the modern industrial system from three aspects, namely, structure, quality and synergy.

Understanding the modern industrial system from the structural dimension

Economic development follows its own laws, and for countries with special resource endowment, the industrial system has its inherent reasonable structure at a certain stage of economic development.

Viewed from the perspective of industrial structure, the construction of a modern industrial system means that building a modern industrial system requires a reasonable proportional relationship between industrial scale and product structure between the three industries (primary, secondary, and tertiary industry), within the structure of each industry, between the segmentation industries, and between the upstream and downstream parts of the same industry. At present, China is in the stage of three industrial structural transformations.  The rising proportion of the tertiary industry conforms to the general law of economic development, but it must be recognized that the real economy is the foundation of a country's economy, and an important pillar for the country's strong power and prosperity. Therefore, we must focus economic development on the real economy. By deepening supply side structural reform we will accelerate innovation, and drive the convergence of policies, capital, technology, and talents to achieve coordinated development of the real economy, technological innovation, modern finance, and human resources.

Viewed from the perspective of organizational structure, building a modern industrial system requires a proportional relationship between enterprises of different scale, forms and ownership that is relatively reasonable and benign. Generally speaking, big enterprises enjoy advantages in such aspects as capital, technology and channel, and they tend to lead architectural design of products and services, and the development direction of industries. At the same time, the spill over effect of knowledge of big enterprises, the flow of personnel and entrepreneurial innovation can help incubate many medium and small sized enterprises. SME’s supply raw materials, parts, and supporting services for big enterprises; and with their higher flexibility and more active innovation, medium and small sized enterprises have become an important part of the modern economy. Coordinated development of large, medium and small sized enterprises has become an inherent requirement for building a modern industry system. Meanwhile, we also need to see that,Chinaimplements a basic economic system in which public ownership is the mainstay and multiple forms of ownership develop together. Therefore, we not only need to unswervingly strengthen and develop the public sector of the economy, adhere to the dominant position of public ownership, and give play to the leading role of the state-owned economy, but we also should unswervingly encourage, support and guide the development of the non-public economy, and stimulate the vitality and creativity of the economy of non-public ownership. This is also an inherent requirement of building a modern industrial system.

From the perspective of regional structure, the building of a modern industrial system not only requires one industry or different links of the industry chain to determine its spatial layout based on its characteristic of resource investment, but it also requires the industries in a certain region to conform to the primary functional positioning and resource endowment characteristic of the region; and it requires coordinated development between different regions based on their different comparative advantages, establishing a sound landscape of industrial division of labor and cooperation, and reducing the gap in economic development between urban areas and rural areas. What should be noted is that industrial clusters are an important spatial carrier for industrial development, so, similar industries and upstream and downstream enterprises in an industry should be promoted to concentrate into industrial parks, so as to take advantage of the clustering effect; China should try to cultivate several world-class industrial clusters, so as to jointly push forward its building of a modern industrial system.

Understanding the modern industrial system from the quality dimension

The modern industrial system, which is a main content of the modern economic system, is not a simple combination of various enterprises and various industrial combinations, but it is a high quality industrial system. In the present and future, the building of a modern industrial system requires that we achieve comprehensive improvement in terms of technology level, production efficiency, economic benefit and green development, so as to promote the economy to achieve higher quality and more sustainable development.

At the technical level, the modern industrial system means that the innovation capability is world-leading, and that it ranks among the world’s foremost in intensity of R&D investment, the quantity of published scientific papers, the quantity of patent applications submitted and the patents granted and overall industrial technology level. It has a strong capability of reproduction and reproduction-based innovation, and a strong capability of re-innovation after digesting and assimilation, along with strong original innovation capability. It has a relatively strong power of discourse in high-tech and strategic and newly emerging industries. It is a main developer of international industrial technology standards and rules, and exercises innovation and technological progress rather than investment of elements to become the main driving force of economic growth.

In terms of production efficiency, the modern industrial system means achieving high product quality, high input-output efficiency and total factor productivity and labor productivity are among the highest in the promoting deep integration of next generation information technology and industry, improving the technology level, optimizing process flow, innovating the business model, and improving business management.

In terms of economic benefit, the modern industrial system means moving towards the mid and high ends of the global value chain, significantly increasing the added value of products and services and improving enterprises' profit rate and capital return rate by improving the technological level, reducing energy consumption and material consumption, accelerating capital flow, and enhancing brand value. At present, China is still generally in the middle and lower ends of the global value chain, needs to further promote supply side structural reform, increase investment in innovation, and continuously raise added value and economic benefits, so as to enable the general public access to a bigger share of the fruits of economic development.

In terms of green development, the modern industrial system requires establishing and practicing the belief that "clear water and green mountains are a great treasure". At the same time, the industries’ energy consumption, pollution, water consumption, and the emission intensity of various pollutants and greenhouse gases are all amongst the highest levels in the world. It should be noted that, with advancement of economic development, progress of development concepts, and technological upgrading, the requirements of the modern industrial system for green development will continue to increase. Therefore, at present and in the future, we must continue to use various advanced techniques to optimize the industrial structure, promote energy transformation, and promote continuous decline of consumption and emission indices, so as to strongly support sustainable development of the economy and society, and better meet the people's aspiration for a good life.

Understanding the modern industrial system from the dimension of synergy

"Accelerating the construction of an industrial system with coordinated development of real economy, scientific and technological innovation, modern finance, and human resources"  "means that the modern industrial system not only has the requirements of structural and quality dimensions, but also the dimension of synergy. The modern industrial system is an organic whole that is comprised of the real economy, technological innovation, modern finance and human resources. The four aspects influence and promote each other.

On the one hand, development of the real economy requires continuous supply of scientific and technological innovation to continuously provide a driving force for it. At the same time, the development and expansion of the real economy, transformation and upgrading also provide a fertile ground for technological innovation, so that technological innovation can be continuously improved in the process of industrialization. On the other hand, development of the real economy, especially new start-up companies, requires modern finance to provide financial support through diversified financing methods. The development of modern finance also requires the real economy to continuously supply blood for it, and it relies on technological innovation and such means as products, equipment, and services of the real economy to continuously innovate business and business models, to improve the quality and efficiency of development. In addition, it is also necessary to realize that, people are the most active factor in productivity. The real economy, technological innovation and modern finance all require strong support of human resources. To build a modern industrial system requires high level coordination between the industry and human resources, and we need to make the most of our advantage in human resources, and to adapt the scale, level and structure of the industry to be compatible with the status of human resources, so as to achieve fuller employment.

At present,China's economy has shifted from a high-speed growth stage to a high-quality development stage and it is right in the process of transforming the development mode, optimizing the economic structure, and transforming the growth momentum. Throughout the world, technological innovation is triggering a new round of industrial change, and is accelerating the restructure of the global industrial landscape. In addition, various adverse factors are emerging in the international environment, i.e. trade protectionism is rising, and the external development environment is tightening. In such a context, to build a modern industrial system has become an especially urgent task. The key to building a modern industrial system is to strengthen innovation capabilities and improve technology. This requires targeting China's shortcomings in the industry and the world’s technology frontiers, making full use of global resources, optimizing talent supply, increasing research and development investment, improving the financial system, stimulating market vitality, and forming a joined force between policy, research, academic institutions and use, so as to promote quality change, efficiency change and driving force change of economic development.

(Li Xiaohua is a tutor of postgraduates of Shanghai Academy)