Composition and DevelopmentStrategies of an Industrial System forChina’s Modernization Drive

Rui Mingjie*

School of Management, Fudan University, Shanghai, China

Abstract: The creation of a modern industrial system is a key priority for China’shigh-quality economic development. It is fraught with obstacles and challenges, andit necessitates great courage, wisdom, and a suitable approach and strategy. Today’sworld is defined by rapid technology innovation, shifting consumer demand, geopoliticalrestructuring, and an evolving global industrial division of labor. In this context, China’scurrent industrial structure is characterized by an increasingly entrenched dual structure.While conventional sectors are afflicted by excess capacity and growth bottlenecks,emerging high-tech industries are hampered in their development. These difficulties can belinked to a variety of factors, including slow domestic consumer demand and insufficientinnovation. The creation of a modern industrial system strives primarily to foster inclusiveinnovation of the existing industrial system in order to reallocate resources in accordancewith a demand-driven approach. This paper suggests that the current division betweenconventional and high-tech sectors should be replaced with a new industrial system thatin this study we refer to as “3+1” structure for sound and sustainable development. Tothat end, we recommend that the government: (i) Adopt a demand-oriented developmentapproach; (ii) support industrial development through the application of digitaltechnologies; (iii) make coordinated progress between technological and industrialinnovations; and (iv) continue to reform and open up, as well as reshape global technologyand industrial cooperation networks.

Keywords: Modern industrial system, composition structure, development strategy

JEL Classification Code: L16

DOI: 10.19602/j.chinaeconomist.2023.11.02