A report reveals that it has been a few years since China re-introduced its Five-Year Plan, which promoted a new economic path up to 2025 termed “dual circulation.”
The goal was to shift from an “international circulation” strategy driven by exports to one driven by self-sufficiency, or “domestic circulation.”
That implies the government will have to get more involved and start investing again. Some economists have noted that China’s shift toward a more state-oriented, protectionist, and insular economic model is reminiscent of a revival of “neomercantilism.”
With tensions rising with the United States, China has ratcheted up the pressure on large state-owned businesses (SOEs) to play a decisive role in the country’s push for technological independence.
A report shows that the leader of China, Xi Jinping, has often emphasized the necessity for independence in technology to limit the use of foreign technology in light of the increasing array of export bans placed by the US on numerous Chinese enterprises and industries.
According to a statement released by China’s Ministry of Science and Technology after its meeting with the State-Owned Assets Supervision and Administration Commission, the country plans to transform many state-owned behemoths into world-class technological corporations.
The “pillars” of China’s high-tech self-reliance and self-improvement should be state businesses under central government control. Central enterprises must be supported to ensure that the country’s most pressing demands are met, that strangleholds are broken, that the war for critical core technologies is won, and that national industrial security is properly upheld. Large state-owned businesses should increase spending on fundamental research.
The report reveals that even though state-owned enterprises in China dominate critical sectors and get a disproportionate share of government subsidies, private enterprises in China are seen as more creative by observers.
Chinese officials have been competing with the United States for the “strategic initiative” in the wake of the recent disagreements, and they committed to construct an advanced industrial system.
To overcome the foreign “stranglehold” and build technological advancements, China has introduced a “new whole-nation system” that draws on the country’s political structure to combine national resources in support of technological endeavors.
