After Huawei smartphone leap, Beijing sets sights high for advanced manufacturing in midst of US tech curbs

On the heels of a smartphone breakthrough by China’s Huawei Technologies, a government ministry has touched on plans to foster internationally competitive and advanced manufacturing sectors, vowing to rally more policy and funding support for the strategic sector.

“China’s electronic manufacturing industry has shown a sustained recovery since the beginning of this year,” Yang Xudong, deputy director of the Electronic Information Department under the Ministry of Industry and Information Technology (MIIT), was quoted by Xinhua as saying, adding that China would “improve the efficiency of logistics” to help domestic firms tap international markets, and to provide support for key firms in supply chains.

Chinese authorities aim to boost the supply of high-end products such as 5G smartphones to stabilise growth in the industrial economy and to unleash domestic consumption, according to an action plan released by the MIIT and the Ministry of Finance last month.

SMIC under the spotlight for ‘breakthrough’ 5G chip in Huawei’s new smartphone

Following the launch of Huawei’s Mate 60 Pro, which is powered by an advanced computer chip that has drawn the ire of Washington, an editorial in the state-backed Economic Daily repeated Beijing’s frequent call to enhance China’s self-reliance push.

The MIIT pledged to shore up cellphone upgrades, calling for more innovation in key technologies, with a focus on fostering and strengthening the ecosystem of foldable screen smartphones, to optimise costs, enhance technological capabilities, and improve compatibility. And by next year, 5G smartphones should account for 85 per cent of all Chinese cellphones shipped, the MIIT said.

Ding Changfa, an associate professor with the Department of Economics at Xiamen University, said: “It is not enough to rely solely on planning. Taking a long-term perspective, it takes several decades to cultivate and accumulate technological talents.”

“With limited capital, talent and technology”, dominating the entire industrial chain is impossible, Ding added. “Therefore, the key is to increase investment in the education sector and to embrace globalisation.”

Consumer electronics and related industries, including photovoltaics and lithium batteries, play a strategic role in underpinning the national economy, accounting for 14.8 per cent of all industrial revenue last year, according to the MIIT.

The growth rate of China’s value-added industrial output in its computer, communication and electronics sectors is expected to average around 5 per cent from now through next year, according to the government’s action plan.

In addition to electronics, the document also outlined six new growth points, including virtual reality, advanced computing and intelligent photovoltaics.

From January-July, the nation’s electronic equipment manufacturers – those making at least 20 million yuan (US$2.73 million) a year – saw their combined profits reach 276.32 billion yuan (US$38 billion), according to the MIIT.