China prioritizes advanced manufacturing amid domestic consumption challenges

Chinese President Xi Jinping has issued directives to strengthen advanced manufacturing, aiming to enhance the autonomy and controllability of the nation's industrial ecosystems. This strategic push is intended to support Chinese-style modernization and build a manufacturing powerhouse through intelligence, green development, and integration.

However, economic analysts note a potential conflict between these manufacturing goals and China's need to boost domestic consumption. Currently, domestic consumption accounts for less than 40 percent of China's GDP, significantly lower than the global average of 60 percent and trailing behind the US (68 percent) and Japan (53 percent).

While the government's 15th Five-Year Plan includes a special plan to raise domestic consumption—targeting 60 trillion yuan by 2030—there are concerns regarding automation. Increased industrial automation may impact the job market, potentially reducing the disposable income necessary to drive the consumer spending required for long-term economic stability.