Old and new economic drivers

At a recent news conference, Minister of Industry and Information Technology Miao Wei said the key to converting the old driving forces for economic development into new ones lies in properly handling the relationship between developing emerging industries and the transformation and upgrading of traditional ones.

Since the concept of new economic driving forces was created, almost all local governments in China have equated it with emerging industries and viewed them as the only source of fresh impetus for economic development.

As a result, a series of development plans for emerging industries have been worked out, with ambitious goals set for their development while paying no attention to traditional industries and making no efforts to push for their transformation and upgrading.

The new economic driving forces are essentially newly created ones, which means that not all of them can drive economic development on their own, especially those with low efficiency, low technology content or weak market competitiveness.

The sprawling development of wind power and photovoltaic industry a few years ago with support of local governments, which has caused serious overcapacity and a series of thorny problems yet to be tackled, is a prime example. Such nondiscriminatory development will not provide any fresh impetus for economic development.

In fact, those traditional industries with core technologies and an awareness of the importance of innovation, such as home appliances and mobile phones, can continue to be a driving force for local economies if they manage to maintain their development momentum and find new market space.

Even the steel and coal sectors that are now plagued by overcapacity can inject new vitality if they take steps to cut overcapacity and outdated production.