Xi Jinping urges China’s manufacturing sector to prioritize self-reliance

Chinese President Xi Jinping has intensified his calls for industrial independence, advocating for greater “self-sufficiency” in the nation’s manufacturing sector.

His remarks during a visit to a ball-bearing factory, which dates back to the Mao Zedong era, came just a week after the US and China signed a 90-day truce agreement in their ongoing trade war. Both nations had agreed to reduce tariffs of up to 145%, which had threatened to disrupt trade between the world’s two largest economies.

Economists contend that Chinese policymakers should focus on stimulating weak domestic demand, which has made the country dependent on manufacturing and exports for growth.

They also suggest that Beijing’s emphasis on production over consumption has exacerbated global economic imbalances, ultimately leading to the trade dispute with the US. However, Xi Jinping asserted that China’s focus on industrial output was the correct approach.

According to the state news agency Xinhua, Xi stated, “In the past, we relied on importing foreign fire, soap, and iron, but now we have become the world’s largest manufacturing country.”

He added, “We must continue to develop our manufacturing sector, insist on self-sufficiency and self-improvement, and master core technologies.”

China’s emphasis on self-sufficiency predates the current tensions with US President Donald Trump. In 2015, Xi launched a government program called Made in China 2025, which aims to expand domestic market share in strategic sectors through subsidies and policy support.

This initiative has accelerated since Trump’s first term, during which the US President initiated the initial phase of the trade war and imposed export restrictions, particularly on advanced technologies related to semiconductors.

In recent years, Western chambers of commerce operating in China have also grown more vocal in their complaints, alleging that China’s industrial and supply policies systematically favor domestic manufacturers, thereby reducing opportunities for foreign companies.

During his visit to the ancient city of Luoyang in Henan province, Xi Jinping urged officials to support the integration of China’s industry with academic research to foster innovation. Xi used the slogan, “May modernization with Chinese characteristics truly be realized.”

Since late last year, Beijing has signaled a shift toward prioritizing domestic consumption over manufacturing. Policymakers have also announced measures to loosen monetary policy, increase the central government’s budget deficit, and release funds to revitalize the stock market.

However, economists note that the government has not yet unveiled comprehensive reforms backed by large-scale funding to achieve a structural shift toward consumption in the economy.

China accounts for approximately 18% of global GDP but only 13% of global consumption. According to the Center for Strategic and International Studies, the country constituted about 29% of global manufacturing value added in 2023, surpassing the combined total of the next four largest manufacturers: the US, Japan, Germany, and India.

Under Made in China 2025, Beijing has set specific market share targets for advanced technologies such as electric vehicles, high-speed trains, telecommunications, robotics, and other areas to boost the country’s industrial self-sufficiency.

A recent report by the Washington-based Rhodium Group noted that “Chinese firms have achieved significant successes in many products, sometimes more than doubling their domestic market share in the last decade.”