Digital twins, nuclear fusion and the small matter of fixing China’s economy
Xi Jinping, China’s leader, paid a visit to Heilongjiang in the country’s north-east. Part of China’s industrial rustbelt, the province exemplifies the problems besetting China’s economy. Its, before adjusting for inflation, barely grew at all, suggesting it is in the grip of deep deflation.
“What China really wants to be is the leader of the next industrial revolution,” says Tilly Zhang of Gavekal Dragonomics, a consultancy. That will require it to upgrade traditional industries, break foreign strangleholds on existing technologies and forge a new path in industries of tomorrow.
Nor is it China’s first assay at the problem. In 2006 a 15-year plan set national targets to increase research-and-development spending, cut dependence on foreign technology and lift technology’s contribution to growth. It also identified 16 “megaprojects”, such as building China’s own large passenger aircraft and landing a probe on the moon. These were largely attempts to replicate existing technologies.
Total-factor productivity growth—Mr Xi’s preferred test of new productive force—has also slowed. China’s tech programme introduced in 2006 implied that its contribution to growth should rise to 60%. Instead, it has fallen to less than a third, according to calculations by Louis Kuijs ofGlobal Ratings, a credit-rating agency. China is thus suffering from its own version of the “Solow paradox”: you can see a new technological age everywhere but in the productivity statistics.
A third objective is to upgrade existing industries. “Even the most traditional agriculture can form new productive forces,” Wang Yong of Peking University has argued, so long as it employs revolutionary technologies. He cites automated planting or selective breeding using big data. At the two sessions, the annual meetings of China’s parliament and its advisory body, a delegate from a prominent state-owned distillery even argued that the new productive forces can be found in hard spirits.
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