China’s economy must break through the growth bottleneck through the upgrading of consumption, manufacturing and service industries. The leading advantages in 5G technology and digital infrastructure and the potential of the digital economy stimulated by the huge user market will help China become the leader of the global digital economy, the largest promoter and service provider of the global digital economy.
This article is from WeChat official account:Tengyun (ID: tenyun700) author: Ye Xiang (Director, general manager of the Department of capital letters, the new financial columnist), the original title: “from the industry needs to: What is China’s consumption upgrade the road? “, the title picture comes from: Visual China
Under the background that the overall supply of goods exceeds demand, the Chinese economy must break through the growth bottleneck through upgrading, that is, the growth of the Chinese economy depends on consumption upgrades, manufacturing upgrades, and service industry upgrades. From the perspective of economic relations, the three are interdependent and mutually promoting, but in different stages of economic development, there is a main driving force or driving force, that is, the development of the other two may promote the further development of the main driving force , But without the traction of the main power, the development of the other two will be unsustainable and will not become a power source by itself.
A hallmark of the upgrading of the manufacturing industry is to replace labor with machines and replace human operations with automation. This is a phenomenon that has been happening in the Chinese economy in the past few years and in the coming years. Therefore, the overall result of the manufacturing upgrade is that the proportion of the employed population in the manufacturing industry has declined in the total population, so that the upgrade of the manufacturing industry itself will not bring about an increase in labor income.
Another manifestation of the upgrading of the manufacturing industry is that the quality of products is improved, and the added value is higher. Generally speaking, it means the improvement of product quality and price. If the household income cannot be increased, the effective demand for high-quality products Will not produce. Obviously, the continuous upgrading of manufacturing is premised on the continuous upgrading of consumption.
The continuous upgrade of consumption depends on the greatThe income of most families continues to increase, and the increase in income of most families requires that the labor market in the economy as a whole is in short supply, or at least in a tight balance, and structural tensions appear. This is only possible in the context of the rapid expansion of the service industry.
From 2010 to 2015, China’s economy has completed the turning point of its transformation. The current service industry’s contribution to GDP has reached about 53%. The main driving force for China’s future economic growth lies in the service industry, and the consumer service industry is even more important. Main.
Internet influence geometry
After more than 10 years of development, nearly 1.2 billion people in China have been active on the Internet. For example, WeChat’s global monthly activity exceeds 1.2 billion, mini programs’ daily activity exceeds 400 million, and Douyin’s domestic daily activity exceeds 300 million. Online activities have become a very important part of the lives of Chinese people today. The Internet expands the boundaries of the media, and allows any individual to use the media indiscriminately to influence the media.
From the analysis of people’s online behavior, in the information age of the Internet, various new media forms are introduced and widely promoted. Each individual is not only a viewer and receiver of online information, but also a producer and publisher of various information. . The Internet is truly a mass-to- mass media. This is completely different from traditional media, which is the one-way transmission of information and opinions from the minority to the majority.
Today netizens are not only swayed, held hostage, and even blindly followed by mainstream opinions, but at the same time they are also trying to get rid of the shackles of mainstream opinions. They use their own observations or fabricated data. Different values and outlook on life, express your own knowledge, opinions, and opinions.
Billions or even tens of billions of information flow and collide with each other on the Internet every day. With the changes in the real and objective world, it has continuously confirmed or falsified opinions on the Internet, and has continuously revised and eroded the mainstream online understanding. After a certain point in time, or due to the occurrence of a certain event, suddenly, the mainstream view will undergo a huge, even 180-degree change. The minority and non-mainstream people who were in the conflict of views may be sought after by numerous media and traffic overnight.
Such characteristics in the Internet world have greatly strengthened the willingness of each individual to express their own opinions.
As a result, the Internet informatization environment expands people’s imagination of life, and must cultivate the habit of consumers expressing their unique consumption wishes. It will require suppliers to meet their individual unique needs and be willing to do To achieve this individual demand pay a higher price.
Consumers are willing to express individual needs and are willing to pay higher prices for the realization of individual needs. The market environment provides a strong and broad market demand for the development and transformation of C2B.
In today’s Internet era, China’s consumption upgrade and the growth of the consumer market will no longer repeat the old way of consumption upgrade of the “Four Little Dragons” in Japan and Asia. They will only follow the improvement of product quality and brand value. The new way of combining consumption upgrade and personalized consumption, or consumption upgrade is not only because the products consumed are more expensive and higher quality, but also because the products can better meet the individual needs of consumers, thereby Achieve higher individual utility.
In the past few years, the development of online commerce has emerged. The indiscriminate accessibility and convenience of small and micro enterprises through the Internet have sprung up like bamboo shoots after a rain. They are using their wisdom and talents in product innovation and brand building. It has impacted any self-proclaimed companies and brands, will overturn traditional business concepts and methods, and is becoming a great force for China’s economic development and reform.
Take the digitalization of manufacturing enterprises as an example
From the perspective of commodity suppliers, to meet consumer demand for small batches, or even single-piece needs, manufacturing companies must have strong flexible manufacturing capabilities. The production cycle of the company needs to be greatly shortened, and the manufacturing efficiency of the company is extremely improved. . This will give birth to the emergence of smart factories and smart manufacturing, that is, the digitization of manufacturing enterprises.
However, even if it is a manufacturer of terminal consumer goods, the digitalization of a single company is not enough to provide consumers with timely and personalized products, because if the upstream component suppliers have not completed the digitalization, they will drag the terminal The hind legs of commodity manufacturers, only the digitization of the entire manufacturing enterprise system can realize the individualization and timeliness of commodity manufacturing. This requires the Industrial Internet. Since the automation of many enterprises in China has not been completed, China’s manufacturing upgrade will be manifested as a parallel situation of automation and digitalization.
After the digitalization of (M2M) between manufacturing enterprises and manufacturing enterprises, it is only the communication of production information flow between enterprises and enterprises. The interconnection of things also requires the digitalization of logistics.
According to the company’s shipping and purchase information, the logistics company plans the delivery time and the best route, and selects appropriate transportation tools to make the logistics and the company’s raw materialsMaterial procurement and inventory, finished product shipment and inventory are linked to optimize corporate inventory. Correspondingly, the data of each link in production, circulation and sales must be fully connected before the industrial Internet is completed.
Therefore, automation with the goal of digitization, or the combination of digitization and automation, will be a realistic choice for the upgrading of China’s manufacturing industry. It is also different from what the manufacturing industry in developed countries has experienced. From mechanization to automation.
The first prerequisite for the realization of the industrial Internet is the construction of a low-latency, high-bandwidth 5G network. At present, China’s three major telecom operators are already building networks on a large scale. On this basis, cloud storage, cloud computing, and big data construction will be China’s long-term investment in new infrastructure. This constitutes the upgrade content of China’s infrastructure. China will have two high-efficiency infrastructures, the infrastructure supporting the traditional economy and the infrastructure supporting the new economy.
Today’s developed countries have historically faced a problem in the process of economic upgrading. The “28th” phenomenon of manufacturing enterprises has become more and more serious. The leading enterprises in each industry have become larger and smaller, and the number of small and medium-sized enterprises has decreased. , In this way, due to the improvement of the efficiency of enterprises, the employment volume of the industry will be reduced.
The highest number of jobs in China’s manufacturing industry reached 232 million in 2012, accounting for 30.3% of the total employment. Since then, the number of jobs in the manufacturing industry and the employment ratio have both entered a downward trend, and the number of jobs in 2019 is 211 million, the proportion of total employment dropped to 27.5%. At the same time, the industrial added value was about 20 trillion in 2012 and reached 32.2 trillion in 2019, which means that the labor productivity of the manufacturing industry has increased by 76.3% in seven years.
Therefore, when China’s manufacturing industry enters the process of digitalization and artificial intelligence, the efficiency of enterprises will be further greatly improved, labor productivity will be greatly increased, and the number of manufacturing employment will be reduced. Will this worsen the national employment? situation? If employment deteriorates, it is difficult for household income to increase, consumption cannot increase, economic growth will stagnate, and the drive for further digitization and intelligence will be exhausted.
Therefore, if the digitalization of the economy can improve employment and increase household income, digitalization and economic development will enter a virtuous circle of mutual promotion. Since 2012, we have seen that although the number of jobs in the manufacturing sector is decreasing, China’s overall employment data continues to improve. The registered unemployment rate in urban areas at the end of 2012 was 4.1%, and by the end of 2018, it had dropped to 3.8. %, further down to 3.62% at the end of 2019. This is because the service industry has developed rapidly, and the new employment in the service industry has completely absorbed the reduction in employment in the manufacturing industry. Service at the end of 2012Employment in the service industry reached 272.8 million, accounting for 35.7% of the total employment. By the end of 2019, the number of employment in the service industry reached 365 million, accounting for 47.4%. In 7 years, there was an increase of 92.2 million, which was much higher than the 21 million decrease in manufacturing.
Can the digital service industry continue to increase employment?
So after the widespread application of AI, can the service industry continue to develop rapidly and increase employment after digitization?
As mentioned earlier, As a result of intelligent and digital manufacturing, companies can tailor them to the needs of each consumer. In fact, this tailor-made process is a process in which the consumer himself participates in the design. Through communication and interaction with the company, he/she embodies his/her own values, aesthetics, and outlook on life, which are intangible content. The form of consumer goods is embodied in elements such as shape, style, color, size, light and shade, texture, etc. Based on these elements, companies design and manufacture consumer products that best satisfy consumers’ feelings and emotions, thereby bringing consumers the greatest utility(Utility).
Before digitization, designers of a certain company would only design a limited variety of products each year. Because of the huge number of products produced in each category, the value of the designer’s knowledge contained in a single product is limited. After digitization, consumers put forward their own unique requirements for the content of the product, and to a certain extent they participate in the design of the product.
In this way, in addition to the knowledge value of the company’s designer, each product also contains the knowledge value of the consumer itself. And as the company further grasps the consumer’s value orientation, the price of the product not only reflects In addition to the design, production and manufacturing costs of an enterprise, it must gradually reflect the market price of consumers themselves.
In this way, the knowledge of product design that was originally a worthless consumer is commercialized and transformed into a part of the value of the product. The consumer of a product is also the service provider of the production of the product. From a macro perspective, Will greatly increase the value of the entire economy.
Another aspect of the economic digitalization process is that people use mobile phones and other mobile sensing tools to integrate many outdoor and indoor activities in people’s lives, including mountain and water activities, dining and entertainment. Or all of them are digitally recorded and published on various digital media platforms.
In this way, people are physically consumingIn the process, digital content was also produced and provided. At the same time, people can digitally consume different content during physical consumption. For example, they can watch short videos during fishing, or they can consume digitally during physical leisure consumption in restaurants and hotels.
This is very different from the situation in the traditional economy. In the traditional economy, when consumers are consuming, they cannot produce products or provide services. For example, when you are getting a haircut or waiting for a haircut, you cannot provide consultation services. The reverse is also true. When he is producing, he cannot consume at the same time.
Since everyone’s time is limited, 24 hours a day, 30 days a month, and 12 months a year, the total amount of time for everyone in an economy is basically fixed, which is always determined by production time + The composition of service time + consumption time, the sum of the time of all people in an economy is the time of the “total people”. Consumption time is composed of consumption time with economic value and consumption time without economic value. The product of the unit time value of the “total person” and the time of one year is the total economic value of the economy in one year.
The growth of traditional economies mainly depends on three changes in people’s time in the economy: First, increase the time of production and service. For example, an agricultural economic industrialization process is the process of gradually transforming farmers into workers. About less than half of the time of the year, farmers are busy in farming, and most of the rest of the time is deserted. This time does not create value and far exceeds the time necessary for rest. It is consumption with no economic value. When a peasant becomes a worker and works all year round, the value created naturally far exceeds the work of a peasant.
Second, increase the “consumption time with services” in the consumption time and reduce the “consumption time without services”. For example, when consuming a dinner, the chef at home uses his skills and labor to turn the raw materials into delicious dishes, and the eater at home does not have to pay service fees. Although the service actually exists and happened, in the economic sense, because there is no financial relationship with this service, such service does not exist in financial statistics, and it has not happened. It seems to be “no service consumption”.
This type of service has no transaction, no market entry, and therefore does not become a part of social economic activities. Non-service consumption is consumption that does not form social economic activities. The consumption of a restaurant is obviously the consumption of services. The price difference after deducting the cost of the food reflects the various services of the restaurant, including the service of the chef and the waiter. This kind of service will be reflected in economic statistics and is “serviceable.” consumption”.
The development of e-commerce and food delivery is exactly the change from non-service consumption to service consumption in terms of logistics. Consumers no longer carry the purchased items home by themselves.Or go to a restaurant by yourself, this action and process does not produce economic value. However, if it is delivered by a logistics or courier company, or a takeaway boy delivers food to the home or office, consumers pay for the delivery of goods and meals, which brings new economic value and new employment.
Similarly, there are many examples of consumption in the family or circle of friends that have different economic meanings from external consumption. From sleeping at home to staying overnight in the hotel, from the help of classmates or workmates to get a haircut, to the beauty of the barber shop, from the laundry at home to the laundry service, and so on. More and more restaurants are dining, less and less home dining, more and more hotels staying overnight, less and less home staying overnight, more and more service consumption, which also means more and more service time If more, the economy will grow, and jobs will expand.
One of the reasons why consumers switch from non-service consumption to more service consumption is that due to the increase in income and the substantial increase in time value, the opportunity cost for consumers to consume without service has increased and is significantly higher than the cost of paying for services .
The second reason is the consumption of necessary services that are incidental to other economic activities, such as business trips to complete certain economic activities, such as business negotiations, and service consumption caused by business trips, including meals and hotels outside. Rest is a by-product.
The third reason is that the consumer’s consumption quality requirements have been greatly improved. Non-professional and serviceless consumption is not enough to meet the rich requirements of consumption. For example, if you need a hairstyle that matches your personal appearance, temperament, and status, you are not a classmate Or the workers can provide it.
Third, and more importantly, it is achieved through the increase in the value of human unit time. When the first stage of industrialization is completed, the demographic dividend ends, the Lewis turning point has passed, and there is not much room for growth in the first item; when the period of rapid development of the service economy ends, the room for growth in the second item is limited; At this time, faster economic growth depends on the increase in the value of human time. For example, as people’s knowledge and skills become higher and higher, their unit time value increases. Today, the transformation and upgrading of Chinese industrial enterprises rely more and more on innovation, technology and knowledge, which is a manifestation of the increase in the value of human unit time.
The Internet makes it easier for diligent Chinese people to acquire knowledge and increase knowledge, which naturally helps Chinese people increase the value of time. This is another contribution of digitalization to economic development.
Of course, the development of the second item in China today has not yet ended, and the development of the third item has just begun, that is, in a period of rapid growth, and it is the period when the Internet plays its role.
The digitization of the economy contributes to economic growth.Provides another larger space, especially the service industry, whether it is a producer service industry or a consumer service industry. Productive, such as people can provide consulting, software services or product design for enterprises in any place; consumer, such as experts with medical expertise can provide online consultations for patients online.
People can not only provide various services offline, but also provide the same or similar services online, such as doctor’s online consultation, filming, consultation, and online training of various skills. Physical consumption can be done offline, while online consumption or online services can be provided. In this way, the total value of an economy is equal to the offline economic total plus the online economic total, that is, the offline time value plus the online time value.
In this way, the existence of the Internet greatly extends the consumption time of consumers. Correspondingly, the service time must also be substantially increased, which will greatly increase the employment demand of the Chinese economy and promote employment growth.
The development of the digital economy will not only help the development of China’s macroeconomics, but will also help the globalization of the Chinese economy.
First of all, the development of the industrial Internet and the digitalization of the manufacturing industry will greatly improve the manufacturing efficiency of Chinese products and offset the negative impact of rising labor costs on product competitiveness;
Secondly, the digitization of the economy has allowed Chinese consumers and Internet users to participate in product design, which will greatly enrich the form of products and help expand the global market boundary of Chinese products;
Third, digitization has strengthened the competitiveness of the manufacturing industry and consolidated the integrity of the industrial chain, enabling the Chinese economy to continuously generate savings and provide a steady stream of funds for China’s global investment.
It is certain that China’s leading advantages in 5G technology and digital infrastructure and the potential of the digital economy stimulated by a huge user market determine that China will continue to explore and develop diverse digital products and become a global digital The leader of the economy, the biggest promoter and service provider of the global digital economy.
This article is from WeChat official account: Tengyun (ID: tenyun700) , Author: Ye Xiang (Director, general manager of the Department of capital letters, the new financial columnist)