Nation aims to be No 2 manufacturer by 2035

China aims to surpass Germany and Japan to become the world's second-most-powerful manufacturing nation behind the United States by 2035, and by 2045 it plans to be a world manufacturing powerhouse on par with the US, Zhou Ji, president of the Chinese Academy of Engineering, said on Monday.

"China is now the world's largest manufacturer, but not necessarily the strongest," he said.

According to the 2017 index on manufacturing development published by the academy on Monday, the top four manufacturing nations in 2016 were the US, with a score of 172.28; Germany with 121.31; Japan, 112.52; and China, with 104.34.

In the 2012-16 period, the scale of China's manufacturing industries grew rapidly, but the quality and value of its products, the optimization of industrial structures and its capacity for innovation and sustainability did not see major changes, the index said.

In 2016, China saw a decline in its manufacturing development mainly due to a weak yuan, whose exchange rate against the dollar went from 6.09 in 2013 to 6.64 in 2016. The overall sluggish global economy also decreased China's exports and further weakened its manufacturing industry, Zhou said.

"This shows that China's manufacturing development still mostly relies on boosting its scale rather than improving quality or innovation," Zhou said. "Chinese brands have become more popular and recognized in the world in the past few years, but our competitive trade advantage, especially in high-tech products, is losing its edge."

However, Zhou said, the fluctuation is normal because other countries, like the United Kingdom and India, are catching up fast.

The unpredictability of the US government and its economic policies also adds uncertainty to the global economy and affects the manufacturing trends of China and the world, "but these unfavorable factors will not affect China's overall growth momentum", Zhou added.

"A strong manufacturing industry is the foundation of a strong nation," he said. "We must view our progress and the gap with developed countries objectively and with cautious optimism, and implement reforms to modernize China's entire industrial landscape."

Zhu Gaofeng, an academician of the academy who participated in the study, said Chinese manufacturing is still at the initial phase of transitioning from the quantity-driven model to one driven by quality and innovation.

"From our latest data, the manufacturing development index will see a small increase in 2017. The 2016 dip is unlikely to happen again," Zhu said.

He said high-tech fields contribute more than 10 percent of China's economic growth, but around 80 percent is still shouldered by labor-intensive traditional industries like retail and refineries.

"China's most successful internet businesses are primarily focusing on circulation and redistribution of existing goods and services, but its innovations have yet to affect the manufacturing industries in profound ways," he said.