Answering China's Economy Part 8: Will the development of emerging industries squeeze the welfare of ordinary people?

As China’s emerging industries such as artificial intelligence, digital technology, automation, and chips flourish, a strange narrative has also emerged. This voice claims that national resources are overly concentrated in high-tech sectors, squeezing the livelihood economy, and even potentially “triggering a spiral decline of the economy.” If this “emerging industries squeezing people’s livelihoods” argument is not an intentional mislead or deliberate obfuscation, then it reflects a failure to grasp the profound endogenous mechanisms of a new wave of technological revolution and industrial transformation, severing the dialectical relationship between “national strength” and “people’s wealth.”

People often say that ordinary citizens pursue nothing more than a peaceful and prosperous life. From this, it is clear that “peace” is the prerequisite and foundation for “prosperity.” Similarly, for a country, without national security and industrial independence, people’s well-being is like a tree without roots or water without a source. Imagine if chips rely entirely on imports; once external supply is cut off, the daily use of mobile phones, home appliances, cars, and even the operation of the entire social digital system in China would face threats; if China’s energy security is controlled by others, any fluctuation in international energy prices would become a direct threat to domestic industry and people’s livelihoods.

Therefore, vigorously developing strategic emerging fields such as chips and aerospace is not only about seizing the initiative in a new wave of technological revolution but also about preparing a “basic insurance” for the peaceful life of more than 1.4 billion people. Especially amid unprecedented global changes, the complex and volatile international situation, a stable, secure, and predictable domestic industrial foundation is a valuable resource in turbulent times and the most inclusive and fundamental dividend for people’s livelihoods. Without this macro stability, any micro-level improvements in people’s lives are impossible to discuss.

So, are emerging industries really over-absorbing resources and squeezing welfare for the people? First, emerging industries are not “resource black holes” that only absorb without producing but have strong industrial linkage effects and spillover effects. Analysis shows that one semiconductor job can drive an additional 5.7 jobs in downstream industries. A large chip manufacturing project can also stimulate upstream equipment, materials, and software suppliers, as well as downstream packaging, testing, and application development. The jobs created by a high-end manufacturing plant may be limited, but the R&D design, data services, inspection and testing, supply chain management, modern logistics, legal services, and other high-value peripheral service jobs generated are not insignificant. It is evident that these high-tech industries not only create numerous jobs at different levels but also form a new, more resilient industrial chain. This represents a profound transformation and upgrade of employment structure, rather than simply the disappearance of old jobs.

Moreover, the development of China’s technology sector itself is a process of technological inclusiveness. From the outset, China’s AI, semiconductor, and high-end manufacturing industries have been deeply rooted in the large Chinese market. Capital is mainly concentrated in front-end R&D and infrastructure, and once these results mature, they can empower countless industries and benefit millions at extremely low marginal costs. For example, AI-assisted diagnostic systems greatly improve diagnosis capabilities at grassroots hospitals; AI personalized learning systems are providing quality education resources at lower costs; government cloud services based on domestically produced chips and operating systems improve efficiency in grassroots government affairs, making it easier for citizens to handle their business; smart city construction makes transportation smoother and urban governance more refined… The “subtraction” of living costs, the “addition” of public services, and the “multiplication” of consumer choices are true reflections of the dividends of emerging industries penetrating into people’s livelihoods.

The current pressures felt by some citizens are not caused by technological change itself but by capacity reshaping and interest distribution issues during the transition from old to new driving forces. What should be done next is not to halt investment in the tech sector but to build more agile and fair transmission mechanisms and distribution systems, allowing technological dividends to penetrate faster, broader, and deeper. We see that from central to local levels, a series of policies are being implemented intensively: in response to technological change, China is vigorously promoting nationwide digital literacy and skills enhancement initiatives to help more workers cross the digital divide; implementing major projects like “East Data West Computing” to enable more small and medium-sized enterprises and individual developers to use high-quality data and computing power for innovation and entrepreneurship; encouraging leading enterprises to build more open innovation platforms and supply chain systems through special funds, tax incentives, and other policies; establishing more comprehensive unemployment insurance, medical security, and pension systems to build a more solid social safety net… All these are closely related to every ordinary person.

“National strength” and “people’s wealth” have always been dialectically unified and mutually reinforcing. Every effort China makes in core technology fields today is accumulating energy for the widespread improvement of people’s livelihoods in the future. The Chinese-style modernization vessel, carrying the dreams of over 1.4 billion people, is gaining formidable strength through overcoming technological challenges and building emerging industry clusters, enabling it to navigate storms and move steadily forward.

This article is an editorial from the Global Times.

Reviewed by | Zhou Yang

Edited by | Wang Xiaojiao