Answering questions about China's economy: Will the development of emerging industries squeeze the welfare of ordinary people?

Source: Global Times

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 causing a “spiral decline of the economy.” If this “emerging industries squeezing people’s livelihoods” argument is not an intentional attempt to mislead or confuse the public, then it reflects a failure to grasp the profound endogenous mechanisms of a new round of technological revolution and industrial transformation, and it severs the dialectical relationship between “a strong nation” and “a wealthy people.”

People often say that ordinary folks pursue nothing more than a peaceful and prosperous life. From this statement, 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 directly threaten domestic industry and people’s livelihoods.

Therefore, vigorously developing strategic emerging fields such as chips and aerospace not only helps seize the opportunity in a new technological revolution but also serves as a “basic insurance” for the peaceful life of over 1.4 billion people. Especially amid unprecedented global changes, the international situation is complex and volatile. A stable, secure, and predictable domestic industrial foundation is not only a valuable resource in turbulent times but also 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, do emerging industries really over-absorb resources and squeeze public welfare? 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 job in the semiconductor industry can drive 5.7 additional jobs downstream. 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, 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 clear that these high-tech industries not only create a large number of jobs at different levels but also form a new, more resilient industrial chain. This is a profound transformation and upgrade of employment structure, not merely the disappearance of old jobs.

Moreover, the development of China’s technology sector itself is a process of technological inclusiveness. Since its inception, 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 construction. Once these results mature, they can empower numerous industries and benefit millions at extremely low marginal costs. For example, AI-assisted diagnostic systems greatly improve the diagnostic capabilities of 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 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 brought by emerging industries into people’s lives.

Currently, some people’s perceived pressure does not stem from technological change itself but from 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 ordinary people.

“The strength of the nation” and “the wealth of the people” have always been dialectically unified and mutually reinforcing. Every effort China makes in core technological fields is accumulating energy for the future enhancement of people’s livelihoods. The Chinese-style modernization vessel, carrying the dreams of over 1.4 billion people, has gained the formidable strength to overcome technological challenges and build emerging industry clusters through continuous breakthroughs, enabling it to navigate through storms steadily and far-reaching.