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History

1949–1978: State-led Industrial Development

Following the establishment of the People's Republic of China in 1949, the government implemented a Soviet-style centrally planned economy, prioritizing heavy industries such as steel, coal, and machinery. The First Five-Year Plan (1953–1957), with technical and financial support from the Soviet Union, led to significant industrial growth and the formation of a basic national industrial framework. During this period, 156 major industrial projects were launched, including large-scale enterprises in military production, metallurgy, chemicals, machinery, and energy. These efforts aimed to build a relatively complete industrial base and modern national defense system, significantly raising China’s industrial capacity and technological level to one comparable with that of advanced countries in the 1940s. However, the system was characterized by high input reliance, low efficiency, and imbalanced output structures, including chronic overproduction in some sectors.

Between 1958 and 1962, the Great Leap Forward aimed to accelerate industrialization through rural collectivization and mass mobilization. This campaign caused severe disruptions to both agriculture and industry, and is widely associated with a major famine that resulted in tens of millions of deaths. The subsequent Cultural Revolution (1966–1976) further destabilized the industrial sector, as many technical experts and administrators were purged, leading to administrative paralysis and production inefficiencies.

Despite these setbacks, China had, by 1978, developed a foundational industrial base dominated by state-owned enterprises in sectors such as chemicals, metallurgy, and machinery. Industrial growth during the 1957–1978 period averaged approximately 8.8 percent annually, though growth rates fluctuated considerably from year to year. According to scholars, persistent inefficiencies within the command economy model contributed to the eventual launch of economic reforms at the end of the 1970s.

1978–Present: Industrial Reform, Growth, and Modernization

Since the launch of economic reforms in 1978, China's industrial sector has undergone profound structural transformation. The shift from a centrally planned economy to a market-oriented system led to the diversification of ownership forms, the expansion of manufacturing, and the gradual rise of China as a global industrial power.

Reform and Ownership Transformation

In the early reform years, the state began loosening direct control over industrial enterprises. The state-owned enterprise (SOE) system, which dominated China's industrial landscape in the pre-reform era, was gradually restructured. From the mid-1980s onward, policies encouraged managerial autonomy, profit retention, and performance-based contracts. During the 1990s, large-scale SOE reforms led to widespread privatization and the emergence of shareholding systems. Many small and medium-sized SOEs were closed or merged, while key large enterprises were corporatized and listed on stock markets, both domestically and abroad.

At the same time, non-state industrial sectors expanded rapidly. Township and village enterprises (TVEs) emerged as a dynamic force in rural industrialization during the 1980s and early 1990s. Private enterprises were gradually legalized and expanded into manufacturing, textiles, electronics, and other light industries. By the early 2000s, non-state enterprises accounted for the majority of industrial output value.

Export-Oriented Manufacturing and WTO Integration

China's accession to the World Trade Organization (WTO) in 2001 further accelerated its industrial development. The country's industrial base became increasingly export-oriented, with labor-intensive manufacturing—such as garments, electronics, and toys—playing a central role. Foreign direct investment (FDI), particularly in coastal provinces, introduced advanced technologies and management practices. Joint ventures and wholly foreign-owned enterprises flourished in sectors like automotive, consumer electronics, and telecommunications.

Between 2001 and 2010, China became known as the "world’s factory," producing a growing share of global manufactured goods. By 2010, it had overtaken the United States to become the world's largest manufacturing nation by value added.

Industrial Upgrading and Innovation

In the 2010s, Chinese policymakers prioritized shifting from low-end manufacturing to higher-value-added, innovation-driven industries. The “Made in China 2025” initiative, launched in 2015, aimed to upgrade ten key industrial sectors, including robotics, aerospace, advanced rail equipment, new energy vehicles, and medical devices. The goal was to enhance domestic technological capabilities and reduce dependence on imported components and equipment.Research and development (R&D) spending increased significantly, with industrial firms becoming major contributors. As of the early 2020s, China ranked among the top global countries in manufacturing output for high-tech industries, such as solar panels, 5G equipment, and electric vehicles. Government policies supported strategic emerging industries through subsidies, tax incentives, and industrial parks.

SOEs continued to dominate in strategic sectors such as energy, telecommunications, and heavy industry, while the private sector and foreign-invested firms played leading roles in consumer goods, light industry, and technology manufacturing.

Aerospace industry

This paragraph is an excerpt from Chinese space program.

China's space program dates back to 1956, when the country established the Fifth Academy of the Ministry of National Defense, the predecessor of today's China National Space Administration (CNSA). Over more than five decades of development, China has become one of the world's leading space powers. From launching its first artificial satellite to developing the BeiDou Navigation System, from its first carrier rocket to its first manned spaceflight, and from Tiangong-1 to the successful Chang’e lunar missions, China has achieved remarkable milestones that have attracted global attention.

Artificial Satellites

On April 24, 1970, China launched its first artificial satellite, Dong Fang Hong 1. On December 27, 2012, the BeiDou Navigation Satellite System, independently developed and operated by China, officially began providing regional services. By early 2013, the People's Republic of China had successfully developed and launched 140 artificial satellites of various types.

Carrier Rockets

From October 1996 to the end of 2005, the Long March series of carrier rockets achieved 46 consecutive successful launches. Significant technological breakthroughs were made in the development of a new generation of launch vehicles, including the successful progress in the development of a 120-ton thrust liquid oxygen/kerosene engine and a 50-ton thrust liquid hydrogen/liquid oxygen engine.

Human Spaceflight

On November 20, 1999, China successfully launched and recovered its first uncrewed test spacecraft, Shenzhou 1. On October 15, 2003, astronaut Yang Liwei became the first Chinese person in space aboard Shenzhou 5. From October 12 to 17, 2005, the Shenzhou 6 mission completed a five-day crewed flight with two astronauts. In 2008, during the Shenzhou 7 mission, astronaut Zhai Zhigang conducted China's first extravehicular activity (spacewalk). In 2011, China launched its first prototype space station module, Tiangong 1, which successfully docked with the subsequently launched Shenzhou 8 spacecraft.

Lunar Exploration

On December 14, 2013, Chang'e 3 successfully landed on the Moon. On November 1, 2014, the Chang'e 5-T1 mission completed a successful return to Earth from lunar orbit.