Yearender-Economic Watch: China powers into an efficiency revolution

BEIJING, Dec. 24 (Xinhua) -- In a world of intensified tech competition and fragmented supply chains, China is responding with a powerful internal engine: the efficiency revolution.

Moving beyond sheer output, this strategic pivot focuses on optimizing every input, elevating efficiency as the country transitions from a world factory floor to an innovation hub for systemic industrial advancement.

In its growth blueprint for the next five years, China has identified the "steady improvement of total factor productivity (TFP)" as a key metric for pushing forward high-quality development.

"Improving TFP is a core indicator of new quality productive forces, and for gauging the quality of economic development," said Guo Liyan, deputy director of the Institute of Economic Research at the Chinese Academy of Macroeconomic Research.

TECH CLUSTERS

In a Shanghai hospital, a quadriplegic patient navigated a smart wheelchair and commanded a robotic dog using only thoughts. The new trial was powered by a homegrown brain-computer interface (BCI) that was rapidly translated into a clinical stage through joint efforts by research teams, startups, and neurosurgeons.

The establishment of a BCI incubator next to China's top-tier Huashan Hospital in Shanghai is a calculated move by the city to fast-track this emerging industry.

As the core of the Yangtze River Delta, one of China's most complete industrial chains, Shanghai, together with the southern Greater Bay Area and the Beijing-centered industrial cluster, has been positioned as an international hub for scientific and technological innovation.

The BCI trial stands as an example of how China is accelerating a transformation into a global technology laboratory, leveraging its foundational strength as the world's strongest manufacturing base.

Startups like UBTECH and EngineAI in Shenzhen are pushing boundaries, developing machines capable of executing increasingly refined tasks across both production lines and real-world daily scenarios.

The Greater Bay Area, where Shenzhen is located, draws on its deep-rooted expertise in consumer electronics manufacturing to effectively reduce both the R&D costs and development cycles for next-generation smart hardware.

"The region's mature supply chains enable dramatic cost reductions: components that once cost 2,000 yuan (about 284 U.S. dollars) to import now cost just 200 yuan locally," said Zhao Tongyang, EngineAI's founder.

Local governments are required to tailor national policies to their strengths. In the island province of Hainan, a satellite "superfactory" is rising -- one designed to produce 1,000 satellites annually, fully integrated with local commercial launch infrastructure. Now, with special customs procedures, the free trade port is poised to offer even greater cost advantages for aerospace manufacturing.

China, which boasts a workforce of more than 72 million highly skilled professionals, continues to tap into its "engineer dividend," a vast, highly skilled workforce aligned with industrial needs.

An engineer training initiative the country is pushing has nurtured nearly 26,000 engineering master's and doctoral students through collaborations between universities and enterprises.

In July, Deep Robotics, a leading Chinese private robotics startup, teamed up with Zhejiang University in the eastern Chinese city of Hangzhou to launch a postdoctoral workstation. The first researcher has since started research at the facility.

It is this "China speed" in transforming innovative ideas into market-ready products that has attracted leading global high-tech corporations, including AstraZeneca and Porsche, to establish and expand their R&D centers in China this year.

Through the China R&D Center, Porsche can directly integrate into the country's rapidly evolving innovation ecosystem, shrinking R&D cycles from years to months, said Porsche AG Management board member Detlev von Platen.

Volkswagen's R&D team in the eastern Chinese city of Hefei completed the entire process of developing, testing, and commercializing assisted-driving technology in just 18 months, a timeline notably shorter than its German counterpart.

SUSTAINABILITY

China's drive for efficiency is closely tied to its green transition, while local governments are encouraged to develop productive forces in line with local conditions.

In Inner Mongolia's Xing'an League, a landmark green methanol project is turning agricultural waste into clean fuel. The project uses wind power to produce green hydrogen, which is then combined with corn stalks to produce methanol. Wind and corn are the most abundant natural endowments in this region.

Such a clean alternative to fossil fuels, crucial for reducing carbon emissions in the shipping industry, has already integrated the Chinese hinterland into the global supply chain. Industry giant Maersk has signed agreements to purchase green methanol there.

The renewables have helped bring the growth of greenhouse gas emissions to a virtual standstill in China and put a global carbon peak within reach, Science magazine commented, naming the renewable energy surge led by China the 2025 Breakthrough of the Year.

The surging demand for electricity, driven by the rapid growth of AI computing power, has also been incorporated into China's new energy landscape.

In October, the world's first wind-powered commercial underwater data center project was completed in Shanghai. After the demonstration project is put into operation, it will achieve a renewable energy usage rate exceeding 95 percent, and reduce electricity consumption by 22.8 percent compared to land-based data centers.

AGILITY, RESILIENCE

Amid global volatility, such as trade tensions, Chinese manufacturers are learning to put agility at the heart of their operations. They transform production lines with digital tech, flipping small-batch orders around at a rapid speed to explore untapped demands.

At a textile hub in east China's Shandong Province, flexible manufacturing allows designers to tweak samples within the hour and shrinks restock cycles from weeks to 24 hours flat.

Shanghai startup Blacklake has turned its industrial-internet platform into the go-to operating system for China's small factories: live job tracking, instant rush-order alerts, razor-thin cost and margin math, all tearing down data silos. A total of 25,000 small and medium-sized enterprises already run on it.

The Nanjing-based IT firm SKYTECH launched an AI tool that supports European Union-bound exporters by automating carbon footprint reporting and carbon tariff calculations.

A software called NetEase Foreign Trade Express uses "AI employees" to develop overseas customers, which can automatically identify target customers with an accuracy rate of over 95 percent, saving foreign trade companies up to 1.5 working days per week in customer search time.

At a Beijing expo this July, digital tools like these stole the show, helping to turn global supply chains into more resilient networks.

"Digital tech empowers China's upstream and downstream players in the industrial chain to connect, collaborate seamlessly, and operate with high efficiency," said Liu Chongming, vice president of Blacklake. ■