China’s Traditional Industries Transform in New Plan

Traditional industries account for more than 80 percent of China’s manufacturing sector and serve as the foundation of the country’s modern industrial system, according to a comprehensive Xinhua News Agency report published this week. In the first year of the 15th Five-Year Plan (2026-2030), these established sectors are undergoing significant transformation through technological innovation, digital integration, and green upgrades, reflecting China’s broader economic restructuring efforts.

Strategic Policy Framework

The 15th Five-Year Plan places “Building a Modern Industrial System and Consolidating the Foundation of the Real Economy” as the top strategic task among 16 major initiatives, with a dedicated chapter on optimizing and upgrading traditional industries. The plan was approved by the 14th National People’s Congress in March 2026.

At a Central Politburo meeting held on July 30, party leadership deployed economic work for the second half of the year, releasing a clear signal to “continuously promote the transformation and upgrading of traditional industries.” This builds on directives from General Secretary Xi Jinping, who has emphasized that “the real economy cannot be abandoned, and the traditional industries within the real economy cannot be abandoned. They must achieve transformation and upgrading through technological innovation.”

High-End Manufacturing Breakthroughs

Frontline observations by Xinhua’s “Industry Development Opens New Chapter” reporting team, which visited more than ten provinces, reveal how traditional industries are climbing the value chain. In Dalian, Liaoning Province, Hengli Heavy Industry achieved a global milestone on July 22 when three 306,000 DWT Very Large Crude Carriers (VLCC) and one 325,000 DWT Very Large Ore Carrier (VLOC) were launched simultaneously from the same dry dock with a construction cycle of just 88 days — a new world record for the shortest dock period for simultaneous construction of ultra-large vessels.

Days later, Hengli signed contracts with three internationally renowned shipowners for six Very Large Ammonia Carriers (VLAC), including four of 93,000 cubic meters and two of 88,000 cubic meters, marking a breakthrough in high-value-added gas carrier construction. According to international shipping industry reports, Hengli’s order book now exceeds 295 vessels, ranking first globally among single shipyards by compensated gross tonnage.

China’s shipbuilding industry set new records in the first half of 2026 for completed tonnage, new orders, and order backlog, continuing to lead the global market. The sector’s evolution from single cargo ship manufacturing to diversified high-end vessel clusters exemplifies the broader shift toward premium manufacturing.

Digital Transformation Across Sectors

In Anping County, Hebei Province — known as “China’s Wire Mesh Hometown” — the industry is reinventing itself through high-value-added products. The county now adds more than 20 new product types annually, including high-precision stainless steel mesh (500+ mesh) used in semiconductor packaging, high-temperature resistant vibrating screens for aviation engine components, and high-pressure/corrosion-resistant mesh for transportation infrastructure and deep-sea exploration. In the first half of 2026, the wire mesh industry cluster’s operating revenue grew 6.9 percent year-on-year.

“This can sell for 10 euros each in Europe,” Anping County Deputy Mayor Zhao Chaoying said, holding up a stainless steel cleaning cloth designed to replace traditional steel wool balls.

Digital technology is also transforming traditional food processing. In Fuling District, Chongqing, the mustard industry has built an “Industrial Brain” platform since 2024 that connects nearly 20,000 farmers through mobile-based agriculture. According to Chongqing’s agriculture department, the platform integrates 40 companies, 810 semi-processors, and over 18,000 farmers across the full supply chain. In 2025, the contracted production rate for mustard head order-based production exceeded 80 percent.

“Rich data has become the ‘new engine’ for industrial upgrading,” said Huang Xiaolin, deputy director of the Fuling Mustard Industry Development Center.

Nationwide, China has built over 56,000 basic-level, 9,000-plus advanced-level, and 500-plus excellent-level smart factories, and cultivated 15 leading-level smart factories. AI technology application penetration rate among above-scale manufacturing enterprises exceeds 30 percent, according to the Xinhua report.

Green Manufacturing Gains Momentum

Environmental transformation is emerging as a key competitive advantage. HBIS Shigang, a special steel enterprise founded in 1957, relocated to Jingxing Mining Area in Shijiazhuang in 2020, completely abandoning the blast furnace long-process in favor of all-scrap electric arc furnace short-process steelmaking. Pollutant emissions — including particulates, SO2, and NOx — have been reduced by 75 percent compared to traditional long-process methods, with carbon emissions also cut by 75 percent.

This green transformation has translated into tangible market competitiveness. Zhang Xiaohui, deputy director of Shigang’s rolling mill, recounted how an international bearing industry leader who had searched multiple countries for a green steel supplier said excitedly upon visiting Shigang: “I can finally tell my customers that we have found a green steel supplier in China that meets low-carbon requirements.”

China has cultivated 451 industrial product green design demonstration enterprises and formed nearly 200 green design product evaluation standards. Other notable examples include Shenyang Machine Tool’s waste heat recovery system, Chongzuo Liwen Paper’s AI quality inspection system with over 99.5 percent impurity identification rate, and the Datang Yuncheng 630°C national power demonstration project that burns only 256.28 grams of coal per kWh, reducing carbon emissions by 540,000 tons annually.

Economic Impact and Outlook

These transformation efforts are yielding measurable results. In the first half of 2026, China’s GDP reached 69.6 trillion yuan, up 4.7 percent year-on-year, with an increment of 3.6 trillion yuan — the largest H1 increment in five years. Industry contributed over 35 percent to economic growth, and manufacturing value-added share of GDP rose to 26.2 percent.

Policy support has been instrumental in driving this transformation. The government has allocated 200 billion yuan in ultra-long-term special treasury bonds for large-scale equipment renewal, launched manufacturing digital transformation action plans, and implemented industrial foundation reengineering projects. As Science and Technology Daily reported, these measures are accelerating the modernization of traditional sectors.

A consensus has emerged among enterprises surveyed: “Traditional industries do not represent backward productive forces.” Whether basic raw material industries, major equipment industries, or consumer goods industries, only by adhering to developing new quality productive forces according to local conditions and continuously strengthening internal capabilities can they navigate economic cycles and achieve sustained growth.

As China’s economic policy framework continues to emphasize, the transformation of traditional industries is not about abandoning the old but about reinvigorating it. With continued policy support, technological innovation, and green investment, China’s traditional manufacturing base is positioning itself for sustained competitiveness in the global economy — a crucial element of the country’s modernization drive through 2030 and beyond.