China's high-tech push seeks to reassert global factory dominance

Tianjin, China – At a factory in China's north, workers are busy testing an automated vehicle designed to move bulky items around industrial spaces, one of a new generation of robots Beijing wants to shift the country's manufacturing up the value chain. The robot's Tianjin-based maker has received tax breaks and government-guaranteed loans to build products that modernize China's vast factory sector and advance its technological expertise. "The government is paying great attention to the manufacturing sector and the real economy -- we can feel that," said Ren Zhiyong, general manager of Tianjin Langyu Robot Co. China is backing R&D efforts by high-tech manufacturers like Langyu, driven by an urgent desire to reduce reliance on imported technology and reinforce its dominance as a global factory power, even as it cracks down on other parts of the economy. Beijing's pivot puts the focus on advanced manufacturing, rather than the services sector, to steer the world's second-largest economy past the so-called "middle income trap", where countries lose productivity and stagnate in lower-value economic output.