Xi Jinping pushes industrial upgrading with “local characteristics” in Yunnan
Xi Jinping wants no industry left behind in his industrial upgrading mission.
On Thursday, the big man wrapped up a two-day tour of Yunnan province, following a trip to neighboring Guizhou.
During a meeting with Yunnan provincial leadership, Xi emphasized that:
“Given the differences in resource endowments and foundational conditions across regions, efforts in industrial transformation and upgrading should be grounded in reality, follow economic principles, and highlight unique strengths”
Xi urged Yunnan officials to focus on:
- Upgrading their resource-based industries, like energy, tobacco, and minerals
- Accelerating the development of tourism and “highland specialty agriculture” industries like floriculture and coffee planting
- Building Yunnan into a regional trade and investment hub for South and Southeast Asia
Some context: One big challenge with China's industrial policy is that local governments either blindly follow central directives or copy-paste what worked elsewhere – often without tailoring it to local conditions.
- The result? Misallocated resources, wasteful spending, and overcapacity.
Get smart: Until China’s official KPI system is rewired to reward policy innovation over short-term economic gains, risk-averse local officials’ cookie-cutter approach to industrial policy will continue to drag on the country’s broader industrial upgrading agenda.