China has adopted a raft of policy measures to push ahead digital transformation in the manufacturing industry — a crucial step toward promoting new industrialization and constructing a modern industrial system, according to the State Council, China's Cabinet.

A State Council executive meeting chaired by Premier Li Qiang on Saturday highlighted that it is essential to identify the specific requirements faced by different sectors within the manufacturing industry to develop tailored digital solutions.

Accelerating core technological breakthroughs and promoting the widespread application of these achievements are key priorities. Efforts should be made to facilitate equipment interconnectivity, mutual recognition of protocol, formulation of standards, and platform construction, according to the meeting.

The meeting emphasized the importance of supporting digital transformation in small and medium-sized enterprises. This support should be integrated with large-scale equipment renewal initiatives and projects focused on technological upgrades.

It was also stressed at the meeting that enhancing public service platforms and exploring long-term mechanisms to facilitate the digital transformation of smaller businesses are necessary actions.

According to data released by the Ministry of Industry and Information Technology, China's core industrial internet sector reached a scale of 1.35 trillion yuan ($187 billion) in 2023, which benefited 49 categories of the national economy.

Meanwhile, by the end of last year, China had successfully nurtured 421 national-level intelligent manufacturing demonstration factories, along with over 10,000 provincial-level digital workshops and intelligent factories.

In the pursuit of fostering new quality productive forces, technological research and development and digital transformation stand as the two primary routes, said Pan Helin, a member of the Expert Committee for Information and Communication Economy.

In comparison to the high capital investment required for technological R&D, digital transformation demands less investment while yielding higher returns, making it a cost-effective option for businesses, especially smaller ones, Pan said.

Digital transformation has emerged as a powerful tool for SMEs to optimize production processes, achieve precision management and improve supply chain management, Pan said, adding that by embracing digital technologies, SMEs can unlock numerous benefits that contribute to cost reduction, improved product quality and enhanced customer satisfaction.

While the benefits of digital transformation are widely recognized, many smaller businesses face challenges in undertaking this transformative journey due to limited resources and a reluctance to bear high risks, experts said.

In light of this, there is a growing need for targeted support to facilitate the digital transformation of SMEs, enabling them to quickly harness the power of digitalization, enhance their competitiveness, and establish sustainable mechanisms for ongoing digitalization, said Wen Bin, chief economist at China Minsheng Bank.

Going forward, monetary policy will continue to prioritize precision and effectiveness. As part of this approach, the newly established 500 billion yuan fund dedicated to technological innovation and technical upgrades will be fully leveraged to provide targeted refinancing for SMEs in the technology sector and key industries undergoing digital, intelligent and high-end transformation, Wen said.