What has China done right in boosting industrial resilience?
China's industrial economy has maintained its growth momentum despite global economic slowdown and sporadic resurgences of COVID-19.
Although global economic slowdown and sporadic resurgence of COVID-19 cases at home have inevitably affected trade, supply chain stability and commodity prices since the beginning of the year, China's industrial economy has maintained its growth momentum.
The value-added industrial output went up 3.4 percent year on year in the first half of the year (H1). In June alone, industrial output growth quickened to 3.9 percent year on year, expanding by 3.2 percentage points from that in May.
Industrial firms each with annual main business revenue of at least 20 million yuan ($2.95 million) saw their combined profits exceed 4.27 trillion yuan in the same period, or up 1 percent year-on-year.
In June alone, profits of major industrial companies went up 0.8 percent year on year, reversing declines in April and May.
The figures showcase the strong resilience and development potential of China's industrial economy. A close look at the policies the Chinese government has introduced in major areas of focus may explain why its industrial economy is booming despite challenges.
SMOOTHING SUPPLY CHAINS
China has made stable operation of its industrial and supply chains a top priority, as it looks to maintain the rebounding momentum of its industrial economy after flare-ups of COVID-19 in recent months.
The authorities have established a "white list" mechanism and carried out cross-departmental and cross-regional coordination to support enterprises in key areas and industries as they resume production.
Enterprises on the "white list" are those involved in the production and transportation of materials for medical and epidemic prevention, people's daily necessities, agricultural production, and industries of strategic importance.
Industrial and supply chain coordination platforms have been established in key sectors such as automobile manufacturing and medical supplies.
Early warning mechanisms for companies to keep track on automobile parts inventory and bulk raw materials supply have also been built to help companies solve problems concerning raw materials, employment, logistics and transportation.
According to the Ministry of Industry and Information Technology (MIIT), the nationwide industry and information technology system helped resolve more than 54,000 business problems timely in the first six months, supporting the upstream and downstream to resume work and production simultaneously
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RELIEVING BURDENS ON SMEs
Small and Medium-sized enterprises (SMEs), hard-hit by the epidemic, are an important driving force for stable employment and economic growth in China. Supporting the development of SMEs has always been high on the government's work agenda.
The government's policy mix to relieve burdens on SMEs includes tax incentives, easier access to financing, as well as rent and fee reduction.
Thanks to these policies, the accumulative tax refunds, tax and fee cuts, and tax and fee deferrals for SMEs reached nearly 1.8 trillion yuan in H1.
Localities and relevant departments have served SMEs more than 20 million times, focusing on policy promotion and implementation, and technological and management assistance.
To encourage the long-term development of SMEs, China plans to cultivate about 3,000 new "little giants," the novel elites of SMEs that are engaged in manufacturing, specialize in niche markets and boast cutting-edge technologies, this year
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INDUSTRIAL TRANSFORMATION
To push forward industrial transformation and upgrading, China has sped up the development of the industrial internet, which has already been applied to 45 major categories of the national economy.
The scale of the industrial internet industry has exceeded 1 trillion yuan.
The country currently has more than 3,100 "5G + Industrial Internet" projects. Of that number, 700 projects were established during the second quarter of the year.
More efforts will be made to comprehensively upgrade and optimize the technical, industrial, network, application and ecological system of "5G + Industrial Internet," and form more scenarios to be applied to production.
China's digital economy, ranking second in the world, has seen its growth accelerated in H1, especially in online shopping, online education, telemedicine, and other "contactless" economy.
The government has made efforts to accelerate the development of new digital infrastructure, promote the integration of the digital economy and the real economy, strengthen digital economy governance, foster a sound industrial development ecosystem, and deepen international cooperation.