SCIO briefing on China's industrial and communications development in Q1

The State Council Information Office held a press conference Thursday afternoon in Beijing to introduce China's industrial and communications development in the first quarter of 2020. April 26, 2020

Xi Yanchun:

Thank you, Mr. Huang Libin. Next, please ask your questions, and please identify your media outlet before asking questions.


I have two questions. First, we have noticed that the value added of industries above designated size in the first quarter fell by 8.4% year-on-year, and this was a significant decline. Will this trend continue? How do you view the trend of the industrial economy in the first half of this year and the whole year? Second, at a meeting yesterday, the Central Leading Group of COVID-19 Prevention and Control proposed a large-scale nucleic acid and antibody testing. Key populations will be tested, and large companies and organizations will be tested if they are willing. Can you tell us about the production and supply situations of our nucleic acid test kits? Thank you.

Huang Libin:

Thank you for your question. I will answer your first question first. I want to explore it from four aspects: the first is objective analysis, the second is a dialectical view, the third is to turn crises into opportunities, and the fourth is to maintain composure.

First of all, it is necessary to objectively analyze the impact and influence of the epidemic on economic operations, accurately assess its trends, and lay a good foundation for macro-control. Looking at the industrial economy in the first quarter, the added value of the nation's industries above designated size fell by 8.4% year-on-year, and for the first two months, it dropped by 13.5% year-on-year; the utilization rate of industrial capacity was only 67.3%, down 8.6 percentage points year-on-year; and the percentage of loss incurring China's enterprises reached 36.4%. The sudden outbreak of COVID-19 has had a huge impact on the operation of China's industrial economy. In accordance with the unified deployment of the CPC Central Committee and the State Council, on the premise of strict prevention and control of the epidemic, we orderly promote the coordinated resumption of work and production nationwide by region and by scale. The value added of industrial enterprises above designated size in March narrowed its decline to 1.1% year-on-year. PMI rebounded 16.3 percentage points from February. The flash report indicated that in the early and middle of April, the growth rate of electricity generation and consumption has changed from negative to positive, and the industrial economic operation is developing in a positive direction. The current global pandemic is spreading rapidly. Since mid-March, there are more and more canceled orders as well as cargo jettisons and rejections in foreign trade. As the order problems emerged, pressures on enterprise production and management have increased. Industrial economic operations still face significant challenges.

Second, by taking advantage of our industries, markets and institutions, we will respond precisely to the proactive changes in economic performance, securing stable expectations and boosting confidence. Generally, the impact of the epidemic, which is short-term and basically controllable, will not change the upward trend of our economy in the long run. However, its impact, resulting in a drop in supply and demand, and causing unsmooth internal and external business cycles, has affected our economy in the first quarter of this year. The driving force of consumption slackened as the national per capita consumption expenditure declined by 12.5% compared with last year after deducting price factors and the consumption of traditional bulk commodities, such as, vehicles and housing, dived. The launch of investments, with those in fixed assets sliding by 16.1% year on year, including a drop of 25.2% in the manufacturing industry, made it difficult to secure growth. Overseas demand dwindled greatly with export delivery value from industrial enterprises above designated size showing a year-on-year fall of 10.3%. The three demands, which slowed simultaneously, led the manufacturing industry to slump in the first three months. Nevertheless, with the successful containment of the epidemic and the resumption of economic and social normalcy in an orderly manner, proactive changes have emerged in the market. In March, investments into fixed assets and retail sales of consumer goods dropped by 8.8% and 15.8%, respectively, registering declines narrowed by 15.7 and 4.7 percentage points compared to the previous two months. Moreover, the decrease of added values of industrial enterprises above designated size narrowed by 12.4 percentage points. These changes mirror the resilience of our economy. With the implementation of a raft of policies and arrangements adopted by the CPC Central Committee in an effort to expand domestic demand, an increasing number of positive factors with consolidated market expectations and confidence will work together to improve the complete resumption of production, helping it fulfill the target output.

Third, while perceiving the opportunities and challenges brought forth by the pandemic in an objective and dialectical way, we should seize the opportunities of the crisis to develop and sustain the upward trend of the economy in the long run. With the global economy still being affected by the pandemic, the negative repercussions should be examined in terms of their extensiveness, sustainability and complexity in order to minimize the losses and impact that continue to affect China's economy. Therefore, we need to seize the window of opportunity by changing passive reactions into proactive ones, strengthening our areas of weakness, smoothing business cycles, and promoting industrial upgrading. Our holistic industrial chains should continue to play an increasingly important role in unclogging global supply chains, addressing underlying problems, undertaking productions of transferred overseas bills, and supplementing global supply scarcities. Considering the weaknesses exposed amid the pandemic, we should accelerate progress in core technologies from key industries, continue to upgrade fundamental industry capacities, promote industrial chains to pursue modernization and advancement, and ensure the safety of supply chains. With new forms of industry booming amid the pandemic, such as remote online diagnoses, office management, education and shopping, we will step up our efforts to support and direct them, awaiting full-fledged development, to become new backbones and driving forces that stimulate the economy to make further progress.

Fourth, with a resolution to defend the bottom line and maintain strategic focus, we should be capable of coping with the impact of the pandemic, preventing the short-term hit from developing into an unpredictable situation and maintaining stable fundamentals to confront challenges caused by external uncertainties. The Political Bureau of the CPC Central Committee convened on April 17, 2020, for a meeting on regular COVID-19 epidemic prevention and control measures and deployment of the current economic work. At the conference it was stressed that the country will "offset the impact of the pandemic with stronger macro policies" and "resolutely implement strategies to expand domestic demand." The Ministry of Industry and Information Technology (MIIT) will adhere to the deployment made by the CPC Central Committee and the State Council to strengthen our efforts to ensure stable performance in six key areas, namely, stability in employment, finance, foreign trade, foreign investment, domestic investment, and market expectations, and implement concrete measures to ensure employment for residents, basic wellbeing of the people, development of market entities, food and energy security, stable industrial and supply chains, and operation at the grassroots level. In doing so, we will continue with the complete resumption of work and production, fulfilling target output, and ensuring stable industrial and supply chains that allow the industrial economy to develop in an orderly manner. First, we will use all means to create an environment that is conducive to the resumption of work and production and the fulfillment of target output, and support economic recovery by ensuring smooth cycles of industrial and supply chains. Second, we will strengthen our areas of weakness, foster new driving forces to create high-quality supplies to lead and create new demands, and boost the high-quality development of the manufacturing industry. Third, we will ensure the implementation of policies and measures adopted consecutively to offset the pandemic's impact, precisely addressing the difficulties of micro, small and medium-sized enterprises to guarantee the stable fundamentals of economic development. Fourth, we will continue to deepen market-oriented reforms to improve the business environment, pursue high-level opening-up, lessen burdens on enterprises, and stimulate market vitality.

As for the second question, some 29 types of COVID-19 test kits produced by 25 companies have been approved to come to market. The daily production capacity is now 5 million. The Ministry of Industry and Information Technology (MIIT) is monitoring its production and supply every day. Based on current conditions, production is normal and inventory is sufficient. Thank you.

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