China Daily:

Mr Xu, China's economy has been recovering steadily this year. We have also seen considerable growth in some new industrial products and consumer goods in foreign trade. It can also be seen from the third-quarter data from the National Bureau of Statistics this morning that the year-on-year growth of some industries such as innovation investment and new energy vehicles has also been considerable. Please comment on how you see the role these industries play in economic development. As you mentioned just now, the investment situation will face some pressure in the third and fourth quarters. What are your suggestions for the next step to encourage these industries to make greater contributions to economic growth? Thank you.

Xu Xianchun:

Thanks for your question. Indeed, despite considerable downward pressure on the economy, some new industrial products and new forms and models of business in the field of foreign trade continue to maintain relatively rapid growth.

In terms of new industrial products, driven by the acceleration of 5G construction, the growth of consumer electronics and automotive electronics demand, the improvement of industrial automation, and other factors, the output of new products maintained rapid growth. This morning, the spokesperson of the National Bureau of Statistics said that in the first three quarters, the output of new energy vehicles, industrial robots, and integrated circuits increased by 172.5%, 57.8%, and 43.1%, respectively, year-on-year, with an average growth rate of more than 28% in both years. In terms of new business forms and models in the field of foreign trade, some policies and measures have been implemented and are effective. New forms and models of foreign trade, represented by cross-border e-commerce, have injected new momentum into foreign trade. According to the data released by the General Administration of Customs, in the first three quarters of this year, China's cross-border e-commerce imports and exports increased by 20.1%, and market procurement exports increased by 37.7%.

In recent years, new economy drivers have played important roles in driving economic growth. Before the COVID-19 outbreak, economic growth showed a downward trend, but the rapid growth of new economy drivers played an important role in curbing the slowdown. During the serious outbreak of the epidemic, the economy declined, but new economy drivers still maintained rapid growth. The country's GDP fell by 6.8% in the first quarter of last year. However, the added value of information transmission, software, and information technology services increased by 13.2%, contributing 0.6 percentage points to GDP growth and playing an important role in slowing down the economic decline. New economy drivers have also played important parts in promoting economic recovery. In the first three quarters of this year, the added value of high-tech manufacturing above designated size increased by 20.1%, and the added value of information transmission, software, and information technology services increased by 19.3%. Online retail sales of physical goods also maintained rapid growth. Therefore, new economy drivers have played important roles in economic growth.

Going forward, we can consider promoting the development of new economy drivers in various ways.

First, we will actively promote the digital transformation of enterprises. I am leading a research team at the Tsinghua China Data Center to study new economy drivers. We have surveyed more than 70 enterprises of new business forms and models in 13 provinces and cities. We deeply understand how important digital transformation is to the survival and development of enterprises. All enterprises with successful digital transformation have realized digitization from product R&D and design, production and operation, sales to after-sales management, greatly improving their ability to adapt to the market as well as improving production and operation efficiency and reducing production and operation costs. Those enterprises whose digital transformation was unsuccessful or has just started are facing a series of difficulties and problems. Therefore, we believe that digital transformation is very important. General Secretary Xi Jinping attached great importance to digital transformation, pointing out that “The global economy is embracing the trend of digital transformation, and the new round of industrial revolution will reshape human society in profound ways.” Digital transformation is very important, and we should actively promote the digital transformation of enterprises.

Second, we should strengthen support for research and development (R&D) and innovation, strive to achieve breakthroughs in key and core technologies, and actively cultivate new points of economic growth. As the traditional driving force weakens, new ones must be replenished through R&D and innovation. This is of great importance to economic growth.

Third, we should continue to improve the business environment and policy system. The business environment is of vital importance to a country or a region. A better business atmosphere and policy system can help boost the development of new market entities and enhance China's economic resilience.

Fourth, we should continue to consolidate the cluster-based, informatized and smart development of new products, for example, New Energy Vehicles (NEVs), industrial robots and integrated circuits, so as to pursue high-quality economic development.

Fifth, we should continue to support the development of new industries and new business types and models including overseas warehouses, cross-border e-commerce and industrial networks. We must help connect each link of domestic and global supply chains. There are still more growth points in foreign trade. Broad growth potentials exist for services in the fields of software and information technology, travel, finance and insurance, education and elderly care. Take elderly care as an example. China's population ageing is deepening, putting a lot of pressure on elderly care. Therefore, advanced ideas and practices in some foreign countries can be drawn upon to cope with our domestic challenges. A lot of work can be done in foreign trade, which will not only boost foreign trade but also promote domestic economic development and social progress.