Xing Huina:

Thank you, Mr. Tian. Now the floor is open to questions. Please identify the media outlet you represent before asking your questions.

CCTV:

Due to multiple factors including the pandemic and the Ukraine crisis, industrial production was temporarily impacted in the first half of the year, but has generally shown a trend of stabilization and recovery. How do you see industry's role as ballast for the macroeconomy? What measures will MIIT take to boost the performance of industry in the second half of the year? Thank you.

Tian Yulong:

Thank you for your questions. I just briefly introduced the performance of industry as a whole. Generally speaking, China's industry still faced relatively severe and complex internal and external environments in the first half of this year, and all parties involved have made strong efforts to promote stable economic growth. In the first two months of the year, industry experienced a stable start with growth beyond expectations. Since March, industry has suffered a sudden shock, even seeing a large fluctuation. The CPC Central Committee with Comrade Xi Jinping at its core has steered the development course and acted decisively. The State Council issued a package of policies to stabilize the overall economy, which has provided strong support for stable industrial growth with macro policies. MIIT and relevant departments have given greater prominence to stabilizing industrial growth, stepping up the implementation of measures to ensure stable economic growth. All relevant government departments have coordinated to adopt all possible measures and ensure they produce effects early on. Local authorities have also taken on their responsibilities, actively issuing supportive measures and strengthening their implementation. Enterprises have overcome difficulties to operate at full capacity and ensure stable production. Thanks to all these concerted efforts, the total value-added of industrial enterprises above designated size grew by 0.7% and 3.9% in May and June, respectively. It's worth mentioning that the Purchasing Managers' Index (PMI) for China's manufacturing sector rebounded above the 50-point mark indicating economic expansion in June after contracting for three months in a row, which was by no means easy to achieve. The industrial economy has clearly stabilized and rallied, and given full play to its role as ballast for the macroeconomy. I'd like to elaborate from the following aspects:

First, in terms of the proportion of manufacturing in GDP, in the second quarter, the value-added of manufacturing enterprises above designated size accounted for 28.8% of GDP, up 1.4 percentage points over 2021. This is a very favorable signal. In terms of investment contribution, investment in the manufacturing sector increased by 7.4% in the second quarter, which was 3.2 percentage points higher than the growth rate of fixed asset investment, demonstrating the manufacturing sector's role as the engine driving growth. Industrial exports quickly turned from falling to rising, achieving double-digit growth. The equipment manufacturing sector also rebounded rapidly. In June in particular, it contributed more than 70% of overall industrial growth. The strong performance of the equipment manufacturing sector indicates that its role in the industrial system has gradually become apparent.

In general, in the first half of the year, the industrial economy overcame the shocks and pressure, withstood the challenges, and made hard-won achievements. This should be attributed to the strong leadership of the CPC, the institutional strengths of the socialist system, China's complete industrial system and its super-sized domestic market, and in particular, the series of policies issued by the CPC Central Committee and the State Council to stabilize economic growth. As a result, effective investment has continued to expand, consumption potential has been gradually released, and the internal forces powering economic growth have continued to increase. We believe that the industrial economy will continue to recover. The fundamentals of the industrial economy remain unchanged, and they will maintain long-term growth. Of course, we are also soberly aware that in the face of increased pressure both inside and outside of China, weakening global growth and high inflation will inevitably have an effect on trade demand, the stability of global supply chains, and commodity prices. Therefore, the situation we are facing remains complicated, especially in the second half of the year.

Looking forward, we will continue to follow the decisions and arrangements of the CPC Central Committee and the State Council, make economic stability our top priority and pursue progress while ensuring stability. We will put boosting the industrial economy in a more prominent position, and keep major indicators of the industrial economy within the appropriate ranges so as to create a favorable environment for the 20th CPC National Congress. We will adopt the following measures: First, we will accelerate the solid implementation of a package of policies to stabilize the industrial economy. A package of policies to stabilize the economy, especially those to boost the industrial economy, should be fully implemented. We will support local authorities to issue policies and measures which will produce effects earlier and have greater intensity. We will work with relevant departments to strengthen special supervision of efforts to stabilize industrial growth, monitor major indicators such as the investment and proportion of the value-added of the manufacturing sector in GDP, and establish a sound notification system. We will continue to enhance explanations of policies and ensure all kinds of enterprises can benefit from the policies, so as to strengthen their confidence in development, and boost market expectations.

Second, we will encourage more investment and consumption. The 14th Five-Year Plan is already in the works, and a batch of pillar projects and technological upgrade programs have already been launched. The new types of information infrastructure projects should begin as soon as possible, especially in 5G, gigabit optical networks and industrial internet. Meanwhile, we will enhance the driving force to encourage consumer spending. I mentioned earlier the campaign to promote the consumption of quality products nationwide and the programs that bring new energy vehicles and environment-friendly construction materials to rural areas. We will also nurture cities that play a demonstrative role in information consumption. In a word, a series of measures will be taken to promote consumption and investment.  

Third, we will keep industrial and supply chains stable and smooth. A crucial step is focusing on key regions, industries and enterprises, and helping enterprises stabilize production and reach the output goals. Regarding the prices of key products, we have established a "red-yellow-blue" three-tier warning system to ensure the supply of major commodities and upstream raw materials. We will also work to ensure the supply of fertilizers during summer, autumn, and winter. 

Fourth, we will increase our efforts to help SMEs tide over difficulties. Generally speaking, SMEs still face difficulties in their operation. We will prevent and resolve debt incurred by SMEs through special campaigns, particularly comprehensive inspections, to ease SMEs' burdens and promote their development. We will also improve our service system for SMEs, increase our supportive policies, and provide more precise services. SMEs now need more targeted policies to be implemented and effective. Therefore, we will work on that in the year's second half. Thank you.