CNR:

I have noted that the recovery of the industrial sector further quickened in the first three quarters. What do you think of its current performance? And what future steps will be taken to restore growth in this sector? Thank you.

Sheng Laiyun:

Thank you for your questions. The industrial sector is the cornerstone of our real economy. To assess whether the foundation for economic recovery is solid and whether the growth can be sustained, the industrial sector is a very important aspect for us to observe. Judging from the performance in the first three quarters of this year, the industrial sector has maintained an encouraging and stable momentum of recovery. In the first three quarters, the total value-added of industrial enterprises above the designated size increased by 4%, and in the third quarter, it rose by 4.2%. In August and September, the total value-added of the industry continued to grow month on month. In September, the total value-added of industrial enterprises above the designated size grew by 4.5% year on year. Thus, it can be seen that economic conditions are recovering for the better.

By the way, in addition to the rebound in industrial growth, there have been some positive changes in a series of related business indicators. For instance, general economic conditions have improved, and the manufacturing purchasing managers' index (PMI) has returned to above the tipping point for the first time, reaching 50.2% in September. This is a leading indicator that can demonstrate entrepreneurs' optimism about the market.

The second positive change was that China's producer price index (PPI) narrowed its decline for three consecutive months, indicating demand for industrial products by economic entities was picking up.

The third positive change was that the profits of industrial enterprises turned positive in August, which was of great significance. As market demand improved and prices recovered, revenues for August were positive, and profits for the month increased by 17.2%. Although cumulative profits were still negative, they turned positive that month, which was a positive sign.

The fourth positive change is that both the industrial capacity utilization rate and the production-to-sales ratio are improving. Let me expound on two more figures: In the first three quarters, the national industrial capacity utilization rate was 74.8%, 0.4 percentage point higher than that in the year's first half. The production-to-sales ratio of industrial enterprises above the designated size was 96.8%, registering a rise of 0.6 percentage point compared with that in the first half of the year. Moreover, the production-to-sales ratios of industrial enterprises for July, August, and September all exceeded 97%, which shows that the overall market environment and corporate operations are improving. Therefore, we remain optimistic about the continued recovery of the industrial sector. Thank you.