Speakers:

Xiao Yaqing, minister of industry and information technology

Tian Yulong, member of the Leading Party Members' Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer and spokesperson

Chairperson:

Shou Xiaoli, deputy head of the Press Bureau of the State Council Information Office (SCIO) and SCIO spokesperson

Date:

March 1, 2021

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Matters concerning industry and information technology are of crucial significance to the overall development of both the Communist Party of China (CPC) and the Chinese government. Today, we are delighted to be joined by Mr. Xiao Yaqing, minister of industry and information technology, who will introduce the development of this sector and answer your questions. Also present at today's press conference is Mr. Tian Yulong, a member of the Leading Party Members' Group of the Ministry of Industry and Information Technology (MIIT) and MIIT chief engineer and spokesperson. Now, let's give the floor to Mr. Xiao.

Xiao Yaqing:

Friends from the media, ladies and gentlemen, good morning. Welcome to today's press conference and thank you, Ms. Shou, for the introduction. I would like to take this opportunity to brief you on the situation of the industry and information technology sector in China. As you know, 2020 was an extraordinary year. Facing the challenging and complicated international situation, especially the once-in-a-century COVID-19 pandemic, the MIIT and other government bodies have been working under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, fully implementing the decisions and deployments made by the CPC Central Committee and the State Council. The MIIT has earnestly fulfilled our duties to ensure the supply of protective materials and spared no efforts in helping promote the resumption of work and production of the whole industrial chain. We have also been making new efforts concerning the application of information technology in infrastructure, the development of the internet, and the digital economy. These efforts have provided support in obtaining strategic anti-epidemic progress and helping China's economy realize positive growth. Concrete steps have been taken in building China's strength in cyberspace and manufacturing. As the last year of the 13th Five-Year Plan period, 2020 has marked a successful end to the plan.

Looking back over the past five years, China's industry and information technology sector has made remarkable progress. In general, its overall capacity has been further strengthened. New progress has been made regarding innovation in key fields, while growth drivers continue to strengthen and the development environment keeps improving. These have provided strong support for the stable and healthy development of the real economy and even national economy as a whole. Here, I would like to present three groups of figures:

First, the total value-added of industry in China has grown from 23.5 trillion yuan to 31.3 trillion yuan, making China the world's largest manufacturer for 11 consecutive years. China has contributed nearly 30% of global manufacturing output. 

Second, during the 13th Five-Year Plan period, the average growth rate of the value-added output from China's high-tech manufacturing sector reached 10.4%, 4.9 percentage points higher than that of the value-added output from industries above designated size. The proportion of value-added output from the high-tech manufacturing sector in that from industries above designated size has increased from 11.8% to 15.1% since the 13th Five-Year Plan began.

Third, the value-added output from the information transmission and software and information technology service industries has also seen remarkable progress, surging from 1.8 trillion yuan to 3.8 trillion yuan, with the proportion in gross domestic product growing from 2.5% to 3.7%.

Looking ahead, the Fifth Plenary Session of the 19th CPC Central Committee has laid out the blueprint for the 14th Five-Year Plan and beyond, underscoring the need for China's economic development to focus on the real economy, and resolutely building China's strength in manufacturing and cyberspace. These are leading the way for our future works and serve as the basic principle. The industry and information technology system will work based on both domestic and international dynamics, bearing in mind the top priorities of both the CPC and the Chinese government. We will develop a full understanding of the new development stage and resolutely implement the new development philosophy. Following the general principle of pursing progress while ensuring stability, we will take high-quality development as the main theme and take supply-side structural reform as the main task, in a bid to ultimately fulfill people's growing needs for a better life. We will ensure both development and security, and work to modernize the industrial and supply chain. By further consolidating the foundation, making use of advantages and reinforcing weak links, we will work to make new progress in strengthening manufacturing and cyberspace in China.

First, we will further implement the strategy of innovation-driven development, and redouble our strategic support to build China's strength in manufacturing and cyberspace. As you know, new-generation information technology, new material technology and new energy technology are developing at an accelerated pace. This has led to profound changes in the developing pattern of the global economy and the international division of labor. Therefore, we need to stick to the basic requirement of being self-reliant in science and technology, giving full play to China's mega-sized market advantages and new types of national framework. We need to promote innovation-driven development, systematically improve innovation capacity, and pay extra attention to the R&D of core technologies. We must improve the supply system of generic basic technologies. In particular, we need to improve the enterprise-centered innovation system and encourage more investment from enterprises, so as to develop more original and groundbreaking technologies. To encourage innovation in this regard not only means developing more products and techniques from specific technologies and products, but also improving the innovation capacity of our manufacturing sector.

Second, we need to work to improve the stability and competitiveness of industrial and supply chains, in a bid to create new advantages for future development. A self-reliant, complete and resilient industrial and supply chain is crucial to the stable growth of the economy. China has the most complete industrial categories and most varieties of supporting industries, which have deeply integrated into the international division of labor. This not only ensures the stable and healthy development of China's economy, but also greatly contributes to global economic growth. We need to highlight improvements to the stability and competitiveness of China's industrial and supply chain, carry out action plans to improve and strengthen these chains concerning our manufacturing sector, and implement projects to rebuild our industrial foundation. We need to accelerate efforts to reinforce weak links, develop our advantages, and foster emerging industrial chains. We will work to build our capacity in developing self-reliant and controllable industrial and supply chains, effectively safeguard China's economic security and develop new advantages for future development, in a bid to firmly seize the initiative in the fiercely competitive global market.

Third, we will vigorously promote the optimization and upgrade of the industrial structure and improve the overall quality of the industry. The optimization and upgrade of the industrial structure are key to improving our economic competitiveness. We will focus on "accelerating the development of the modern industrial system," make efforts to "consolidate, strengthen, upgrade, and ensure unimpeded flows," while deepening supply-side structural reform, pragmatically transforming development patterns, and enhancing the adaptability of the manufacturing supply system according to domestic demand. We will accelerate the implementation of key technological transformation and upgrading and provide quality improvement. We will build a green manufacturing system, promote orderly relocation of some industries in the domestic market, and strengthen graded cultivation for superior enterprises. We will speed up the transformation and upgrading of traditional industries, and foster the development of emerging and strategic industries such as integrated circuits, 5G, new energy, new materials, high-end equipment, new energy vehicles, and green environmental protection. We will also develop future industries to build industrial clusters with international competitiveness.

Fourth, we will accelerate the development of the digital economy and create new driving forces through a digital revolution. The economic digital transformation is an inevitable trend and we should grasp the direction in which digitalization, networking, and intelligentization are developing; give full play to China's existing foundation and advantages; and coordinate digital industrialization and industrial digitalization. We will fully implement a new generation of information and communication infrastructure via 5G, the industrial internet, and data centers, and promote digital transformation in manufacturing, intelligent manufacturing, and a digital revolution in SMEs. We will deeply integrate a new generation of information technology in manufacturing, as well as mix manufacturing with the service industry and speed up the development of the digital economy. The most fundamental pursuit is to promote the development of the real economy.

Fifth, we will further deepen reform, expand high-level opening-up, and enhance new development vitality. The development and achievements in the industrial and information industry rely on reform and opening-up. Implementing the 14th Five-Year Plan (2021-2025) and pursuing new development in the future, we also need to deepen reform and opening-up. In order to realize our goals of building China into a cyber power and a manufacturer of quality, we should devote more efforts to reform and opening-up, make better use of breakthroughs, and take a leading role in reform and maintain stability in manufacturing output. We will press ahead with reforms to streamline administration and delegate power, improve regulation, and upgrade services, and implement measures for reforming the market-based allocation of production factors. We will strengthen industrial policy guidance, make manufacturing more attractive to all types of resource factors, and deeply integrate reform and development. We will further promote efficient interconnection, expand opening up, fully open general manufacturing, and relax restrictions on market access. By doing these things, we can better utilize domestic and international resources and markets, form safer and more controllable industrial chains with more innovation and higher added value, and cultivate additional advantages for Chinese enterprises to participate in international cooperation and competition.

That's all for my introduction. Mr. Tian Yulong and I will now answer your questions. Thank you.

Shou Xiaoli:

Thank you, Mr. Xiao. Now the floor is open to questions. Please state the name of your news outlet before asking your question. Thank you.

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CCTV:

The 14th Five-Year Plan proposes fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other, which concerns all sectors of society. How do you see the status and role of China's industrial and information industry in fostering the new development paradigm? What are your plans and measures? Thank you.

Xiao Yaqing:

Thanks for your question. Fostering the new development paradigm is related to the overall systematic and profound reform, and is a strategic plan that focuses on both the present and the long term. Experience tells us that to foster the new development paradigm, the industrial and information industry is not only the main battlefield and main driving force but also a pioneer and forerunner necessary for development. We will unswervingly implement the decisions and deployments of the CPC Central Committee and the State Council, target the right position, point to strengths and breakthroughs, and make great efforts to step up innovation in line with the new development paradigm. In order to achieve fairer, safer, and more sustainable development with higher quality and higher efficiency during industrialization and informatization, we will focus on the following aspects.

First, we will focus on domestic scientific and technological development to improve innovation capabilities within the industrial chain. New fields such as integrated circuits, critical software, new materials, and major equipment, as well as key areas including industrial internet and the relevant manufacturing sectors, will be highlighted. We will accelerate the establishment of a manufacturing innovation center and internet systems with a national manufacturing innovation center as the core, strengthen the dominant position of enterprise innovation, promote the application of new technology industrialization and large-scale utilization, and form new advanced manufacturing capabilities.

Second, we will focus on maintaining a complete industrial chain system to win the battle of advancing industrial foundation and modernizing the industrial chain. Consolidating and supplementing the industrial chain and rebuilding our industrial foundation will be emphasized via improving core basic parts, key basic components, advanced basic manufacturing technology and equipment, key basic materials, and industrial software, which I mentioned previously. We will fully intensify scientific and technological innovation and continuously strengthen the resilience and elasticity of the industrial chain to avoid leaving any loopholes.

Third, we will make efforts to expand domestic demand, ensure smooth flow of economic activity, and speed up improvements in the quality of the manufacturing supply system. We rely on expanding domestic demand since the domestic market is so large and has huge potential. Work to improve quality will continue according to domestic demand. We will also make efforts to increase variety, create brands, strengthen and boost information consumption, and further expand manufacturing equipment renewal and technological upgrading. Our high-end, smart, and green development will meet market needs in a systematic way.   

Fourth, with focus on domestic and international circulations reinforcing each other, we will further improve opening-up of the country's industry and information technology. We are going to fully open up general manufacturing, orderly lift restrictions on foreign investment in telecommunication, and attract more high-end manufacturing projects with foreign investment. Recently, we witnessed how a few world-famous companies invested in China when the COVID-19 outbreak was severe last year. We will attract more institutions and talents, especially in the manufacturing industry, and encourage strong Chinese enterprises to improve their international operative level and deeply blend into the global industrial, value, supply, and innovation chains. Economic globalization and global division of the industrial chain will be an irreversible trend. Based on joint efforts to build the Belt and Road, we will promote international cooperation on industrial chains, and foster a new development paradigm with domestic and international circulations reinforcing each other. Thank you for your question.

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Thecover.cn:

The new energy vehicle (NEV) industry has seen major growth in China, but is also becoming increasingly competitive. How is China's NEV industry going in general? What measures will be taken to further support its development? Thanks.  

Xiao Yaqing:

Thank you for your questions. NEVs are the main driver for the green development, transformation, and upgrading of the global vehicle industry, and also a strategic choice for China's vehicle industrial development. In recent years, the MIIT and China's other relative departments jointly formulated approximately 60-plus supportive policies and measures. Relying on joint efforts made by local governments, departments, and enterprises, our country's NEV industry has made substantial breakthroughs in basic materials, parts, motor, electronic control, battery, and whole vehicle production. China's NEV production and sales volume has ranked first in the world for six consecutive years, and more than 5.5 million vehicles have been accumulatively promoted. 

Last year, the State Council unveiled a development plan for the NEV industry for the 2021-2035 period, making clear the direction of development and enhancing confidence in the industry, among enterprises, and with investors. Last year, the global NEV sales decreased, but our performance remained fairly good, with a high growth rate of 10.9%, and will continue its upward trend. However, we are also keenly aware that the industry is still at a crucial stage where we must work harder to overcome difficulties. The NEV market is very competitive itself and people are optimistic about the future of the industry. From technology, quality, and consumer perspectives, some problems still need to be dealt with.  

Next, efforts will mainly be made in the following aspects. First, improve quality. Based on early development, we will raise standards and strengthen quality supervision according to the needs of the market and consumer experience. Enterprises should continue boosting manufacturing levels to improve quality.  

Second, promote integration. People understand the concepts of "new energy" and "vehicle." However, NEVs incorporate many technologies. The development of NEVs also needs the integration of smart roads, communication networks, and cloud technologies to ensure a satisfactory experience. The further integration of electrification and intelligent networks will help develop new functions to better meet the needs of consumers. 

Third, optimize the environment. The development of NEVs is inseparable from the layout of charging stations. We need to improve environmental protection measures concerning charging and parking. Meanwhile, we will strengthen the electrification of public transport.  

Finally, expand opening up. We have fully lifted restrictions on foreign investment in the NEV industry. On that basis, we will be open for technological innovation, international trade, and even the formulation of standards and regulations, which will inject new momentum into the development of the NEV industry. Thanks. 

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CNBC:

My question is, what specific goals or production plans does China have for the chip industry during the 14th Five-Year Plan period and amid global changes? Thank you.

Xiao Yaqing:

Thanks for your question. Let's invite Mr. Tian to answer it.

Tian Yulong:

Thanks for your question. Chips and integrated circuits are the cornerstone of the information society and an important foundation of information technology. The high-quality development of the chip industry is related to the development of the modern information industry and industrial chains. China saw a very impressive and constantly growing integrated circuit industry during the 13th Five-Year Plan period. According to the estimates of China's semiconductor industry, China's revenue of integrated circuit sales reached 884.8 billion yuan in 2020, an average growth rate of 20% and three times the growth rate of the global integrated circuit industry during the same period. We have also made breakthroughs in technological innovation, with significant improvement in manufacturing techniques, packaging technologies, and key equipment materials. Companies also grew steadily, a number of whom emerged as global leaders in design, manufacturing, packaging and testing, and other links on the industrial chain.

On the whole, the Chinese government highly values the chip and integrated circuit industries, and has issued policies for the high-quality development of the integrated circuit and software industries, while comprehensively optimizing policies for the high-quality development of the chip and integrated circuit industries. There are several main measures.

First, we have introduced further tax cuts for companies. The policies of reducing or exempting corporate income tax for profit-making integrated circuit enterprises have boosted their development. Second, we have further strengthened the foundation. The development of chips involves many basic aspects, including materials, techniques, and equipment, and relies on a considerably large industrial chain. Only by laying a solid foundation, can there be constant innovation and growth for the industry. In addition, the integrated circuit industry needs a very good ecological environment to build a platform that can form a complementary and mutually supportive process in the industry chain. Therefore, it is critical to have a platform and a good ecosystem. The development of the chip industry is completely guided by the application of its products. Therefore, the rapid development of the automobile sector, industry, medical care, and education, especially the online economy and digital economy since the COVID-19 outbreak, has provided a very broad market for the chip industry. The development of the industry also relies on talent, so the government and the country have adopted a series of measures to boost our talent reserves and training. Finally, the chip industry is globalized, and we should increase collaboration.

In general, the chip industry faces both opportunities and challenges. It is necessary to strengthen collaboration on a global scale to jointly build a global industrial chain and make it healthier and more sustainable. It will not only support the development of China's information society, but also support global applications of information technology. The Chinese government will create a market-oriented, law-based and international business environment and ecosystem for the industry with efforts at the national level. That's all I have to say for it. Thank you.

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CNR:

We noticed the huge impact of the pandemic on the Chinese and global economy since last year, but China's industrial chains and supply chains have withstood the test and made important contributions to epidemic prevention and control and steady economic growth. What plans and measures do you have to stabilize and strengthen industrial chains and supply chains during the 14th Five-Year Plan period? Thank you.

Xiao Yaqing:

Thanks for your question. I agree with you in that the impact of the pandemic has been a real stress test on our industrial chains and supply chains. We can say that we have withstood the test over the past year, and showcased our advantages in having a comprehensive industrial system, strong capabilities in mobilizing resources and the ability to transform our industries. An obvious example is our early supply of anti-epidemic materials, such as protective clothing, masks, disinfectants, ventilators, and various drugs and auxiliary medical equipment, and our rapid resumption of work and production subsequently.

However, we must be soberly aware of our shortcomings and weaknesses in the industrial chains and supply chains shown in that process. Therefore, we already started analyzing our 41 major industries and their industrial segments, and drawing the map of key industrial chains to find out our gaps, weaknesses and shortcomings. Of course, we have many advantages. After analyzing our industry chains and supply chains, we will be able to accurately design them, implement targeted policies, and lay a solid foundation. This way, we can strengthen industrial clusters that we excel in, and make up for any prominent shortcomings and other weaknesses. In short, we will bolster our strengths and make up for shortcomings. This will ultimately make our industrial chain more resilient. 

To bolster our strengths means to develop our strong points, and strive for more say in development. For example, we will cultivate new industrial chains, as I have just mentioned, in fields such as 5G, new energy vehicles, high-end medical equipment, biomedicine and new materials, and maintain the integrity of industrial chains while improving the traditional ones. We have a number of traditional industrial chains in a wide range of sectors, with many of them producing the largest volume of products in the entire world. They not only meet the needs of China, but also contribute to global economic growth. Therefore, it is very important to maintain the integrity of our industrial chains. We will also optimize the regional layout of our industrial chains. Different regions in China have quite different economic characteristics. Therefore, we will further tap into the advantages of industrial clusters in accordance with regional characteristics and layouts to make the industrial chains more embedded and competitive.

To make up for shortcomings means to make improvements so that we do not drop the ball at critical moments. It mainly involves two aspects of work. One is to reengineer industrial foundation. It targets fields with obvious weaknesses and shortcomings. We will seek breakthroughs via new mechanisms, such as driving the overall industrial development with an application-oriented approach, and selecting the best candidates to lead key research projects. The other is to speed up the construction of national manufacturing innovation centers. We have set up 17 during the 13th Five-Year Plan period, achieving positive results. Next, we will further accelerate construction of national manufacturing innovation centers to boost industrial innovation. We will motivate local companies and improve our manufacturing innovation system and capabilities based on a market-oriented and international standard. Thank you.

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Reuters:

How well does the Ministry of Industry and Information Technology believe Chinese technology companies are doing in protecting data privacy? What measures will the ministry take to strengthen data privacy and protection? For example, how will China ensure that apps no longer share personal information with a third party? Thank you.

Xiao Yaqing:

Thank you for your question. First of all, the Chinese government has always attached great importance to the protection of personal information. I think that as far as 2020 is concerned, it may be the best year in history for protection because we are in a process of continuous improvement. Secondly, we should see that information technology is developing very rapidly, and due to reform and opening up, the implementation of accommodative and prudential regulation, and our encouragement of innovation, we have been able to provide a wide variety of personal information service applications, and the public have gained a lot of convenience in all aspects of their lives. But at the same time, we have also seen that there are still many technologies for personal information application that need to be rapidly improved and strengthened. Take mobile phones that everyone uses as an example. The number of mobile apps is very large. According to incomplete statistics, some say the number exceeds 3.5 million, and even conservative estimates put it to be more than 2.5 million. So, it's unimaginable that there are now more than 2 million apps available for a person's mobile phone, like the one held by that reporter. So as for how to supervise, we have intensified management and remediation efforts in accordance with development and safety requirements over the years. You have also noticed that the Ministry of Industry and Information Technology launched a special campaign on apps last year, and we have worked with other departments to carry out special campaigns on a variety of problems that the general public have lodged strong complaints about, such as problems concerning the microphone on the mobile phone and the communication address book in the mobile phone. Generally speaking, the effect of the campaigns is obvious. As requirements further enhance this year, we will continue such efforts, and work to ensure that the use of personal information must follow the principle of minimum requirement in the key areas that people have reported. 

In the process of personal information protection, apps that refuse to accept rectification must be resolutely removed from the app stores. At the same time, as the supervisor, we must also improve our technological capabilities. First, we must be able to detect loopholes in information protection, so that the general public can use the apps with ease. For another example, it is very difficult to find the cross ("x") in advertisements that people don't like to see in many apps. Therefore, we will make sure that information harassment is blocked. If you are not willing to watch an advertisement, then it should be very obvious how to turn it off. We still receive many public complaints about such problems like other advertisements appearing before the Reuters page you want to see. I believe that the Chinese government's attitude toward protecting personal information is resolute, the law is constantly improving, and the level of technology is constantly improving. We must stick to our actions, and we will make sure everyone feels a sense of gain.

Here I would also like to announce a phone number that deals with complaints about unhealthy and spam information on the internet - 12321. If there is any problem, you can report it by calling 12321. This is also helpful for our work. Thank you.

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Asahi Shimbun:

The Ministry of Industry and Information Technology issued a draft version of the regulations on rare earth management to gather public opinions in January. Why did you choose this time? Is it to counter the United States? In addition, more and more people in Japan are worried that China may reduce exports? What is your response to this? Thank you.

Xiao Yaqing:

Thank you for your question. In January this year, the Ministry of Industry and Information Technology issued the draft version of the regulations on rare earth management to gather public opinions. Everyone knows that rare earth is a strategic resource. The purpose of the regulations is to regulate the industry in accordance with the long-term development strategy of rare earth and the demands of the market and address problems in our actual development. The regulations aim to allow the market to play a decisive role in the allocation of resources. Of course, the government must also play a good role in maintaining market order, relaxing or tightening regulation as is necessary. China is a large rare earth country with the most resources and the most export. Some countries say that we restrict exports, but most of the things you buy come from China. First of all, there is a phenomenon worthy of our attention. Our rare earth does not sell at a "rare" price, but at an "earth" price. This is because of vicious competition and competitive price reduction. Precious resources are wasted. Second, if you have the opportunity to take a look at our rare earth production enterprises, you will find there are indeed many environmental protection issues, and local people have very strong complaints. The rare earth market is good, so enterprises mine hard, dig hard, and refine hard. Therefore, there are many complaints about environmental protection. Third, why is rare earth called rare earth? Because it is a rare resource. Now they are being exploited in disorder and resources are being wasted. Some only harvest the richest areas. In Chinese language, it is called "digging out cabbage heart." With the best part taken away, the efficiency of the comprehensive utilization of resources is very poor. From a long-term perspective, after a few years of use, the comprehensive utilization of resources will also be problematic. Fourth, the development of rare earth has a lot of low-level repetitions, while high-level rare earth products are indeed relatively few, which is not conducive to technological innovation and sci-tech progress. Therefore, we should learn from Japanese companies in this regard. Many Japanese companies have done a lot of work on high-end rare earth products.

The Ministry of Industry and Information Technology, as regulator of the industry, needs to perform its duties well and do its own things well. I just talked about the international division of labor in the industrial chain. The globalization of the economy is a general trend. In this process, we are all closely interconnected. We need to join hands to respond to the various needs of resources, energy and products in the process of economic development and market development. We need to address our current problems towards healthy and sustainable development. Thank you.

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Ta Kung Pao:

According to published data, China's industrial added value reached 31.31 trillion yuan in 2020. What is the MIIT's analysis and predictions for this year's industrial economy considering the huge uncertainties regarding the COVID-19 pandemic and the external environment? Also, what measures will you take to ensure steady development of industry and information technology?

Xiao Yaqing: 

Thank you for your questions. I'd like to invite Mr. Tian Yulong to answer you.

Tian Yulong:

Thank you for your questions. Since the unprecedented COVID-19 pandemic in 2020, General Secretary Xi Jinping has personally taken charge and planned the response. Under the strong leadership of the CPC Central Committee, we have made major strategic achievements in our response to COVID-19 and socio-economic development, which has become the focus of global attention. The economy has recovered steadily in China and the country has become the only major economy in the world to maintain positive growth. This is obvious to all. Generally speaking, China's economy will maintain its steady and long-term growth, as will its industrial economy going into 2021 under the strong support of the optimized manufacturing system, strong supporting services capacity and huge market potential. However, we still face challenges posed by uncertainties such as the pandemic and the economic situation, as well as other possible risks caused by breaks in the global industrial and supply chains.

In addition, while continuing to implement routine COVID-19 controls, some industries and enterprises are still recovering, and face pressure from operating difficulties. However, I believe they are gradually recovering. In general, China has demonstrated certain advantages in restoring its economy after experiencing severe challenges in the fight against COVID-19: First, we are under the centralized and unified leadership of the Party, and enjoy great strengths from the system of socialism with Chinese characteristics. In addition, we have learned valuable experiences from implementing routine COVID-19 controls. Significantly, the proposals for formulating the 14th Five-Year Plan (2021-2025) and the Long-Range Objectives Through the Year 2035 adopted at the Fifth Plenary Session of the 19th CPC Central Committee have not only drawn up blueprints for work in 2021, but also outlined plans for the following five or more years, which has provided strategic guidance for development of the industrial economy. In particular, Central Economic Work Conference held in December laid out a specific overall plan on the economy, while the approaching "Two Sessions" meetings will establish the main targets and tasks for socio-economic development in 2021. As the main department in charge of the development of industry and information technology, the MIIT will shoulder its responsibilities, remain confident, work with utmost concentration and overcome difficulties to implement all kinds of work in a down-to-earth manner. The main measures include:

First, strengthening innovations and breakthroughs in fundamental and key areas. Just now, Mr. Xiao mentioned that we would take modernizing the industrial chains and re-establishing the foundations of industries as our main work.

Second, stabilizing and optimizing the industrial and supply chain layout. As an important foundation of China's overall industrial economy and one our advantages, the industrial chain will be further upgraded through strengthening or supplementing.

Third, accelerating the shift to digitalization of manufacturing to promote integrated development. We will pursue innovative growth of industrial internet, map strategic routes of digitalized transformation, promote industrial digitalization and accelerate digital industrial growth.

Fourth, promoting high-quality development of the information communication industry. We have seen that the 5G network has so far achieved admirable progress. In the future it will be further upgraded in an orderly manner, and the deployment of the 6G network will be accelerated so as to foster optimized networks and maintain cyberspace security.

Fifth, expanding our support for small- and medium-sized enterprises (SMEs). We will focus on mitigating the financial difficulties of SMEs and protecting their lawful rights and interests so as to support enterprises of all sizes in pursuing development through collaboration with each other.

Sixth, taking solid measures on reform and opening-up. We will strengthen reforms to streamline administration and delegate power, and optimize the policy environment for the manufacturing industry, while supporting international cooperation between industries.

Seventh, ensuring that routine COVID-19 controls are implemented. The MIIT took up the responsibility of ensuring the availability of anti-epidemic materials. Our focus will transfer from safeguarding the sufficient supply of basic anti-epidemic materials last year, to the production and supply of coronavirus vaccines this year.

Finally, prioritizing the formulation of the 14th Five-Year Plan (2021-2025) with relation to the fields of industry and information technology. We will redouble our efforts to make specific plans in key areas and for key industries to usher in high-quality growth. That is all from me. Thank you.

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New York Times: 

Looking over the next five years, as you look for technological self-sufficiency, how will you measure that? What will be your benchmarks? Will it be, for example, market share? Will it be trade balance in these sectors? How will you choose the measures? Thank you. 

Xiao Yaqing:

Thank you for your question. Your question is a rather general one, so I will try to answer that from the perspective of industry and information technology. When it comes to self-reliance in science and technology, first of all, we make our goals according to the needs of China's industry and information technology development. For instance, China boasts the largest industry and information technology market, and has been the largest goods trading country for many years, with imported products constantly increasing. I came across a figure a few days ago. China imported the first ten Boeing 707 aircraft after President Nixon visited China in 1972; we imported the one hundredth airplane in about 1986; and the one thousandth Boeing airplane in 2013. Therefore, our need is large. Technological self-reliance means we should have the technology and ability to produce a lot of things by ourselves. 

Second, people's increasing need for industry and information technological products has pushed forward our development. For example, 5G technology, high-speed railway, household chemical products, and normal home appliances are all developed in accordance with the needs of our people, which can also lead to technological self-reliance. 

Third, in a country of over 1.4 billion people, it is impossible to buy the better life aspired for by our people since nobody could supply it. We need to produce to meet our people's needs. The process of technological self-reliance is a process of satisfying our people and in my own view, contributing to the world. If everyone buys a certain product in the world, I believe that no one could supply it. Therefore, our self-reliance in science and technology contributes to the world. 

Fourth, there are no boundaries in science and technology, which is the common wisdom of the globe and humanity. Therefore, China's technological self-reliance is bound to make contributions to the global development of industry and information technology. Take fast developing 5G technology for example: we have built over 718,000 base stations by the end of 2020 and a complete systematical network will be built during the next five years. We are also planning to develop 6G technology, and discover the future of communication technology, and what kind of services it can offer. This process must require the gathering of knowledge, talent and innovation, and we are open and cooperative to improve people's living standard with the rest of the world. The purpose of self-reliance is not for our own good, but also as a way to help create a community with a shared future for mankind. The process can provide knowledge and positive energy for the globe and the result can serve all of humanity. 

This puts forward new and higher requirements for industry and information technology to implement self-reliance, and we have to do this work well one by one. We will also strengthen openness and cooperation with countries and regions including the United States, Europe and other developing countries. Thank you.

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CRNTT:

As a strategic emerging industry, the development of 5G has always been of great concern. Please tell us about the current construction and development of 5G in China, and what other key initiatives will be taken by the Ministry of Industry and Information Technology to promote the development of 5G during the 14th Five-Year Plan period? Thank you. 

Xiao Yaqing:

Thank you for your question. China began its 5G network construction relatively early and has been leading the world in the number of total base stations, the quality of its network and the construction level of its communication equipment. We have world-leading enterprises. For example, Huawei, ZTE and other businesses have cooperated with globally renowned firms such as NOKIA and Ericsson. 

From a domestic perspective, we have just introduced that we have built over 718,000 5G base stations and invested over hundreds of billions of yuan in 5G, which now basically covers all cities above prefecture level across the country. We have arranged base stations in a standalone model, and provided services with large broadband and low latency with full use of network slicing technology. The scale of users has surged and the statistics change every day. Our 5G terminal connections exceed 200 million, probably the largest in the world. Satisfaction with 5G services is also higher than that of 4G compared with the same period of development. The average household usage of 5G mobile traffic is 50% higher than that of 4G. And the price per gigabyte is 4.4 yuan, down 46% in the past two years, and will decrease further in the future. Last year, the number of mobile phone terminals shipped reached 163 million units, with a large volume of 218 new models launched in the market. Innovative applications are increasingly abundant. In the consumer sector, 5G+Ultra HD and 5G+AR/VR technologies are widely used, and areas like gaming and entertainment, live events and residential services are being explored and practiced. Education and medical cares can provide services using 5G plus artificial intelligence and plus big data technology. During last year's epidemic prevention and control, our family education and smart medical care developed greatly. In the past two years, due to the rapid development of the "5G+industrial internet", there are now over 1100 projects under construction across the country, which have many very promising applications. I suggest you to have a look at COMAC in Shanghai, whose 5G application is very powerful. In the coal mines of Yangquan, north China's Shanxi province, the efficiency of underground production management and level of security have been constantly improved. Other good applications can also be found in Hunan Sany Heavy Industry Co., Ltd. and Xiamen port. 5G has greatly promoted the development of those sectors. 

Next, we will firstly cement the industrial foundation. Our country has a solid foundation to further achieve the development of 5G technology, with a batch of advanced big companies like Huawei. Secondly, we will deepen integrated application to promote technological innovation in various industries. Enterprises such as China Mobile, China Unicom, and China Telecom have done well in this regard. Thirdly, we will further open to the outside world and expand international cooperation. We should strengthen international communication and cooperation throughout the 5G development process, from R&D and application of technologies to the construction of facilities. During this upgraded process, we will build an industrial ecology for global coordination and a safer and more open environment for development with more mutual trust so that the benefits of innovative development can reach people all over the world. Of course, the development of the 6G industry, as I just said, is now in its exploratory stage. We are working with the international community in this regard to promote the development of common standards, long-term demands, and mature technologies. Next, we need to communicate and discuss with friends in this industry from all over the world to promote further development. Thank you.

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Red Star News:

Recently, the MIIT has released a notice to support the establishment of national leading zones for new artificial intelligence (AI) applications in Beijing, Tianjin, Hangzhou, Guangzhou, and Chengdu. What support will these leading zones get? What role will they play in the innovative development of China's AI industry? What plans do you have next for the construction and development of the leading zones? Thank you.

Tian Yulong:

Thank you for your questions. As you just mentioned, AI technology serves as a major driver for a new round of technological revolution and industrial transformation. The establishment of leading zones is just one of the important measures we have taken to implement the decisions and plans of the CPC Central Committee and the State Council to accelerate the integration of AI and the real economy. 

In 2019, the MIIT approved the establishment of three leading zones in Shanghai, Shenzhen, and the Jinan-Qingdao area. These zones were built to conduct pilot trials in areas such as system and mechanism innovation as well as a superior policy environment and improved data sharing to explore new paths and gain experience. Recently, the MIIT approved leading zones in another five cities, namely Beijing, Tianjin, Hangzhou, Guangzhou, and Chengdu. Together, the eight zones covering the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Pearl River Delta, and the Chengdu-Chongqing region, play a role in the exploration, innovation, and demonstration of China's developing AI industry. We will step up our efforts in the following ways. 

First, we will explore new mechanisms and energize the market. We will energize market entities by enhancing policy guidance, improving the market environment, and strengthening the talent pool, so as to gain experience and explore successful development models.

Second, we will bolster the leading role of technological application and accelerate the introduction and application of AI technology. AI's strengths lie in big data, the huge available market, and enormous application. How should we leverage these advantages? With the government, enterprises, and the AI industry working together, we will jointly promote the practical application of AI technology, introducing it first to areas such as intelligent transportation, intelligent healthcare, and intelligent education to create new engines of growth and foster new growth drivers. 

Third, we will stay committed to following development with distinctive features and the creation of an intelligent economy in accordance with local conditions. The intelligent economy is now growing rapidly, and instead of applying the same measures to different conditions, we should carry out integrated development with distinctive features in accordance with different industries, local conditions, and areas. In this regard, different leading zones have offered their own development models. For example, Shanghai's development zone has been turned into a pacesetter for the national AI industry, while the zone in Shandong features AI and smart manufacturing, and the zone in Shenzhen boasts a hash rate platform. All of these zones have played an important role in the demonstration and promotion of the AI industry.

In general, leading zones are where local governments set up platforms and enterprises pursue integrated development. We will focus on reform, innovation, and pertinent policy support as the top priorities for the government's work. Also, we will promote technological applications and industrial integration, and ensure the government and the market fulfill their roles. As long as we step up our efforts in the above aspects, we will fully promote the development of the AI industry. Meanwhile, we will strengthen international cooperation to enforce a healthy, sustainable, and safe development of the AI industry around the world. Thank you. 

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Economic Daily:

What has the Ministry of Industry and Information Technology (MIIT) done to help small and medium-sized enterprises (SMEs) tide over during the COVID-19 epidemic? Also, proposals for formulating the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 pointed out that innovative SMEs should be supported to help them grow into important innovation sources. What measures will the MIIT take this year to strengthen the government's services for SMEs to cultivate their innovation capacities? Thank you.

Xiao Yaqing:

Thank you for your questions. Small and medium-sized enterprises are the most active and most numerous market entities in China. It has been reported that there are now 130 million market entities in the country, including more than 80 million self-employed individuals and over 40 million enterprises, among which, more than 95% are SMEs. Therefore, SMEs are the largest driving force in ensuring market stability and employment. The CPC Central Committee and the State Council have always attached great importance to the development of SMEs and have adopted numerous supportive policies. For example, in the fight against the COVID-19 epidemic last year, various parties introduced many supportive measures for SMEs facing difficulties, which helped boost their development. Last year, the MIIT, together with other departments, implemented the decisions and arrangements of the CPC Central Committee and the State Council, which can be simply summarized as "subtraction in three aspects" and " addition in three aspects."

The three aspects of subtraction relate to tax, arrears, and financial cost. Last year, we made further tax and fee cuts of more than 2.5 trillion yuan, which greatly supported the development of SMEs. We also cleared overdue payments for private enterprises and SMEs, and over 161 billion yuan in non-negotiable payments. Financial institutions and enterprises have been very supportive of SME's advancement. Last year, the average interest rate of loans introduced to SMEs, especially small and micro enterprises, stood at 5.08%, down 0.8 percentage points from the beginning of last year.

The three aspects of addition relate to services, digitization, and financial scale. Last year, more than 90,000 events were held to serve SMEs across China, providing services for over 6.7 million applicants and reaching enterprises 50 million-plus times. Meanwhile, we carried out dedicated campaigns to facilitate the digitization of SMEs and organized activities to promote business startups and innovation in manufacturing, which has driven the cultivation of more than 30,000 SMEs characterized by professionalization, refinement, specificity, and novelty in various places as of last year. Among them, a total of 1,832 "little giant enterprises" (outstanding examples among SMEs that feature professionalization, refinement, specificity, and novelty) had been developed. The loans for small and micro enterprises supported by financial institutions exceeded 15 trillion yuan, up 30.3% year on year, which is a huge increase. With so many active SMEs, they cover a wide range of fields. In addition to national policy support, local governments where SMEs are active should also provide more precise supportive policies for the development of these enterprises.

For MIIT, we want to focus on the work of "three, two, one" for the SMEs' development. The so-called "three" relate to the further consolidation of foundations in three important areas: policy system, service system, and development environment. We will accelerate the formulation of the SME development plan during the 14th Five-Year Plan period, further improve the system supporting the development of SMEs, and upgrade the SME service system to combine public services, market-oriented services, and public benefit services. These service institutions should also be guided to provide standardized, refined, and personalized services.

"Two" indicate that we will concentrate on the two key points of financing, and rights and interests protection, and seek solid outcomes. We will strengthen the synergy between the government, financial institutions, and enterprises, deepen cooperation in production and financing, incentivize financial institutions to increase credit supplied to SMEs, and further reduce financial costs. We witnessed how banks and other financial institutions made numerous efforts last year to further widen direct financing channels.

"One" relates to focusing on the improvement of SMEs' innovation capacities and assisting SMEs to grow into sources of innovation. A large proportion of innovation in the past came from SMEs, so we should in a phased way improve systems which cultivate innovative SMEs. We will strive to foster more than 10,000 "little giant enterprises" characterized by professionalization, refinement, specificity, and novelty at the national level within three to five years, adding to the existing 1,800-plus already in operation, as well as 100,000 provincial-level small and medium-sized enterprises of this kind and one million innovative small and medium-sized enterprises. Thank you.

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Yicai:

Mr. Xiao just responded to issues about various industries such as chips and new energy vehicles. We are also very concerned about the development of the steel industry. According to the 2021 National Conference on Industry and Information Technology, China will resolutely cut the output of crude steel this year. Is there a specific target? Industry watchers expect that the demand for crude steel will exceed 1.1 billion metric tons this year. On the one hand, we need to reduce the output of crude steel, but on the other hand, demand is increasing. Is there any contradiction? How can we deal with that? Thank you.

Xiao Yaqing:

Thank you for your questions, which are indeed issues that many are concerned about. First, since 2016, major headway has been made in the five priority tasks of cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening points of weakness. In particular, China has reduced steel production capacity by 170 million metric tons, making significant progress in reducing steel production and capacity. This year, we will continue to work on it. General Secretary Xi Jinping announced at the 75th UN General Assembly that China aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060. We will strive to achieve these high targets, during which the steel industry should take the lead.

There are several reasons why steel is in great demand. First, the rapid economic recovery, the resumption of production and new construction in various industries, are all generating a very large demand for bulk raw and auxiliary materials, including steel. It is also important to see that after the global recession last year, the economy is likely to have some good news this year, so expectations are rising and demand is further increasing.

Second, the per capita use of iron and steel is still in the development process, compared with total economic output. For example, cement, stone, and bricks and tiles are the main materials for construction. Steel consumption is not particularly high, especially in the vast rural areas. In addition, regarding transport, judging from the current number of cars per hundred people and the fact that China's per capita GDP exceeded 10,000 U.S. dollars benchmark, there's plenty of scope for growth. In this sense, the demand for steel is very strong.

Third, from the perspective of energy conservation and emission reduction, the output of iron and steel should be greatly reduced. In terms of the amount, the MIIT is cooperating with relevant national departments to formulate plans. At the same time, we will raise standards and improve the performance of the product, so that the unit steel consumption is further reduced with the total amount remaining unchanged. For example, we will further enrich our varieties of steel and improve their strength, toughness, and quality. In the process of cutting the output, we should pursue intensive development. If we don't exert control over the next few years, the total output of steel may be higher than it is now. Currently, resources are still distributed and the degree of dependence on foreign sources of raw materials and energy is still very high. All these problems need to be solved.

Finally, energy conservation and emission reduction are other key tasks. At present, the unit emission of carbon dioxide per metric ton of steel is declining, but the total amount is still relatively large. The total coal consumption per metric ton of steel has declined. The global average is 575kg of coal per metric ton of steel, but China's figure is 545kg. There is still potential to be tapped in this area given our large total amount. We must take energy conservation and emission reduction as important tasks of the steel industry and continue our efforts.

Thank you.

Shou Xiaoli:

Thank you, Mr. Xiao, Mr. Tian and friends from the media. Today's press conference is hereby concluded. Goodbye, everyone.

Translated and edited by Zhang Jiaqi, Fan Junmei, Zhang Tingting, Huang Shan, Xu Xiaoxuan, Wang Yanfang, Wang Yiming, Li Huiru, Guo Xiaohong, Li Xiao, Wang Qian, Zhu Bochen, Lin Liyao, Wang Wei, Yuan Fang, Zhang Rui, Liu Jianing, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.