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Read in Chinese
Speakers:
Tian Yulong, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT)
Luo Junjie, director general of the Bureau of Operation Monitoring and Coordination of the MIIT
Zhao Zhiguo, director general of the Bureau of Information and Communications Administration of the MIIT
Chairperson:
Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
Jan. 20, 2022
Chen Wenjun:
Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Mr. Tian Yulong, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT). Mr. Tian will brief you on the development of the industry and information technology sector in 2021 and take your questions. We are also joined by Mr. Luo Junjie, director general of the Bureau of Operation Monitoring and Coordination of the MIIT, and Mr. Zhao Zhiguo, director general of the Bureau of Information and Communications Administration of the MIIT.
Now, let's give the floor to Mr. Tian.
Tian Yulong:
Ladies and gentlemen, friends from the media, good morning. I'd like to begin by expressing my heartfelt gratitude to you for your attention and support for developing the industry and information technology sector. Next, I'll brief you on the general situation of 2021.
Since the 18th National Congress of the Communist Party of China (CPC), the CPC Central Committee with Comrade Xi Jinping at its core has made significant decisions to develop China into a manufacturer of quality and build the country's strength in cyberspace. Under the guidance of these decisions, China's industry and information technology sector has seen historic achievements and transformation, providing strong support for building a moderately prosperous society in all respects. In 2021 especially, against the backdrop of complex and challenging environments and multiple risks and challenges, all government bodies and departments involved in the industry and information technology followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. We earnestly carried out decisions made by the CPC Central Committee and the State Council and worked hard to coordinate epidemic prevention and control with economic and social development. We forged ahead and overcame difficulties, redoubled our efforts to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment, and market expectations), implemented the tasks of guaranteeing stability in six areas (employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations), and thoroughly carried out the strategies of developing China into a manufacturer of quality and building the country's strength in cyberspace. As a result, China's industrial economy sustained recovery and development. Its information technology sector made positive progress, putting the implementation of the 14th Five-Year Plan off to a good start. The overall growth of industry and information technology in 2021 has the following four features:
First, the industrial economy saw sustained recovery and development. In 2021, following the requirements being made by the Central Economic Work Conference, notably safeguarding macroeconomic stability and ensuring that the economy operates within an appropriate range, we have given greater priority to promoting the stable growth of the industrial sector and taken a series of measures. Through strengthening the guiding role of planning and policies, we introduced and implemented various plans from the 14th Five-Year Plan concerning key sectors and fields of industry and information technology. We formulated a series of policies and measures that ensure the industry's stable growth. We proactively addressed the adverse impact of sporadic pandemic outbreaks, the price hikes in bulk raw materials, and the constraints on energy. We adopted coordinated policies, managed to guarantee the interests of market players, stabilize investment and foster consumption, and effectively ensured the generally balanced and stable development of industrial production. In 2021, China's added value of industries above designated size grew by 9.6% year on year, or an average two-year growth rate of 6.1%. Among them, the growth rate in the third quarter of 2021 declined. However, as our policies on revitalizing the industrial economy took effect, the declining trend was reversed, and the growth rate of the industrial economy rebounded gradually. Under the strong leadership of the CPC Central Committee and the State Council, we managed to overcome various obstacles. As a result, the development of the industrial economy in 2021 generally went well with satisfying results, and this did not come easily.
Second, industrial transformation and upgrading accelerated notably. In 2021, we focused on stabilizing the industrial and supply chain, sped up the digital and green transformation of industries, spared no effort to enhance the core competitiveness of the manufacturing industry, and strived to facilitate the transformation and upgrade of traditional industries as well as the development of emerging industries. As a result, we have accomplished achievements in three aspects. First, the digital transformation of the manufacturing sector was accelerated, and the innovative development of the industrial internet saw remarkable progress. Security systems for internet platforms were established, and the "5G+industrial internet" was applied in 20 scenarios and 10 key industries. The capacity of innovative applications ranked in the top tier globally. Second, the green and low-carbon development of industries saw positive progress. We formulated and published implementation plans concerning carbon neutrality in industrial fields and key sectors and steadily advanced the green transformation of traditional industries. The output of crude steel in 2021 decreased by 32 million metric tons compared with the previous year, down 3%. In the first 11 months of 2021, the energy consumption per unit of the added value of industries above the designated size reduced 5.5% year-on-year, which was remarkable progress. Third, emerging industries maintained a relatively fast growth, and high-tech manufacturing and equipment manufacturing grew a more vital driving force and saw rapid development. Industrial software, big data, cloud computing, artificial intelligence, and other new technologies, industries, and business forms projected a strong growth rate. The new energy vehicles (NEVs) sector, which attracted widespread attention, saw rapid development, and more than 3.5 million NEVs were produced and sold respectively in 2021, up 160% year on year. Therefore, the industrial transformation was brought onto a fast track in 2021.
Third, measures providing vital relief to small- and medium-sized enterprises (SMEs) were implemented and enhanced effectiveness. The CPC Central Committee and the State Council have attached great importance to the development of SMEs and regarded facilitating the development of SMEs as a long-term strategy for stabilizing growth and employment. Under the leadership of the State Council's working mechanism on promoting the development of SMEs, the MIIT has been working with relevant departments of the State Council and local governments to strengthen coordination, supervision, and guidance. We have been working to constantly optimize the business environment of SMEs, further protect and stimulate the vitality of market entities, provide more favorable policies and continuous services. We have also introduced policy packages that provide vital relief and benefit to SMEs and established long-term mechanisms that prevent and resolve the problem of defaults on payments to SMEs, which has proved to be effective currently. Policies such as tax and fee cuts and inclusive financing continue to take effect and significantly reduce the burden on enterprises. In the meantime, we strive to promote the rapid development of SMEs towards high growth potential, advanced technology, and a strong market competitive edge. The MIIT worked with relevant government bodies and introduced policies on developing high-quality manufacturers and improving SMEs' competitiveness. Over 40,000 enterprises in China have high growth potential, advanced technology, and a strong market competitive edge. The number of "little giant" enterprises in China amounted to 4,762, and single-product manufacturing specialists reached 848. They have become the benchmark demonstration enterprises in their respective and specialized fields, and a group of innovative enterprises and business startups continue to emerge and grow.
Fourth, the information and telecom industry made new leaps forward. Last year, by further leveraging the enabling role of the new generation of information technology, we continued improving and building new types of infrastructure, and vigorously fostered new forms of business and new applications, thus continuously enhancing our capacity to support the digital transformation of the economy and society. Here we outline the main features. First, the industry developed at an increasingly higher speed. In 2021, the revenue of the telecom business increased by 8% year on year, and that of software and information technology services grew by 17.7% year on year. The construction of "double gigabit" network infrastructure sped up, covering 300 million households with gigabit optical fiber networks. A total of 1.43 million 5G base stations were established and opened, and 512,000 administrative villages across the country got access to broadband. All those are of historic significance. What is also historic is that telecom difficulties in poor areas were addressed, a remarkable achievement even worldwide. Substantial outcomes were made in the innovative supervision of the industry, with major progress in special projects to regulate the internet industry, regulate apps infringing on users' rights and interests, and upgrade internet applications for the aged. The foundation of security was continuously consolidated, with solid progress in the prevention and combat of telecom and internet fraud, the protection of personal information, and the management of data security. At the same time, the whole industry actively participated in and served major national events. We offered sound telecom and cyber security services to the celebrations of the centenary of the founding of the Communist Party of China (CPC) last year and are going all out to ensure those services at the Winter Olympics and Paralympics. All the venues in the three competition zones in Beijing and Zhangjiakou have realized full coverage of 5G, strong support and guarantee for online broadcasting of events and a smart Winter Olympics.
Those are the main features of our work in four aspects last year. In 2022, we face a more challenging, complex, and uncertain external environment. China's industrial economy faces triple pressure from shrinking demand, supply shock, and weakening expectations, and the task of ensuring stable growth remains a challenge. We will thoroughly implement the spirit of General Secretary Xi Jinping's important addresses and the Central Economic Work Conference, continue to follow the general principle of pursuing progress while ensuring stability, and promote the high-quality development of industry and information technology. We will coordinate epidemic prevention and control and economic and social development, balance development and security imperatives, focus on our goal of building China into a manufacturer of quality and building China's strength in cyberspace, and give top priority to stabilizing industrial growth. We will do a good job in anticipatory adjustments, fine-tuning, and cross-cyclical adjustments; strive to enhance the core competitiveness of the manufacturing sector; improve the quality and efficiency of the industrial economy while promoting its stability; and keep the proportion of the manufacturing sector basically stable. We will strengthen and boost the real economy and lay a solid foundation for the economy so as to welcome the convening of the 20th CPC National Congress with outstanding achievements.
That is all I have for now. My colleagues and I are ready to answer your questions. Thank you.
Chen Wenjun:
Thank you, Mr. Tian. The floor is now open to questions. Please indicate the media organization you work for before raising questions.
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CCTV:
The year 2021 marks the first year of the 14th Five-year Plan period (2021-2025) and a year of special importance in China's modernization drive. Industry is the leading part of the national economy, and a stable industry helps stabilize the economy. What is your comment on the overall performance of the industrial economy in 2021? Thank you.
Tian Yulong:
Thank you for your question. I mentioned it when briefing on the overall situation just now. In the special year 2021, we strived to overcome adversities brought by sporadic epidemic outbreaks, tighter supply of production factors, and constantly high commodity prices and adopted a slew of policies and measures to stabilize industrial growth in accordance with the decisions and plans of the CPC Central Committee and the State Council. Our efforts ensured the recovery of the industrial economy, and enabled progress in stabilizing and modernizing the industry chain and supply chains as well as even stronger internal driving forces for high-quality development. All those provided strong support for macroeconomic growth.
In general, the performance of the industrial economy last year had the following features:
First, the industrial economy sustained its recovery. It maintained an overall stable development last year, while the growth rate was relatively higher in the former quarters and lower in the latter. In the third quarter in particular, the growth rate declined month by month due to the epidemic, flooding, and the tighter supply of energy. Under the leadership of the CPC Central Committee and the State Council, the MIIT, together with other relevant departments, implemented a series of measures, including helping enterprises out of difficulties, ensuring energy supply, and stabilizing energy prices, which yielded remarkable results. The growth rate in the fourth quarter reversed the downward trend and began to pick up month by month. In 2021, China's industrial added value of industrial enterprises above designated size saw a year-on-year increase of 9.6% and a two-year average increase of 6.1%, higher than the pre-epidemic level in 2019. In particular, the value added to the manufacturing sector saw a year-on-year increase of 9.8% and a two-year average increase of 6.6%. The utilization rate of industrial capacity in 2021 was 77.5%, 3 percentage points higher than the previous year. Business performance improved significantly. In the first 11 months of last year, profits of industrial enterprises above designated size registered a year-on-year increase of 38% and a two-year average increase of 18.9%. Their operating margin reached 6.98%, a relatively high level in recent years. Industrial export maintained rapid growth, with the export delivery value of industrial enterprises above designated size logging a year-on-year increase of 17.7% and a two-year average increase of 8.3%. Export also showed a growth trend. Those altogether testify to a good and overall stable performance of our industrial economy.
Second, key industries have maintained growth. In 2021, 39 out of the 41 industrial categories continued to grow, with 15 industries registering more than double-digit growth. The added value of raw material manufacturing increased by 5% year on year, with a two-year average growth of 4.1%. Profits grew 92% year on year thanks to the raw material price rise, which contributed 60% to the profit growth of the whole industry. The raw material industry saw a sound performance last year. The added value of the equipment manufacturing industry registered a year-on-year growth of 12.9% and a two-year average growth of 9.7%, contributing over 40% to the overall industrial growth. Driven by the stay-at-home economy and overseas market demand, the electronic industry maintained a double-digit growth in its industrial added value and export delivery value. The added value of consumer goods manufacturing maintained an overall stable recovery with a year-on-year growth of 9.8% and a two-year average growth of 4.5%. In particular, driven by the demand for medical supplies to fight against COVID-19, the added value of the pharmaceutical manufacturing industry surged 24.8% year on year.
Third, the industrial structure has been constantly improved. Investment in the manufacturing sector has been adjusted and improved, recording a year-on-year growth of 13.5% in 2021, while that in high-tech manufacturing rose 22.2%. The proportion and structure of investment have also been constantly improved. Driven by investment, the added value of high-tech manufacturing grew rapidly, up 18.2% year on year. New intelligent and upgraded products also saw a rapid increase, so did the output of industrial robots, integrated circuits, and other new products. In particular, the production and sales of new energy vehicles exceeded 3.5 million, 1.6 times greater year on year. These are the highlights of manufacturing. Restructuring and replacing old growth drivers are making steady progress with remarkable effects. The 5G technology and industrial networks accelerated the digital transformation of manufacturing. Breakthroughs made in some key fundamental technologies also shored up the upgrading of manufacturing. The container production doubled, and the industry and supply chains of photovoltaic power, wind power, and ships are internationally competitive. Under the overall plan for carbon peak and carbon neutralization, we have formulated some plans, including implementation programs for the industrial sector and key industries involving non-ferrous metals and building materials. In the first 11 months of last year, the energy consumption per unit of the added value of industrial enterprises above designated size decreased by 5.5% year on year.
Fourth, small and medium-sized enterprises (SMEs) have resumed growth. We issued a series of policies to bail enterprises out, and further stimulate market players. In 2021, the revenue and profit of SMEs above designated size jumped 20.7% and 28.2% year on year, respectively, with two-year average growth of 9.8% and 17.1%, respectively, which are faster than the growth of the same period in 2019. We support SMEs to become more professional and specialized in niche sectors. A group of startups and innovative businesses are emerging. An MIIT survey of 1,185 "little giant" companies — leading SMEs — showed the profit margin for the first 11 months reached 10.9%, which is a good performance on the whole. Nevertheless, SMEs, especially small and micro businesses, are subject to market and epidemic changes and facing difficulties in their operation. We are stepping up efforts to help them.
Generally speaking, the current situation is still uncertain and complex. We are satisfied with the work in 2021 and confident to welcome 2022. We still have many favorable conditions, including fast economic growth, a sound growth momentum on the whole, China's leading role in COVID-19 response, a complete industrial system and sound supporting capacity, and a resilient economy with potential. Besides, with the implementation of both macro and micro policies, I am convinced that the overall development trend of the industry and information technology will not change in 2022, so will the fundamentals sustain China's long-term economic growth. With the implementation of these policies, we are confident of overcoming various difficulties to achieve a stable performance of the industrial economy. Thank you.
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CNBC:
I have two questions. Statistics show that chip and auto production has recovered in recent years. Does this mean that the shortage of chips will be solved soon? What's your outlook for 2022? The second question is about China's "dynamic zero-COVID-19" approach. Some foreign analysts are worried about its damage to China's supply chain. Is the MIIT concerned about the issue? What measures will be adopted to ensure stable production? Thank you.
Luo Junjie:
Thank you. The manufacturing capacity of integrated circuits continued to be strained last year, which led to a knock-on chip shortage through all sectors and significantly impacted the performance of global industries. In particular, the auto industry was hit worst. Many domestic auto producers have cut production or suspended production in the short term. According to our analysis, there are two reasons behind it. On the one hand, with upgrading social intelligence, the demand for chips – the most critical component in smart equipment – continues to grow. On the other hand, as the pandemic spreads globally, some countries are still imposing unjustified sanctions and suppression of enterprises from other countries, which has severely hit the global semiconductor supply chain. These overlapping factors have given rise to the chip shortage. As the market adjustment mechanism gradually plays its role, together with the joint efforts of governments, auto, and chip producers, the chip shortage in the auto sector is easing gradually. But we should also see that the stability of the global supply chain of integrated circuits is still facing severe challenges, and the chip supply will remain strained for a long time to come.
The integrated circuit (IC) industry is highly globalized. China has the world's largest integrated circuit market, and the Chinese government is committed to boosting close global cooperation to build sustainable and stable industrial and supply chains based on the principle of openness and development. Therefore, the MIIT has been keeping a close eye on the automobile chip shortage issue and actively responding to it by taking multiple measures to ensure chip supply and maintain the steady operation of the automobile industry. Next, we will also strengthen communication and cooperation with relevant countries and regions, encourage leading domestic and foreign enterprises to increase investment in a coordinated manner, and enhance the supply capacity of the whole chip industrial chain. In addition, we need to effectively implement the "Several Policies for Promoting High-quality Development of the Integrated Circuit Industry and the Software Industry in the New Era" No. 8 document for 2020 issued by the State Council and related supporting policies. By doing so with full efforts, we aim to promote a free flow of various resources, create a fair and just market environment, achieve high-quality development of the IC industry, and help build a global industrial system featuring co-existence and win-win cooperation. Thank you.
Tian Yulong:
Let me answer your question about the impact of the dynamic zero-COVID-19 approach. I noted that some foreign media wrote articles on the policy's negative influence on the industrial economy. As we all know, China has been following the anti-pandemic principle of preventing inbound cases and a domestic resurgence, which has so far generated remarkable results. In accordance with the requirements of the CPC Central Committee and the State Council, China has taken the lead to bring the COVID-19 under control by putting people and their lives first. It is fair to say that China has led the world in both economic growth and pandemic prevention and control.
As I said just now, China's economic growth, especially in the industrial sector, shows that the country's anti-pandemic policy is beneficial to the industrial and supply chains. It is by adopting the right pandemic prevention strategies that China has led the world to resume work and production and ensure the stability and security of the industrial and supply chains. As a result, China's economic development, export, and some other sectors are all growing smoothly on the whole. In my opinion, the stability of the industrial and supply chains can be attributed to our effective anti-pandemic endeavors. Of course, you may be concerned about the current multiple sporadic outbreaks in China. Some cities involved have taken control measures, which may exert temporary and small-scale influences on the industrial and supply chains of some regions. However, the short-term effects in a limited scope did not have a big impact on the macro-industrial chain. In particular, with the increasing precision of China's pandemic prevention and control policies, there will not be a big impact on the industrial and supply chains, especially on industrial enterprises, and the stability and security of the chains can still be guaranteed. Certainly, the pandemic is still spreading internationally and has yet to be effectively controlled, making the external environment of the industrial and supply chains uncertain, which will impact China's industrial and supply chains to some extent.
I believe that by adhering to the anti-pandemic policies and taking more precise and effective measures to ensure the safety of supply and industrial chains, China's industrial and supply chains will become more resilient. We will also make greater efforts to keep the global supply chains smooth, which I deem essential to the stable operation of our industries, the production-marketing coordination, the unimpeded domestic and foreign trade, and the industrial economy's steady development this year. Coordinating pandemic prevention and control with economic and social development, especially industrial economic growth, remains a priority this year.
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CNR:
According to the recently held National Work Conference on Industry and Information Technology, the industry and information technology system have successfully fulfilled the main targets and tasks for the year, realizing a good start to the 14th Five-Year Plan (2021-2025) period. Could you give us more details on the development of the information and communications industry, including 5G and the industrial internet? Thank you.
Tian Yulong:
Thank you for your question. I would like to invite Mr. Zhao Zhiguo to answer it.
Zhao Zhiguo:
Thank you for your question. Last year, the information and communications industry deepened efforts to implement the strategy of building China into a strong country in manufacturing and cyberspace and made new strides in accelerating the integration of information and communications technologies with diverse economic and social sectors. The annual revenue of the telecom business reached 1.47 trillion yuan with a year-on-year growth of 8%, up 4.4 percentage points year on year. The total volume of the telecom business stood at 1.7 trillion yuan, up 27.8% year on year. The measures taken are mainly as follows:
First, we have strengthened planning for the 14th Five-Year Plan period and sped up improvements to the policy planning system. We issued a development plan for the information and communications industry during the 14th Five-Year Plan period and launched five three-year (2021-2023) action plans of the coordinated development of "dual gigabit" networks, the application of 5G, the industrial internet innovation and development, the new data center development, and the IPv6 traffic increase. The plans have together constituted the policy system for the development of the information and communications industry, giving full play to the guiding role of the policies.
Second, the construction of new types of infrastructure has achieved remarkable results, and the support capacity for digital transformation has been further enhanced. The number of new 5G base stations in the whole year reached 654,000 while the number of 5G mobile terminal connections reached 518 million. The gigabit optical networks covered 300 million households, and the first batch of 29 "gigabit cities" were built, which promoted the development of China's dual-gigabit network capability, users' quality and innovative applications, achieving good results. The industrial internet infrastructure, featuring the coordinated development of "cloud computing, networks, edge computing and terminals," has basically taken shape. "5G+industrial internet" has shaped 20 typical application scenarios, such as remote equipment control and machine-vision quality inspection, across 10 key industries, such as mining, steel and electric power. Remarkable achievements were made in empowering various industries and businesses to transform and upgrade.
Third, solid steps have been taken towards industry oversight, and supervision efficiency has continued to improve. The modernization of industry supervision has also improved. A new regulatory system based on credit is in its nascent stages, and the coordinated national regulatory pattern is being rapidly constructed. Platform governance achieved important breakthroughs. We organized special rectification actions for the internet industry as well as actions to improve user experience of information and communications services. As a result, the compliance of business operations, the openness of the industry ecology and user satisfaction have been significantly improved. We have further promoted in-depth special rectification campaigns on apps' infringements of user rights and interests. We have built a national app testing platform, with the ability to test 180,000 apps every month and carry out technical testing, which has basically solved the problems of "not being able to close pop-ups" and "unexpected redirects of pop-ups."
Fourth, the capability to safeguard cyber security has been continuously improved, and defense measures have been consolidated. We have promulgated the "Regulation on the Management of Security Loopholes of Network Products," established a national loophole management system, built a 5G application security innovation demonstration center, and improved 5G application security safeguard capabilities. We have fully implemented real-name registration management for the internet of vehicles (IoV), and the security management system of the IoV has basically been established. We further implemented the classified network security management of industrial internet enterprises, optimized the policy environment for the development of the cyber security industry, deepened the governance of the basic level of the industry, and made significant breakthroughs in preventing and controlling telecommunications and online fraud.
Fifth, deeply and practically serving people's livelihood, and making digital life more convenient. Universal telecommunications services have been steadily advanced, and we made the historic realization of "broadband access to every village" for each administrative village across the country, helping more people get on the "digital train." For special groups such as rural households alleviated from poverty, we have carried out targeted fee reduction and other related work, saving a total of 8 billion yuan for users, which has greatly reduced the cost of network usage. The first batch of 217 websites and apps closely related to elder communities have undergone age-appropriate transformations and passed the evaluation, providing more comprehensive, considerate and direct facilitation services for the elderly. 5G technology has been used to empower the "smart Winter Olympics" and create smart applications such as smart viewing, cloud broadcasting and smart venues, further enriching the spectator experience, as well as improving event services and venue operations.
In the next step, the MIIT will resolutely implement the guiding principles of the Central Economic Work Conference, focus on development as the top priority and promote steady progress, take effective measures to ensure the information and communications industry maintain stable and relatively rapid growth, continue to strengthen 5G construction and innovative applications, actively promote the upgrading of the industrial internet, accelerate the construction of an agile, accurate and efficient industry supervision system, steadily promote the innovative development of the cyber and data security industry, and ultimately promote the high-quality development of the information and communications industry. Thank you.
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Hong Kong Economic Herald:
In recent years, the rapid development of the digital economy has attracted widespread attention and has become a new engine for the 14th Five-Year Plan. What major achievements did the MIIT make in promoting the development of the digital economy last year? How do you view digital economy trends in the next stage? And how can you make the digital economy operate stably and with a far reach? Thank you.
Tian Yulong:
Thank you for your questions. Let me answer them. The CPC Central Committee and the State Council attach great importance to the digital economy. General Secretary Xi Jinping has given important instructions about it on many occasions. It's fair to say that the development of the digital economy entered a "fast lane" last year. There are several features:
First, since the development of digital economy is also an integration of multiple economic fields, it primarily focuses on the innovation of key technologies. Last year, we made a series of breakthroughs in key core technology areas. Our innovation and development of big data, cloud computing and blockchain are currently at the forefront of the world. Our advantages in this regard are obvious. 5G mobile communications technology, equipment and applications are leading the world. Smartphones have also entered the world's advanced ranks. The foundation of the digital economy, in terms of integrated circuits and software, has also achieved milestones. Therefore, in terms of technological breakthroughs, the digital economy achieved gratifying results last year.
Second, in terms of overcoming difficulties in the digital industry, we have continued to strengthen the industrial economy. There are several characteristics. After the construction of new types of information infrastructure gathered speed, the comprehensive strength of our information infrastructure has reached a new level. As I mentioned just now, we have built the world's largest optical fiber network and 5G network, which lay an important foundation for realizing the digital economy. We have launched 1.425 million 5G base stations. Pushing forward the integration of our cyber industry applications has brought the development of the digital economy into a "fast lane." The resilience of the development of the digital economy is also very remarkable. Last year, business revenue from the software information technology service industry increased by 17.7%, ahead of the industry average. The development of the home economy, online economy and information development has raced through a "fast lane" due to the COVID-19 pandemic, boosting the growth of the industry and the demand.
Third, the digitalization of manufacturing picked up speed. The intelligent manufacturing equipment industry developed rapidly. Last year, the output value of industrial robot manufacturing enterprises above the designated size surged 30.8% year on year; and that of 3D printing equipment enterprises registered a year-on-year increase of 27.7%. In particular, more than 150 industrial internet platforms with national influence were established and over 2,000 "5G+industrial internet" projects are under construction. Digital technology is crucial for SMEs, especially those with high growth potential, advanced technology and a competitive edge in the market. Most of them are innovative enterprises with advantages as latecomers to the digital economy and they develop relatively fast. We believe these SMEs will perform exceptionally well in the digital economy.
Fourth, the ecology of the digital economy improved. We deepened reforms to streamline administration and delegate power, improve regulation and upgrade services. We also simplified approval procedures and optimized relevant processes. These measures supported the development of digital economy enterprises by reducing government-imposed transaction costs. In collaboration with other departments and local authorities, we built a number of digital industrial clusters which leveraged the advantages of different regions in industry, technology and talent. As you might know from news reports, local authorities across the country hosted many exhibitions, conferences and forums, centered around the digital economy last year, while working to facilitate the flow of digital economy factors and upgrade industrial clusters. In addition, we engaged more actively with international efforts through bilateral and multilateral mechanisms such as G20, participated in the formulation of digital rules and cooperated in data and cyber security, and helped more Chinese digital enterprises go global. All these have contributed to the building of a global cyber-community with a shared future. Therefore, the overall development trends of the digital economy are encouraging. Next, we will continue to follow the guidance of the plan to facilitate the development of the digital economy in the 14th Five-Year Plan period (2021-2025) issued by the State Council. We will focus on accelerating the integration of digital and real economies, promoting the development of digital information infrastructure and improving the digital economy governance system. We will take coordinated measures to promote the development of digital industries and the digital transformation of traditional industries, empowering traditional industries with next-generation information technology and fostering new industries, new businesses and new models. Under the guidance of the plan, we will mobilize forces and resources from all quarters to ensure the rapid and stable development of the digital economy. This is our goal and I believe we will achieve it. Thanks.
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Yicai:
Sporadic cases have been reported in several regions, and the base number for the first quarter of last year was relatively high. In this context, what do you think of the industrial growth rate in the first quarter of this year, and what measures will be taken to boost the industrial economy? Thanks.
Tian Yulong:
That's a good question. Mr. Luo Junjie will answer it.
Luo Junjie:
Thanks. Mr. Tian has already mentioned this issue. Facing the downward pressure on the industrial economy, we have been formulating new development policies in collaboration with relevant departments since the second half of last year. In the fourth quarter, the MIIT and the National Development and Reform Commission jointly issued an implementation plan for invigorating the industrial economy and promoting high-quality industrial development. The plan, which includes 16 policy measures to stabilize industrial growth from four aspects, effectively boosted the industrial economy in the fourth quarter of last year. Currently, the industrial economy's recovery is stuttering and we have been facing significant downward pressure in the first quarter of this year due to a range of factors. Globally, there are many uncertainties about the pandemic and the world's economic growth and trade are sluggish. Domestic factors include concerns about supply constraints, weak consumption and investment demand, difficulties facing SMEs, sporadic COVID-19 outbreaks, the base effect, etc. Well aware of the situation, we made plans early and took proactive measures. At the end of last year, we made arrangements to ensure a stable start for industrial performance during the first quarter of this year. Local industry and information technology authorities were required to help enterprises organize operations during the New Year's Day and Spring Festival holidays, strengthen the supply of production factors such as raw materials and labor, and resume work and production after the Spring Festival holiday. In the next step, we will faithfully implement the guiding principles of the Central Economic Work Conference, prioritize stability and pursue progress while ensuring stability. We will continue to strictly observe virus prevention and control protocols and implement existing policies and measures. Meanwhile, we will respond to new developments and roll out more effective measures in collaboration with other departments in terms of finance and taxation, ensuring supply and price stability and supporting the development of SMEs. We will carry out anticipatory, fine-tuning, and cross-cycle adjustments. We will take a series of measures and spare no effort to ensure steady industrial growth in the first quarter, which will act as a "ballast" for the overall economic development. Specifically, we will do the following:
First, we will work hard to boost investment in the manufacturing sector. We will give play to investment's key role in stabilizing industrial growth and accelerate the launch of major projects listed in the country's 14th Five-Year Plan, as well as the corresponding five-year plan in the field of industry and information technology. We will establish a mobilization and service mechanism for major programs in collaboration with relevant departments and local governments. At the same time, we will strengthen the cooperation between industry and finance, encourage and support enterprises to increase investments and guide financial institutions to bolster their support for the digitalization and green transformation of enterprises.
Second, we will actively guide and expand consumption demand. We will seize opportunities from the shopping seasons associated with traditional festivals, such as Spring Festival and Lantern Festival, and unleash the potential of the huge domestic market and tap into residents' consumption potential. We will further implement the strategy of increasing the variety and quality of products and nurturing domestic brands, promote the upgrade of information consumption, and boost the development of the intelligent connected vehicle (ICV) industry, the smart health and senior care industry, as well as the ice and snow equipment industry. We will expand the consumption of new energy vehicles and encourage the use of green smart home appliances and green building materials in the countryside where conditions permit.
Third, we will work to ensure the supply and coordination of energy factors. We will precisely unclog bottlenecks within industrial chains and supply chains, address chip shortage issues, container shortages and labor shortages, accelerate efforts to ensure and coordinate factors of energy, logistics and labor force, prioritize the stable operation of key industrial chains and supply chains, with an emphasis on addressing the chip shortage in the auto industry and maintaining the smooth operation of key component supply chains.
Fourth, we will boost the role of the new impetus as a growth driver. We will stimulate new dynamics of economic growth through upgrading traditional industries with digital and smart technologies and create big, strong emerging industries, improve the multi-level system of industrial internet platforms, deepen the integration and application of 5G and gigabit fiber-optic networks in the manufacturing, mines, energy, agriculture and transportation sectors to contribute to the digital transformation of those industries. We will actively expand applications for virtual reality and smart health and elderly care products, as well as foster emerging industries such as big data, artificial intelligence and Internet of Vehicles. Thank you.
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People's Post & Telecommunications News:
What results have China achieved in 5G developments and applications and what are the shortcomings? What are the MIIT's deployment and plans for future 5G development and what are the priorities? Thank you.
Zhao Zhiguo:
Thank you. Over the past year, the MIIT has implemented decisions from the CPC Central Committee and the State Council, and mobilized forces from all industries to promote innovative 5G development all while making notable progress.
First, we have strengthened policy guidance. The MIIT, together with nine other departments, issued a three-year action plan aimed at coordinating 5G integration and application, and fostering new drivers of economic and social development. We worked with the National Health Commission to carry out 5G plus medical health pilot programs that expand 5G applications in the medical health sector and build a model of sound development of smart medical care. We also worked with the Ministry of Education to carry out 5G plus smart education pilot programs to promote the high-quality development of 5G-enabled education.
Second, we have achieved steady progress in 5G development. China has built the world's largest 5G network with the most advanced technologies. By the end of last year, the country had built more than 1.4 million 5G base stations, of which more than 800,000 are jointly built and shared. The 5G network covers all prefecture-level cities, urban areas of more than 98% counties and 80% townships. The breadth and width of 5G coverage continued to expand during the past year. China's 5G mobile phone shipments stood at 266 million units last year, up 63.5% year on year, showing a steady growth trend.
Third, the application innovation has been improved in both quantity and quality. We organized the fourth "Bloom Cup" 5G Application Competition, which collected more than 12,000 projects from almost 7,000 participants. The number and quality of the projects reached a new high. The application of 5G+4K/8K ultra HD video and 5G+AR/VR was applied to many scenarios last year, such as the art performance marking the 100th anniversary of the CPC's founding, live events, and housing and shopping services, bringing a new experience to consumers. 5G applications in the fields of industry, culture and tourism, energy, and transportation have also continued to expand. Take the 5G plus industrial internet as an example. Typical scenarios, including remote equipment control, machine vision inspection and production efficiency control, have been applied in-depth in key areas, such as mining, ports, iron and steel, and electricity and petrochemical sectors, which has helped enterprises improve quality, reduce costs, improve efficiency and realize green and safe development. Notable progress has also been made in this regard.
Of course, we should also note that there are still challenges in 5G development, including the bottleneck in technology industries, immature business models and the ecological environment yet to be further optimized, which needs coordinated forces from all sectors to promote the scalable development of 5G. The year 2022 is crucial for the scalable development of 5G application, and we will continue to implement the policy decisions and plans of the CPC Central Committee and the State Council, boost the coverage of the 5G network, and advance in-depth integration of 5G and vertical industries. Our major efforts are as follows:
First, we will further consolidate the 5G industry base. We will encourage industrial sectors to make key 5G technology breakthroughs, support enterprises in actively participating in the formulation of a series of international 5G standards, encourage them to develop various 5G chips and modules in a timely manner to meet diversified demands of the industrial application, boost the growth of new end-use products, such as 5G smart mobile phones, wearable devices, virtual reality (VR) and augmented reality (AR), to enrich carriers of 5G technology applications.
Second, we will make steady progress in 5G network development. We will take a moderately proactive approach in advancing 5G network development, further implement the principle of joint development and sharing, continue to expand 5G coverage in counties and towns, improve deep coverage level of the 5G network in crowded areas, such as high-speed trains, transportation junctions, and shopping malls, as well as key sectors of industries and medical care.
Third, we will promote large-scale utilization of 5G. We will strive to do a good job in implementing the "Sailing" action plan for 5G application , hold the fifth "Blossom Cup" 5G application competition, and carry out related work on pilot "5G plus medical care" and "5G plus smart education" projects. We will also promote the application of 5G technology in broadcasting, travel, and other scenarios to help deliver a smart Winter Olympics. We will upgrade the "5G+industrial internet" application and tap into a batch of typical application scenarios at production lines and factories, connecting 5G technology throughout the whole process of engineering projects. We will implement a plan to improve 5G application for individuals and work to launch new types of terminals and apps in a bid to increase people's sense of accomplishment and happiness. Thanks.
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Thecover.cn:
What achievements has the MIIT made in its special campaign on app governance over the past year? Will these efforts be strengthened in 2022? And what is the focus of this work? Thanks.
Tian Yulong:
Mr. Zhao will answer your questions.
Zhao Zhiguo:
Thank you for your questions. The mobile internet has grown rapidly in recent years. Apps are closely related to the production and life of the public. Against this backdrop, the protection of personal information has become a hot issue that hundreds of millions of users are concerned about. The MIIT takes a people-centered approach and attaches great importance to the protection of users' rights and interests. Focusing on such problems as rule-breaking access of phone users' permission and the collection of users' information beyond the normal scope, we have carried out special campaigns for app management. In 2021, we strengthened coordination with other departments, and took comprehensive measures to address a series of prominent problems, and made remarkable progress. Our work can be summarized as follows:
First, we worked to improve laws, regulations and standards to better govern in accordance with the law. App governance must prioritize laws and regulations. Last year, the Personal Information Protection Law, Data Security Law, and other laws and regulations were issued. To further specify requirements, we drafted the Provisions on the Protection and Management of Personal Information on Mobile Apps, for which we have solicited opinions and suggestions from the public. In addition, we promoted the formulation of industry standards such as ones for evaluating the minimum necessity principle in the collection and use of personal information by apps. We can say that these policies and standards have provided strong support for app governance.
Second, we targeted hot and difficult issues and carried out special campaigns. The issues considered most urgent, difficult, worrisome and expected by users are our biggest concern and focus. We carried out campaigns on pop-ups, which appear as an app opens and are difficult to close or mislead users to another page, and effectively urged major internet companies to solve this strongly-complained problem. We conducted special assessments on apps in the travel and accommodation sectors during major festivals and holidays. Last year, we carried out 12 batches of technical assessment for apps – nearly once a month. A total of 1,549 apps were publicly criticized for violating regulations, and 514 apps were taken down for failing to correct their violations. To sum up, we continued to create a cleaner app environment.
Third, we strengthened the application of technologies in app governance. There are now millions of apps in the app stores, and we must further strengthen our technological examination abilities. Last year, with artificial intelligence, big data, and other new technologies, the capability of automatic examination of the national platform for technological examination of apps has improved greatly. 2.08 million apps were examined, which basically covered all apps of major internet companies in China.
Fourth, we guided businesses to strengthen self-discipline and addressed problems at the source. Businesses should take primary responsibility and strengthen their self-discipline, which is of key importance to protect users' rights and interests and push ahead the healthy development of the industry. Last year, we organized related industry associations to call meetings with internet companies on the regulation of personal information protection in apps and provided 16 trainings for nearly a thousand companies to raise their red-line awareness, constantly improve internal governance, and operate in accordance with laws and regulations, all aimed to solve the problem at the source.
Fifth, we improved user experience of services and pursued innovation in governance. Whether our work is good or not ultimately depends on users' feelings. Last November, focusing on major issues affecting user experience, we launched a campaign to improve user experience of information and communications services. We call it the "524" campaign. We urged companies to make a "dual list" for the protection of personal information, improve privacy policies and the management of accessing of users' permission, and optimize customer services with an aim to improve both services and user experience in an interactive manner.
In 2022, we will focus on following major aspects:
First, we will continue to pursue comprehensive measures and improve regulation throughout the chain. We will focus on the supervision of those taking major responsibilities, covering all app stores, third-party software development kits (SDK), terminal companies, and major internet companies, among others, to create a safer consumption environment in the information and communications sector.
Second, we will deepen the "524" campaign to improve service and steadily promote related companies to implement the tasks and requirements of the campaign. We will conduct reviews on a timely basis to better consolidate our achievements and improve users' sense of accomplishment.
Third, we will push ahead joint governance and build a long-term mechanism. We will strengthen coordination with relevant departments to form regulatory synergy and form a comprehensive system featuring government regulation, self-discipline of companies, media supervision, and participation from social organizations and users, thus creating a safer and cleaner app application environment. Thanks.
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China Electronics News:
SMEs are the main force driving national social-economic development, and the CPC Central Committee and the State Council have paid much attention to them by releasing a slew of supportive measures that help them overcome difficulties. How is the current growth of these enterprises? What measures will the MIIT take to further promote SMEs' development?
Tian Yulong:
Thank you for your questions. The development of SMEs remains a public concern, and I have elaborated on them, however, I will add some more.
As I mentioned just now, the CPC Central Committee and the State Council have attached much attention to SMEs – the mainstay of China's social-economic development – and helped them overcome difficulties while stimulating their growth. This was our main task last year. Under the guidance of the State Council's leading group on the development of SMEs, the MIIT, in coordination with other departments and local authorities, has yielded notable results. Focusing on policy framework, services system and the development environment, we prioritized the two areas of financing and protecting SMEs' rights and interests, striving to enhance their capacity. Moreover, we adopted comprehensive policies including cutting taxes and fees, providing more financial support and better services; fostering and empowering high-quality SMEs to promote their steady and healthy development.
According to current statistical data, revenues and total profits of industrial SMEs above designated size rose 20.7% and 28.2% respectively, with average two-year growth of 9.8% and 17.1% respectively. Therefore, generally, it demonstrates a steady and healthy momentum. Big data based on monitoring small and micro businesses' power consumption also showed that from January to November of last year, the power consumption of these firms increased 9.6% year-on-year, and 49.4% of these firms registered a higher power consumption compared to the same period of the previous year, reflecting relatively high productivity. Generally speaking, the SMEs grew well, in spite of some difficulties. The micro and small businesses, in particular, are still facing problems concerning the external industrial chain, as well as pandemic prevention and control, and are in need of improvement.
Next, we will remain focused on the development of SMEs.
First, we will ensure stability and boost the steady and healthy development of SMEs. We will draft more targeted policies and regulations, and continue carrying out the established policies and measures to help them overcome difficulties.
Second, we will promote the high-quality development of SMEs, particularly specialized, refined, characteristic and innovative SMEs. We will improve their innovative capacity and specialized level, as well as their ability to address difficulties so as to achieve sustainable development.
Third, we will strengthen services. The government should coordinate with other sectors and local authorities to implement more supportive policies and establish more service systems. Continued efforts should be made to address issues regarding offering rewards or subsidies to qualified financing guarantee agencies, promoting the targeted docking of enterprises and financial institutions, expanding financing channels, as well as mitigating difficulties faced by the SMEs in accessing affordable financing, so as to ensure the measures are targeted and effective.
Fourth, we will further improve the development environment for SMEs and take effective measures to protect their lawful rights and interests. We have issued guideline on the development of SMEs during the 14th Five-Year Plan period (2021-2025), and will continue to improve our policies by making further assessments and supervising the business environment. We will fully implement the Regulation on Ensuring Payments to Small and Medium-Sized Enterprises to protect their lawful rights and interests. We also call on people from all walks of life to protect SMEs' lawful rights and interests and further improve the long-term mechanism for preventing and resolving payment arrears to SMEs, continue taking special actions to clear arrears owed to SMEs, and ensure the actual implementation of these regulations, policies and measures to benefit the SMEs and help them grow steadily and rapidly. Thank you.
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ThePaper.cn:
The Central Economic Work Conference emphasized that it is necessary to enhance the core competitiveness of the manufacturing industry. During a State Council executive meeting, the shifts from medium- and low-end manufacturing to medium- and high-end manufacturing were also underlined. What progress has the MIIT made in enhancing the core competitiveness of the manufacturing industry? Are there further plans? Thank you.
Tian Yulong:
Thank you for your concern and support to MIIT. Improving the core competitiveness of the manufacturing industry is a requirement put forward during this year's Central Economic Work Conference. This is also a primary task for us in this year and beyond. While ensuring the stability and security of the supply chain and industrial chain in the early stage, we will further enhance the core competitiveness of the manufacturing industry in the next step.
The stability and security of the industrial chain and supply chain are vital to the core competitiveness of the manufacturing industry. Overall, the industrial economy restored growth in the past year. In the first three quarters, the manufacturing value-added in GDP increased to 27.4%. The proportion of the manufacturing industry remained stable. The efficiency of enterprises has also improved significantly. In the first 11 months of last year, profits from industrial enterprises above the designated size increased by 38% year-on-year and 41.3% compared with the same period in 2019. The overall development of the manufacturing industry is relatively fast, and the efficiency improvement is also reasonably noticeable. This is mainly because the resilience of the industrial chain and supply chain has been secured, significantly improving our entire manufacturing industry, especially in some primary and critical areas. The overall capacity has been improved. In particular, the enhancement is reflected in equipment manufacturing, including containers, photovoltaics, wind power, energy, and electricity. International competitiveness has also been enhanced. These are the specific reflections of the improvement of core competitiveness. Last year, the high-tech and equipment manufacturing industries' added value increased by 18.2% and 12.9% year-on-year, respectively. Considering the negative impact of the COVID-19, this growth rate is awe-inspiring.
The improvement of the core competitiveness of the manufacturing industry is our main task. Therefore, I summarize the target using the term "3+3." This means three foundations and three focuses. To enhance our core competitiveness, we must lay solid foundations in the following three aspects:
First, we should improve the foundation of industrial technologies. The development of the manufacturing industry hinges on core and key technologies. In this regard, we will make great efforts to launch special projects on developing the key technologies, the lack of which will restrict the improvement of the core competitiveness of the manufacturing industry. Furthermore, we will establish several manufacturing innovation centers. In particular, we will jointly build several centers with local governments to promote the formation of industrial clusters and industrial chain aggregation and enable the coordinated development of upstream and downstream of the manufacturing industry.
Second, we will enhance the technological innovation of the industry. Industrial foundations underpin technology. Six foundations, including essential components, parts, materials, software, basic techniques and industrial technologies, are crucial to improving the manufacturing industry's core competitiveness. We will further accelerate the implementation of projects aiming to reinforce the industrial foundation to enhance the core competitiveness of the industry further.
Third, we will further increase the resilience of the industrial chain and supply chain. We will settle problems arising in the industrial chain and supply chain, increase the advantages, and strengthen weak links. We will upgrade the industry, improve quality, and increase efficiency. We will increase efforts to boost investment in the manufacturing industry comprehensively improve the completeness, resilience and standard of the industrial chain, and accelerate technological upgrades and equipment renewal.
The following will be three focuses. The first is to underline the development of enterprises with high growth potential, advanced technology, and a strong market competitive edge. Therefore, we will launch a series of policies such as fee and tax reduction to promote the development of enterprises with high growth potential, advanced technology, and strong market competitive edge, making them players of improving core competitiveness of the manufacturing industry and a significant driving force of the industrial chain and supply chain.
The second is to improve intelligent manufacturing significantly. With digital and information technologies, we will accelerate the digital transformation and upgrading of the manufacturing industry to maintain the leading position of the equipment manufacturing industry and high-tech manufacturing industry, particularly in manufacturing some high-level components and applications of "5G+industrial internet". To improve the capability, intelligent manufacturing should be our priority for investing our efforts and making breakthroughs.
The third is implementing carbon peaking actions in the industrial sector to achieve green manufacturing. Efforts should be made to accelerate the peaking of carbon emissions in key industries and key areas. We will vigorously develop green manufacturing, leading the upgrades and transformation of the technologies of the manufacturing industry. We will carry out green and low-carbon technology application and product development and implement industrial energy efficiency and water efficiency improvement plans. Low-carbon and green manufacturing is an important driving force for the transformation and upgrading of the manufacturing industry, as well as for its innovation and development. We must also curb the reckless development of high-energy intensity and highly pollutive projects.
With these six measures, the core competitiveness of the manufacturing industry will be significantly improved. Therefore, these will be our focuses in 2022 and the 14th Five-Year Plan (2021-25) period. That's all for my answer to this question. Thank you.
Chen Wenjun:
Thank you to all the speakers and friends from the media. Today's press conference is concluded.
Translated and edited by Zhang Jiaqi, Liu Sitong, Duan Yaying, Liu Qiang, Xu Xiaoxuan, Wang Yiming, Zhang Rui, Chen Xia, Zhang Liying, Wang Yanfang, Yang Xi, Li Huiru, Zhang Tingting, Huang Shan, Wang Qian, Zhu Bochen, Yuan Fang, Cui Can, Jay Birbeck, Drew Pittock and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
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