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Read in Chinese

Speakers:

Xiao Yaqing, minister of industry and information technology

Xin Guobin, vice minister of industry and information technology

Tian Yulong, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT)

Chairperson:

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

Date: 

Feb. 28, 2022

Shou Xiaoli:

Ladies and gentlemen, good morning. Welcome to this press briefing being held by the State Council Information Office (SCIO). Today, we have invited Mr. Xiao Yaqing, minister of industry and information technology, to brief you on promoting the steady operation and quality upgrading of industry and information and communication technologies (ICTs), and to answer your questions. We also have with us Mr. Xin Guobin, vice minister of industry and information technology, and Mr. Tian Yulong, chief engineer and spokesperson of the Ministry of Industry and Information Technology (MIIT).

Now, I will give the floor to Mr. Xiao Yaqing.

Xiao Yaqing:

Ladies and gentlemen, friends from the media, good morning. I'd like to begin by thanking you for your attention and support for developing the industry and information technology sector. Together with my colleagues, I'm also glad to speak with you on promoting the steady operation and quality upgrading of industry and ICTs.

As we all know, 2021 was an extraordinary year, marking a milestone in the history of the Communist Party of China (CPC) and the country. Over the past year, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the Party and the country have achieved new and major achievements in various undertakings. China has taken a leading position in both economic development and pandemic control worldwide, and new steps have been taken to build a new development pattern. New results have been achieved in high-quality development, and the implementation of the 14th Five-Year Plan is off to a good start.

Earnestly carrying out decisions made by the CPC Central Committee and the State Council, the MIIT has forged ahead, overcome difficulties, redoubled its efforts, and effectively responded to risks and challenges. Under the complex and severe situation, the outlook for the industry and information sector is positive, which has contributed to economic and social development. This is mainly reflected in the following aspects:

I. The industrial economy saw sustained recovery and development. Here are some figures:

First, the added value of industries above designated size increased by 9.6%, an increase of 6.8 percentage points over 2020, or an average two-year growth rate of 6.1%. Among them, the added value of the manufacturing industry increased by 9.8%, with an average two-year growth rate of 6.6%. The added value of the manufacturing industry accounted for 27.4% of GDP, with a total amount of 31.4 trillion yuan, ranking first in the world for 12 consecutive years.

Second, the profits of industrial enterprises above designated size increased by 34.3%, an increase of 30.2 percentage points over the previous year, or an average two-year growth rate of 18.2%.

Third, the national industrial capacity utilization rate came in at 77.5%. This is a relatively high level for recent years.

II. The resilience of the supply and industrial chains has been improved. Efforts have been made to solve problems that affect industrial chains and supply chains, and key industrial chains remain safe and stable. The international competitiveness of industrial chains in areas such as photovoltaics, wind power and shipping have been further enhanced. The volume of containers, once in shortage, more than doubled last year, up by 110.6%. Chip production also rose by 33.3%. The export delivery value of industrial enterprises above designated size logged a year-on-year increase of 17.7% and a two-year average increase of 8.3%, which is a high level for recent years. Exports of China's industrial products have made an important contribution to the response to the COVID-19, maintaining the stability and smoothness of the global industrial and supply chains, and promoting the recovery and growth of the global industrial economy.

III. The industrial structure was further optimized and upgraded. This can be seen from three aspects:

First, the leading role of the high-tech manufacturing industry and equipment manufacturing industry has been significantly enhanced, with the added value increasing by 18.2% and 12.9%, respectively. Their contribution rates to the growth of the above-scale industry reached 28.6% and 45%, respectively.

Second, the pace of digital and green transformation of the manufacturing industry has accelerated, and new progress has been made in cluster development. The numerical control rate of key processes of above designated size in key areas was 55.3%, and the penetration rate of digital research and development and design tools was 74.7%. All indicators showed a positive trend. We can also see that energy consumption of the added value of industrial enterprises above designated size decreased by 5.6% year on year, which is also good news.

Third, the guiding role of leading enterprises has been significantly enhanced, and the development pace of small- and medium-sized enterprises (SMEs) that focus on specialization, refinement, uniqueness and innovation has been accelerated. We have incubated more than 40,000 enterprises that focus on specialization, refinement, uniqueness and innovation, over 4,700 "little giant" enterprises, and more than 800 single-product specialists in the manufacturing industry.

IV. New achievements have been made in the innovation and development of key areas, and new breakthroughs have been made in major technological innovations. The Tianwen-1 probe completed orbiting, landing and roving during an exploration mission to Mars, the Shenzhou-12 and Shenzhou-13 manned spaceships were successfully launched, and the Haidou-1 submersible broke many world records. The demonstration plant of the high-temperature gas-cooled reactor was connected to the grid for the first time to generate electricity, and research into new types of displays, machine tools, new materials and other fields has achieved phased results. All of these have strongly supported the development of the industrial economy. Industrial robots and solar cells increased by 44.9% and 42.1% year on year, respectively, and the production and sales of new energy vehicles increased by 1.6 times year on year.

V. New progress has been made in the high-quality development of the information and communications industry. The construction of new information infrastructure has been intensified. A total of more than 1.43 million 5G base stations have been set up and opened, and the number of 5G mobile phone terminal connections has reached 520 million. Full 5G coverage has been achieved across all venues for the 2022 Winter Olympics, providing strong support for the creation of an intelligent Winter Olympics. Spectators found that these measures greatly improved the viewing experience. 5G applications are also rapidly expanding in such fields as industry, energy and transportation, empowering thousands of industries. New formats and models have emerged one after another. The digital economy is showing a strong growth momentum. For the past year, the business revenue of the communications industry, and software and information technology services industry increased by 8% and 17.7%, respectively. All these provide the basis for us to stabilize the industrial economy throughout the year, and also lay a good foundation for this year.

While seeing achievements, we also clearly realize that there are still many problems. For example, the core competitiveness of the manufacturing industry is not strong enough, the quality of the supply system needs to be improved, and there are still many problems related to the security and stability of the industrial chain and supply chain. In particular, the current external environment is more complex, severe, and uncertain, and domestic development is also facing the triple pressure of demand decrease, supply shock, and weakening expectations. The difficulties and challenges faced by the development of industrialization and informatization have increased. We will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and deeply understand the decisive significance of the "Two Establishments," keep in mind "the Nation's Most Fundamental Interests," strengthen the "Four Awarenesses," adhere to the "Four Confidences," achieve the "Two Upholds," carry forward the great founding spirit of the CPC, conscientiously implement the spirit of the Central Economic Work Conference and the decisions and arrangements of the CPC Central Committee and the State Council, adhere to the general principle of seeking progress while maintaining stability, fully, accurately, and comprehensively implement the new concept for development, build a new development pattern, and promote high-quality development. We will uphold the supply-side structural reforms as the main task, coordinate the COVID-19 pandemic prevention and control as well as economic and social development, and coordinate the development and security, implement the tasks of "Six Stabilities" and "Six Guarantees," and put the stable growth of the industry in an important position, focus on boosting the industrial economy, and especially, go all-out to achieve a stable continuity in the first quarter and promote the smooth running of the industrial economy. We will focus on promoting innovations and breakthroughs in basic and key areas, further enhance the resilience of the industrial and supply chains, and focus on increasing relief assistance to SMEs, foster enterprises to become ones with high growth potential, advanced technology and strong market competitive edge, continue to stimulate the vitality of market players. We will focus on strengthening the construction and application of new information infrastructure and improve the supply capacity of information and communication services. We will focus on promoting the in-depth development of the digital transformation of the manufacturing industry, and enhance the new advantages and new dynamic of industrial development. We will focus on the implementation of work for carbon peaking and carbon neutrality, implement the carbon peaking action in the industrial field, and improve the level of green and low-carbon development of the industry. We will follow the requirements of "Three Stricts and Three Earnests," and do a solid job of implementing each work one by one, promote the smooth operation and quality upgrading of industrialization and informatization, keep the proportion of the manufacturing industry basically stable, and enhance the core competitiveness of the manufacturing industry and build a solid economic "ballast stone." We will welcome the successful convention of the 20th CPC National Congress with excellent achievements.

Above is my brief introduction, and then my colleagues and I will answer the questions from you.

Shou Xiaoli:

Thank you, Mr. Xiao, for your introduction. Let's move on to the question-and-answer session.

CCTV:

Mr. Xiao, you just mentioned in your introduction that you will try your best to achieve a stable continuity in the first quarter and promote the smooth running of the industrial economy, build a solid economic "ballast stone." What is the trend of China's industrial economy in the first two months of this year? Next, what measures will the MIIT take to achieve a good start in the first quarter and a smooth running of the industrial economy throughout the year?

Xiao Yaqing:

Thank you for your questions. In general, after efforts from various aspects, so far, China's industrial economy has continued the trend of a steady recovery in the fourth quarter of last year, and the overall operation is stable. Particularly with the implementation of various policies and measures for the growth of the industrial economy, phased results have been achieved in boosting the industrial economy. I don't have the statistics for February yet, but today is the last day of this month, so I would like to introduce the following aspects:

The first is the production during the Spring Festival and the resumption of work after the festival. Our questionnaire survey on more than 20,000 key industrial enterprises showed that 14.5% of enterprises didn't stop production during the Spring Festival, 89.5% of enterprises resumed work before the Lantern Festival, the 15th day of the first lunar month, and 95.5% of enterprises resumed work before Feb. 20. The second is the production and operation of enterprises in key industries in January. According to statistics from relevant associations, the production and sales of automobiles in January were 2.422 million and 2.531 million, respectively, up 1.4% and 0.9% year-on-year, respectively. Among them, the production and sales of new energy vehicles were 452,000 and 431,000, an increase of 1.3 times and 1.4 times, respectively. According to monitoring by the China National Coal Association, the average daily output of coal by key coal enterprises reached 7.44 million tons in January, a year-on-year increase of 1.8%. In January, the SMEs development index was 89.4%, up 0.2% month-on-month, and kept rebounding for three consecutive months. The third is about the situation of industrial-related indicators. The manufacturing PMI in January was 50.1%, which maintained above 50% for three consecutive months; the prosperity index of China's logistics industry was 51.1%, which also remained in the prosperity range; the scale of newly increased social financing and RMB loans both hit record highs and newly increased medium and long-term corporate loans showed a year-on-year increase for the first time since July last year.

Of course, we must also see that, affected by multiple factors, the current situation of the stable recovery of the industrial economy is not yet solid, and great efforts are still needed to promote the smooth operation of the industrial economy.

In the next step, first, we will make every effort to boost the industrial economy and ensure smooth continuity of the first quarter. We will conscientiously implement a series of policies and measures to promote the steady growth of the industrial economy, strengthen policy support, and promote the implementation of various policies and measures. At the same time, we must remain vigilant in identifying potential problems and solve them in a timely and coordinated manner.

Second, we will focus on breaking through the block on the supply of key products. And we will strengthen the guarantee and coordination of energy, logistics, labor, and other factors, give priority to ensuring the stable operation of key enterprises such as basic industrial products and important living materials, including agricultural materials and fertilizers.

Third, we will actively boost effective investment in manufacturing. We will ensure the implementation of major programs and projects in the 14th Five-Year Plan and start the implementation of a number of industrial infrastructure re-establishing projects. We will encourage and support enterprises to strengthen technological transformation, and promote telecom operators to accelerate the progress of investment and construction for 5G and gigabit optical networks.

Fourth, we will take concerted measures to expand consumer demand. We will continue to implement policies such as subsidies for the purchase of new energy vehicles, incentives and subsidies for charging facilities, and reduction and exemption of vehicle and vessel taxes. At the same time, we will carry out activities of bringing new energy vehicles, green smart home appliances, and green construction materials to the countryside. We will also further promote the action of increasing varieties, improving quality, and creating brands for products, and fully support foreign trade enterprises to expand exports. Thank you.

Science and Technology Daily:

Now more and more enterprises have realized the importance of digital transformation, and they are also accelerating the pace of digital transformation. We know that last year the MIIT focused on accelerating the digital transformation of China's manufacturing industry. I would like to know, as the industry's competent authority, how effective were the efforts in this regard? Secondly, what measures will the ministry take in the next step to support the digital transformation of enterprises? Thanks!

Tian Yulong:

Thanks for your question. As you said, the digital transformation is mainly about the popularization and application of the new generation of information technology, which will bring profound changes to production modes, development models, and enterprise forms in the manufacturing industry. It should be a compulsory course for enterprises to improve and develop their competitiveness. In recent years, thanks to joint efforts of the MIIT, relevant departments, and local governments, the digital transformation of China's manufacturing industry has seen accelerated development and good trends in innovation activities. It can be embodied in the following three aspects:

First, the foundation of the digital transformation has been consolidated. Through the implementation of the industrial internet innovation and development projects, more than 150 comparatively large-scale industrial internet platforms have been incubated, serving more than 1.6 million industrial enterprises, which provided strong support for digital transformation. Second, the scope of the digital transformation has been expanded. The new generation of information technology, including 5G, big data, cloud computing, and artificial intelligence, has accelerated integration and penetration with the manufacturing industry. Especially in industrial sectors like steel, automobiles, equipment, electronics, and petrochemicals, integrated and cross-industry innovations have been deepened. More than 2,000 "5G + Industrial Internet" projects are under construction across the country. Third, the degree of digital transformation has been enhanced. Just now, Mr. Xiao mentioned that the numerical control rate of key processes reached 55.3% among industrial enterprises above designated size, and the popularizing rate of digital R&D tools reached 74.7%. New forms and models of digital businesses also developed and innovated. The proportion of enterprises engaged in internet-based collaboration and service-oriented manufacturing reached 38.8% and 29.6%, respectively. Through internet-based and digital-driven transformation, enterprises not only improved their quality, efficiency, and effectiveness, but also gained benefits and improved their industrial competitiveness.

Next, we will continue our previous work and mainly focus on the following three aspects.

First, we will highlight key points and enhance enterprises' digital capabilities. Enterprises are the main body of digital transformation and reconstruction. At present, the digital capabilities of enterprises are generally not strong enough, which requires us to further promote and support them. We will summarize and promote a number of good technologies and practices, and issue relevant guidelines and guidance by industry and field. We will cultivate a group of high-quality system solution suppliers to provide practical and effective typical cases and methods for enterprises. Meanwhile, leading enterprises in the industry are supported to build digital empowerment platforms for the development of SMEs, and combine the optimization of industrial and supply chains, playing the role of digital transformation. By the end of this year, we will work with relevant parties to provide digital transformation services for at least 100,000 SMEs, and enable them to operate businesses on cloud platforms.

Second, we will expand applications and enrich product supply. We will continue to implement industrial internet innovation and development action plans, explore a number of typical application scenarios of "5G + Industrial Internet," and build a batch of fully 5G-connected factories. We will also accelerate the access of the industrial internet platforms to bases, industrial parks, and industrial clusters so as to connect various industries and empower enterprises and industrial parks.

Third, we will build and optimize the environment for digital transformation, which is a very important foundation for digital transformation. The standard system of transformation should be further improved. We will improve the talent training system for manufacturing transformation and further deepen the integration of industry and education and school-enterprise cooperation. At the same time, we will work with financial institutions to enrich financial products for digital transformation so as to further reduce the cost of enterprises' digital transformation. It is important to strengthen data security in digital transformation. We will actively foster the data factor market and support the establishment of data exchanges in Beijing and Shanghai. We will also strengthen industry data security supervision and formulate data catalogs to strengthen protection.

That's my answer. Thank you.

Cover News:

How do you see the outstanding performance of China's new energy vehicle industry over the last year? Will such achievements continue this year? Regarding this industry, what's China's focus for its development going forward?

Xiao Yaqing:

Thanks for your question. Mr. Xin will answer it.

Xin Guobin:

Thank you. China's new energy vehicle industry developed relatively fast during the 13th Five-Year Plan period (2016-2020). Its annual sales increased from 507,000 in 2016 to 1.367 million in 2020, with an average annual growth rate of 28%. Last year, the industry witnessed an outstanding performance. The number of its output and sales of vehicles both exceeded 3.5 million, reaching 3.545 million and 3.521 million, respectively, up 1.6 times year-on-year, ranking it first in the world for seven consecutive years, with a cumulative promotion volume of over 9 million units. Since the achievements of the new energy vehicle industry in 2021 have exceeded the predictions of some experts and institutions, the public must be concerned about whether it can maintain its encouraging development trend this year. Recently, we conducted a series of research and surveys, which showed that the development of new energy vehicle industry is in line with the direction of green and low-carbon development. It has led to the expansion of industry chains such as power batteries, electric motors, and electric controls; accelerated the application of new technologies, including intelligent cockpits, automatic driving, and intelligent networks; and promoted the transformation of logistics and transportation, which brought a new experience of green travel to consumers. The ecosystem of industrial development has been gradually improved. Judging from all aspects, China's new energy vehicle industry has entered a new stage of large-scale and rapid development. Although the development is still facing some difficulties and challenges, it is expected to maintain a high growth trend this year. Next, the MIIT will give full play to the inter-departmental joint meeting mechanism on energy saving and the new energy vehicle industry and focus on the following five aspects.

First, we will improve support policies. We will step up efforts to clarify support policies such as extending purchase tax exemptions for NEVs. We will improve the "dual-credit" policy and make it effectively dovetailed with the decline of subsidies for NEV purchases to stabilize market expectations. We will compile a roadmap for the green development of the automobile industry and provide guidance and assistance to industries and companies.

Second, we will support innovative breakthroughs. We will promote the integration of electrification and intelligent, connected technologies, improve the safety, low temperature adaptation and other performances of storage batteries, step up the technological application of 5G and the vehicle infrastructure cooperative system, and develop more functions such as leisure and entertainment, life services and autonomous driving to meet the needs of consumers. We will continue to improve the product quality and driving experience of NEVs to boost consumers' sense of gain.

Third, we will promote market expansion. We will launch the pilot project in some cities to completely electrify vehicles used in the public service sector, and step up the electrification of urban logistic vehicles, taxis and sanitation trucks. Focusing on the problem of charging in old residential areas and expressways which people urgently require solving, we will work with other departments to accelerate the construction of charging and battery swap stations and other infrastructure, and promote information sharing and unified settlement to continuously improve the convenience of charging NEVs. 

Fourth, we will strengthen the guarantee of resources. We will strive to meet the production requirements for storage batteries, moderately accelerate the development of domestic lithium resources, and crack down on unfair competition such as hoarding and price gouging. Meanwhile, we will improve the system of storage battery recycling, support high-efficiency dismantling, recycling and other technological breakthroughs to continuously improve the recycling rate and resource utilization efficiency.

Fifth, we will strengthen safety supervision. We have always emphasized that safety is the prerequisite for the development of the NEV industry and that it cannot develop without safety guarantee. Therefore, we should stick to the bottom line, and improve our capabilities to guarantee functional security, data security, and network security in a comprehensive way. We will continue to improve NEV safety and technical standards, and improve battery thermal runaway warnings and the level of safety protection. We will build a systematic, scientific and standardized NEV safety management system so that consumers can be more confident about using NEVs. Thank you.

Nikkei:

What measures has China taken in the past five years to improve the industrial chains for integrated circuits and semiconductors? How do you expect the level of China's self-sufficiency in semiconductors to improve by 2025? By approximately what percentage?

Tian Yulong:

Thank you for your questions. The integrated circuit industry has attracted global attention, and the CPC Central Committee and the State Council have attached great importance to it. In 2020, the State Council released policies on promoting the high-quality development of the integrated circuit and software industries in the new period, and put forward many important measures to develop the integrated circuit industry. The MIIT has worked with relevant departments and local governments to actively implement these policies. They have played an important role in the development of China's integrated circuit industry, especially in stabilizing the industrial and supply chains for integrated circuits. This can be seen in three aspects:

First, we have worked with other departments to release the first list of duty-free products for the integrated circuit industry and issued a circular about the conditions for companies to enjoy relevant policies. Domestic and foreign companies will enjoy the policies equally. Our purpose is to support integrated circuit companies of different ownerships to advance the development of the sector. 

Second, we have encouraged technological innovation. We have guided local governments to set up manufacturing innovation centers, improve their technology supply capacity, and speed up the transfer application and commercialization of new technologies, new processes and new equipment in particular. Meanwhile, we have set up relevant standards to promote the application and quality evaluation of integrated circuits, and further increased their application and promotion in automobiles, medical care, energy and other fields to drive the rapid development of the integrated circuit industry via applications and markets. 

Third, we have fostered a sound development environment for the integrated circuit industry. We have given full play to the role of capital in driving industrial development, and guided and encouraged social capital to invest in the integrated circuit industry. In particular, in accordance with various policy requirements, we have strengthened the protection of intellectual property rights and created a market-oriented, law-based and international business environment. The MIIT and the Ministry of Education have encouraged universities to establish the major of integrated circuits as a first-class discipline, build high-level microelectronics colleges, strengthen school-enterprise cooperation, and cultivate high-quality talents. 

The integrated circuit industry is an intelligence-intensive industry. In the future, integrated circuits will continue to be a highly globalized industry, which highlights the importance of strengthening cooperation in global industrial and supply chains. The industries of various countries should strengthen the division of labor and cooperation, so that integrated circuit technologies will continue to develop and the market will keep expanding.

China is the world's largest and fastest growing integrated circuit market, which provides broad market opportunities for the development of global enterprises. At the same time, we have been an important producer and supplier of integrated circuits, and have made continuous contributions to the global integrated circuit industry. Therefore, guaranteeing the stability of industrial and supply chains not only helps support China's self-sufficiency, but also provides resources for global development. We welcome the global integrated circuit industry to increase its investment in China, conduct various forms of cooperation, and jointly contribute to stabilizing industrial and supply chains for the global integrated circuit industry. We will continue to provide good policies and market environments for both domestic and international integrated circuit enterprises, treat all types of market entities equally, offer the same treatment for domestic and overseas investments, and especially enhance intellectual property protection. We will also jointly promote the innovation and development of the integrated circuit industry, and maintain the stability of industrial and supply chains for the global integrated circuit industry. Thank you.

Xiao Yaqing:

I would like to just add one point. As I said, the industry grew 33.3% last year, which represents relatively fast growth. This year, with the advance of industrial digitization and digital industrialization, and the 'increased demand for consumer electronics, we estimate that the industry will have relatively high growth rate among the 31 major manufacturing categories. Mr. Tian mentioned the issue of international industrial cooperation, which is very typical in this industry. We believe this is a major trend and should be adhered to. Thank you.

CNR:

SMEs have been significantly affected by the pandemic. We have noticed that a series of tax and fee reduction measures have been introduced at the national and local levels to ease their difficulties. With the support of these policies, what is the current situation of SMEs? What measures will the MIIT take to further support their development this year?

Xiao Yaqing:

Thank you for your questions. The CPC Central Committee and the State Council have always attached great importance to the development of SMEs, and have issued a series of policies and measures to help solve the difficulties faced by SMEs and stimulate their vitality. With the support of various polices, especially under the efforts made by SMEs themselves, the operating income and total profit of industrial SMEs above designated size increased last year by 19.9% and 25.6%, respectively, with average two-year growth rates of 9.9% and 16.8%. Both are higher than the levels of 2019 before the pandemic. The survey we conducted on 27,000 SMEs shows that the resumption of work after this year's Spring Festival was satisfactory. I reported on the status of the resumption of work before the Lantern Festival. At the same time, we are also aware that the economic situation at home and overseas has been severe and complex. The foundation for the development of SMEs has not yet been stabilized. In particular, disrupted by the sporadic resurgences of COVID-19, insufficient market demand, rising costs, difficulties in collecting accounts receivable, problems in recruiting workers and other issues have been quite prominent. In order to further help SMEs, we will take the following measures:

First, we will attach greater attention to implementing policies, and promote detailed implementation of policies that benefit enterprises. The central government has introduced many policies and measures to help SMEs. Since last year, 25 such policies have been promulgated at the national level, and 52 series of policy measures have been issued at the provincial level. We will strengthen overall coordination, increase policy publicity and interpretation, so that SMEs can have a better understanding of these policies, and the way to better use them. We will conduct third-party assessments into the development environment of SMEs, and jointly implement the policies of fiscal taxation, financial credit and guaranteeing stable prices, in order to ensure SMEs benefit from the policies.

Second, we will do more to provide enterprises with accurate services and help them solve problems. In response to the demands of SMEs, we will continue to provide them with accurate services in conjunction with relevant departments and regions. We will initiate a "Benefiting Enterprises Together" nationwide service action to provide public services to SMEs, and continue the SMEs Service Month campaign. We will also hold the China International SME Fair and the APEC SME Technology Exchange and Exhibition, and mobilize all sectors to serve SMEs well. We will take measures to clear arrears owed to SMEs, and protect the legitimate rights and interests of SMEs in accordance with the law. There are still many large enterprises and institutions that have defaulted on payments to SMEs, which is the focus of our rectification work this year. At the same time, we should work to ease difficulties and the high cost of financing. We need to guide financial institutions to increase support to micro, small, and medium enterprises (MSMEs), and encourage SMEs to increase the total amount of financing, expand the scope of benefits and lower financing costs. 

Third, we will encourage SMEs to focus on their specialisms in niche sectors, and support more SMEs to become suppliers of unique products and experts in complementary services. This year, there are plans to cultivate another 3,000 national-level specialized "little giant" firms, and encourage provinces to foster SMEs with specializations and to bring the number up to 50,000. According to the data, the total sales volume, profits and innovation capacity of the SMEs and "little giant" enterprises that specialize in niche sectors have significantly improved compared with ordinary ones. We will focus on supporting the development of such enterprises around the industrial chain, and better guide and encourage leading enterprises to support the development of SMEs. We will launch a campaign to promote integrated innovation among large, medium and small-sized enterprises. We will also encourage them to open up their innovative resources, including technologies, markets, standards and human resources in accordance with the market and the rule of law. Thank you.

21st Century Business Herald:

The latest data shows that the shortage of chips in the automobile industry has been eased. Has MIIT made assessments for the crunch situation this year? How will the automobile industry respond to this issue this year? What are the further plans for the chip industry?

Xin Guobin:

Thank you for your questions. Car chip has become a frequently discussed issue in our society since the outbreak of the COVID-19 pandemic. The MIIT has paid great attention to the work regarding chips, and researched with related sectors to address the issue. We set up a working group to expand and apply automotive semiconductors, and strengthened demand-supply links between car, components and chip enterprises; implemented measures in the circular to manage and facilitate services for enterprises, and promote substitute products' application; and coordinated with relevant departments to crack down on speculation and price pushing and other illegal activities, thus raising the supply capacity of chips and striving to maintain the smooth functioning of the automobile industry.

Through joint efforts, significant achievements have been made in car chip supply, with a favorable momentum emerging in monthly production and sales since the fourth quarter of last year. In 2021, 26.082 million and 26.275 million cars were produced and sold, with a year-on-year increase of 3.4% and 3.8%, respectively, ending a period of continuing reduction for three consecutive years, which was a hard-earned outcome. In January 2022, 2.422 million and 2.531 million cars were produced and sold, up 1.4% and 0.9% year-on-year, respectively. It's fair to say that the automobile industry has gotten off to a stable start this year.

Regarding the monitoring data of key car enterprises, there still exists certain chip shortages considering the demands and production plans of both car and components enterprises, although chip crunch is mitigating. Major chip enterprises worldwide have strengthened their production and supply of automotive-grade chips and will gradually release new production capacity this year. In addition, the domestic supply capacity of certain types of chip products are increasing. Therefore, chip supply's favorable momentum is expected to continue. 

Next, we will take a slew of measures to maintain the steady operation of the automobile industry, with the focus being as follows:

First, we will strengthen the demand-supply connections. We will create online link platforms for car chips based on our past efforts, provide information channels for chip production and supply, and improve the upstream and downstream cooperation mechanism of the industrial chain.

Second, we will intensify coordination efforts. We will guide car and components enterprises to improve their supply chain, make rational production plans, support each other, improve the efficiency of resource allocation, and minimize the impact of the chip crunch. Allocation efficiency is quite important. Some enterprises' products are sold fast, so the chip crunch will have a big impact on them, but some enterprises' products are not recognized by consumers, so even if they get chips, people won't buy their products, and this will result in a mismatch of resources in the industry.

Third, we will boost the capacity of chip supply. We will further support coordination and innovation among car, components and chip enterprises, so as to improve domestic chip production and supply capacity in a prudent and orderly manner. Presently, our application testing and assessment system is not sound, so we will make further efforts to remedy the deficiencies.

Fourth, we will advance international cooperation. As the automobile industry is a highly internationalized industry, we must carry out globalized development, stimulate transnational chip enterprises to increase supply to the Chinese market, intensify the distribution of domestic production capacity, and strengthen the resilience and stability of the industrial and supply chains.

Mr. Tian Yulong has just introduced the planning of the whole chip industry, and I will add some points regarding your questions.

The CPC Central Committee and the State Council issued the Measures on High-quality Development of Integrated Circuits and Software Industries in a New Era. Next, we will focus on implementing the policy. We will promote the free flow of production factors and resources, create a fair and just market environment, intensify intellectual property rights protection, and deepen international coordination, thus further improving the high-quality development of the industry. Thank you!

Hong Kong Economic Herald:

It's very nice to see you again, Mr. Xiao. The last time I interviewed you was in 2019, when ministers took questions from the media during the "two sessions." My question this year is about advanced manufacturing. Feb. 26 marks the eighth anniversary of General Secretary Xi Jinping's proposal on the coordinated development of the Beijing-Tianjin-Hebei region. What's the MIIT's take on narrowing down the gap between north and south China in developing advanced manufacturing, especially supporting Tianjin to further build itself into an R&D center for advanced manufacturing? Thank you.

Xiao Yaqing:

The manufacturing gap between the north and south is your personal opinion. China has a full-fledged industrial system. Industries classified into 41 divisions, 207 groups, and 666 classes are well allocated across China. China is the only country in the world to obtain all the divisions of industrial classification. The complete industrial system has made significant contributions to the growth of the national economy and meeting people's everyday needs.

With the development of the market economy, there are some regional differences due to the varied rates of growth and marketization. This is a common phenomenon of development. The CPC Central Committee and the State Council have introduced many measures to advance coordinated regional development. The implementation of these measures provides key guiding principles and fundamental support for the sustainable and sound development, and more effort should be made in the implementation process. 

In the meantime, we also need to know that, as a business environment that is based on market principles, governed by law, and up to international standards gradually takes shape in China, more opportunities have been offered to more enterprises, especially those with industrial foundation and advantages. As China continues to deepen reform, the leading enterprises in different industries and advantageous enterprises will emerge with renewed vitality and provide sound support to the development of these industries and enhance their core competitiveness.

We believe that, with the further implementation of the 14th Five-Year Plan and China's regional development strategies, practitioners of China's industrial sector will keep striving to improve, and the sector will see new and more promising prospects. Thank you.

People's Posts and Telecommunications News:

Over the years, mobile internet users have paid more and more attention to user experience. What efforts did the MIIT make in 2021 to protect users' rights and interests and improve relevant services? What new measures will be taken this year? Thank you.

Xiao Yaqing:

Thank you for your questions. With the rapid development of the mobile internet, people find it increasingly difficult to live and work without cellphones and mobile internet. In 2021, we played our part in the nationwide campaign which aims to bring tangible benefits to the public and worked to improve all aspects that affect user experience. We continuously enhanced the quality of services, strengthened personal information protection, and earnestly protected users' rights and interests. We mainly solved problems concerning the management of mobile apps and the senior-friendly transformation of apps and websites. In terms of mobile app management, many problems were reported. By taking a set of measures such as formulating standard testing techniques, launching special regulatory campaigns, and the self-regulation of industries, we managed to crack down on apps violating regulations regarding collecting and using personal information, as well as pop-ups and other behaviors that violate users' rights and interests. We all found it very difficult to close out pop-ups. In 2021, we tested 2.08 million mobile apps. A total of 1,549 regulation-violating apps were notified and the 514 apps that refused to make corrections were removed from app stores. After rectification, these apps will provide better services for users. In terms of elderly-friendly transformation, a total of 227 websites and apps have completed transformation and introduced functions such as font enhancer, voice guidance, and one-click customer service connection, to name a few. We also provide guidance for digital product companies and let them support the design and production of elderly-friendly digital products.

Of course, our work in this regard will not stop here, and we will continue making efforts this year.

First, we will focus on users' rights and interests and strengthen comprehensive management. We will continuously pay attention to various violations reported by users and carry out further regulatory work on mobile apps. We will implement all-around supervision on various aspects concerning mobile internet services. Our supervision work will mainly cover three fields. These include various end products such as cellphones and tablets, key participants along the accountability chain such as app stores, third-party software development kits and pre-installed apps, and the technical test of mobile apps. By doing so, we aim to comprehensively safeguard users' rights and interests.

Second, we will focus on services and meet users' expectations. We will work to enhance the capacity of personal information protection and urge major internet companies to set up customer helplines and respond to customers' requests.

Third, we will focus on key groups of users and promote the inclusiveness of information services. We will organize more mobile apps and websites and carry out elderly-friendly and barrier-free transformation and improvement, and work to introduce a group of model projects accordingly.

Fourth, we will focus on developing long-term mechanisms and form synergy among our work. Centering on key aspects such as mobile internet services and personal information protection, we will further improve both incentive and accountability mechanisms, strengthen technical methods, and encourage companies to improve their services and other capacities. Thank you.

Yicai:

Ranking first among new types of infrastructure facility, 5G is an important method to stabilize investment and economic growth. What are the MIIT's plans this year concerning the construction and application of 5G? Thank you.

Tian Yulong:

Thank you for your question. Since the commercial use of 5G technology officially kicked off, it has, as you mentioned, played a crucial and leading role in promoting new infrastructure. Due to the joint efforts of the MIIT, other government bodies, local governments, and the industrial sector, China's 5G construction and application remains world-leading. Currently, the 5G network has covered all prefecture-level cities, the urban area of all counties, as well as 87% of seats of townships and towns. The 5G coverage in China is definitely world-leading. This has played a vital role in stabilizing economic growth and investment.

This year is a critical year for the scale development of 5G applications. According to the overall plans of the Central Committee of the Communist Party of China (CPC) and the State Council, we will mainly continue our efforts for the integrated development of the network, applications, and the industry.

First, we will make solid progress in the development of the 5G network. Our goal is to build more than 600,000 5G base stations this year. As Mr. Xiao just mentioned, we now have over 1.42 million 5G base stations, so we can bring the total number to 2 million by the end of this year. We will constantly expand the scale of infrastructure building, , optimize the layout of infrastructure based on the needs, and cover more key areas such as factories of companies and industrial parks with the network. At the same time, we will improve the penetration of the network into high-speed trains, transportation hubs, shopping centers, and other densely-populated areas, and continue expanding its coverage in counties, towns, and townships.

Second, we will vigorously promote the innovative development of 5G applications. We will further implement the action plan for 5G applications dubbed "Raising the Sail," which is a key element of our effort. We will successfully hold the 5G application competition dubbed "Bloom Cup" to explore more new achievements and technologies and promote their wide application and commercialization. At the same time, guided by the needs of the industry, we will further develop demonstrative application scenarios for 5G plus industrial internet, pilot 5G plus medical and health care, and 5G plus smart education, and continue to deepen and expand our efforts in agriculture, culture, and tourism. We will launch a number of new smart terminals and apps for individual users to further improve their 5G experience.

Third, we will vigorously upgrade 5G technologies. We will intensify research and development (R&D) on key chips and core components, support relevant sectors to actively participate in formulating international standards, and aligning with them. At the same time, we will continue R&D and experiments on 5G enhancement and boost their capacity for integrating with other industrial verticals. We will increase the variety of 5G application products and motivate companies to work out more modular products of different levels and prices so as to meet the needs of different industries, different areas, and the general public for differentiated, customized, and personalized 5G products, and boost the rapid development of 5G technologies through scaled applications.

That is all I have to say. Thank you.

Bauhinia Magazine:

The industrial sector is an important sector for the goals of peaking carbon emissions and achieving carbon neutrality. Regarding this matter, what is the consideration of the ministry? And what specific measures will you take this year to make steady progress in green and low-carbon industrial transformation? Thank you.

Xiao Yaqing:

Thank you for your questions. To peak carbon emissions and achieve carbon neutrality is a major strategic decision made by the CPC Central Committee in consideration of both domestic and international dynamics. It will be a broad and profound transformation, and it is an inherent requirement and an inevitable choice for high-quality development. Energy consumption in the industrial sector accounts for about 65% of China's total energy consumption, and it is one of the major areas of energy conservation and carbon reduction efforts. We have a tight schedule to accomplish this arduous task. It is a major challenge as well as a major opportunity. Green and low-carbon industrial development will certainly bring new growth space, new innovation impetus, and new development opportunities to the industrial economy. There are many things we can do and many areas we can explore in green and low-carbon development. We will conscientiously implement the decisions and plans of the CPC Central Committee and the State Council, bear in mind the country's most fundamental interests, and adhere to a holistic view in order to handle well the relationships between development and emission reduction, the whole and the parts, long-term goals and short-term goals, and government and the market. We will make overall considerations to keep the proportion of manufacturing basically stable, ensure the security of industry chains and supply chains, and meet reasonable consumption needs. We will rationally break down goals and tasks to promote green and low-carbon industrial transformation in a steady and orderly manner.

Our work will cover the following aspects.

First, we will strengthen the top-level design of policies. We will implement the Action Plan for Carbon Dioxide Peaking Before 2030 issued by the State Council, actively take actions for peaking carbon emissions of the industrial sector, and release action plans for the industrial sector and key industries. With a focus on industries like iron and steel, building materials, petroleum chemistry, chemical industry, and nonferrous metal, we will formulate a series of categorized and targeted policies based on industry characteristics and development conditions to push for peaking carbon emissions in the industrial sector in a steady, sound, scientific and orderly manner.

Second, we will make in-depth adjustments to the industrial mix in an orderly way. We will pursue new development before ruling out the obsolete: we will deepen supply-side structural reform in key industries and build an industrial structure conducive to reducing carbon emissions; we will strictly implement production capacity swap policies in industries like iron and steel, cement, plate glass, and electrolytic aluminum; and resolutely restrict the haphazard development of projects that are energy intensive and have high emissions and low levels of production. In particular, we will strictly control the scale of energy use in key industries such as iron and steel.

Third, we will implement green and low-carbon transformation in the manufacturing sector. We will release a directory to guide key industries in green and low-carbon upgrading and transformation, and promote the innovation of low-carbon techniques and the digital transformation in key industries and sectors. We will push for sound implementation of the plan for the comprehensive utilization of industrial resources, and strengthen energy conservation monitoring and supervision and energy conservation diagnosis. We will speed up the cultivation of green data centers, give play to their demonstrative and leading role, and build public service platforms for key industries concerning peaking carbon emissions.

Fourth, we will build a supply system for green and low-carbon products. We will improve the green manufacturing system, improve the green design of products, and cultivate a number of demonstrative companies in green design. We will increase the supply of photovoltaic equipment, fans, and energy-saving motors, carry out special actions to pursue the innovative development of the smart photovoltaic industry, and improve the industry chain for wind power equipment. We will revise and improve the system for parallel administration of auto companies' fuel consumption and new energy vehicle credits. As Mr. Xin briefed just now, we will step up efforts to popularize new energy vehicles, vigorously develop green smart ships, promote the certification of green building materials products, and make moves to get rural areas access to green building materials. By increasing the supply of green and low-carbon products, we will help sectors like energy, transportation, and urban and rural development peak carbon emissions.

It is a very important task, and we need to push forward it step by step for notable outcomes. Thank you.

Shou Xiaoli:

Thank you, Mr. Xiao, for your introduction. Thank you to all the speakers and media friends. That concludes today's press conference. See you next time.

Translated and edited by Zhang Rui, Liu Qiang, Lin Liyao, Zhou Jing, Wang Mengru, Wang Wei, Yan Xiaoqing, Li Huiru, Zhang Tingting, Chen Xia, Zhu Bochen, Liu Sitong, Zhang Jiaqi, Ma Yujia, David Ball and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.