Continuous Improvement of Industrial Strength, with Remarkable Achievements in Transformation and Upgrading

Continuous Improvement of Industrial Strength, with Remarkable Achievements in Transformation and Upgrading

—Series Report III on the Economic and Social Development Achievements since the 18th CPC National Congress

Source: National Bureau of Statistics 

Published on: September 15, 2022 Characters: 4203

Industry is the lifeblood of the national economy, and the development of industry continues to promote social progress and the improvement of human living standards. Since the 18th CPC National Congress, the CPC Central Committee headed by Comrade Xi Jinping has attached great importance to the real economy and issued a series of major decision-making strategies to promote the stable and healthy development of the industrial economy. China has entered a road of higher-quality and more sustainable development in industry, and it shows the characteristics of stable production growth, structural optimization and transformation, and vigorous development of diversified economic types with significant improvement in quality and efficiency.

I. Steady Growth of Industrial Economy, with Significant Improvement in Comprehensive Strength

Since the 18th CPC National Congress, in the face of profound changes in the world economic pattern and a complex environment, China's industrial sector has conscientiously implemented the decisions and plans of the CPC Central Committee and the State Council, flexibly adjusted development strategies, actively adapted to the changes unseen in the past century, and calmly responded to the impact of the pandemic. China's industrial economy has maintained rapid growth, the scale of the total volume has continued to expand, and the quality and efficiency has steadily improved.

(I) Rapid growth of the industrial economy, with strong support of the stable development of the national economy

Since the 18th CPC National Congress, China's industrial economy has maintained rapid growth and provided strong support for the steady growth of the national economy. From 2013 to 2021, the AAGR of China's industrial added value reached 6.1%, far higher than the growth of other major economies in the world. In 2021, China's industrial added value increased by 9.6% over the previous year, driving the total economic growth by 3.1 percentage points, and contributing 38.1% to the growth of gross domestic product (GDP). It served as an important support for the stable operation of the national economy.

(II) The continuous development of the industrial economy and the rapid development of the manufacturing capability in China

Since the 18th CPC National Congress, the total added value of China's industry has continued to rise, serving as an important engine driving the growth of the global manufacturing industry. The output of major industrial products has grown rapidly. The number of industrial enterprises above designated size has exceeded 400,000, and the overall industrial strength of the nation has reached a new level.

As the industrial economy continues to grow, the scale of the manufacturing industry of China ranks first in the world. In 2012, China's total industrial added value exceeded RMB 20 trillion for the first time, in 2018 it exceeded RMB 30 trillion, and in 2021 it reached RMB 37.3 trillion, accounting for 32.6% of GDP. According to the statistics of World Bank, in 2010, the added value of China's manufacturing industry surpassed that of the United States for the first time, and it has been ranked first in the world in a row. In 2020, the added value of China's manufacturing industry accounted for 28.5% of the world's total, an increase of 6.2 percentage points compared with 2012, and its driving role in global industrial economic growth was further strengthened.

The output of major industrial products achieved rapid growth. In 2021, China's integrated circuit output reached 359.4 billion, an increase of 361.0% over 2012; ethylene output reached 28.26 million tons, an increase of 90.1%; natural gas 207.6 billion cubic meters, an increase of 87.7%; air conditioners 220 million units, an increase of 76.1%; chemical fiber 67.09 million tons, an increase of 74.8%; power generation 8.5 trillion kWh, an increase of 71.1%; ten non-ferrous metals 64.77 million tons, an increase of 62.3%; crude steel 1.04 billion tons, an increase of 43.0%; LCD TVs 170 million, and increase of 52.6%; microcomputers 470 million, an increase of 46.8%; mobile phones 1.66 billion, an increase of 40.6%; automobiles 26.53 million, an increase of 37.6%.

(III) A steadily improvement achieved in the profitability of industrial enterprises and a strong resilience shown by the industrial economy

Since the 18th CPC National Congress, in the face of a series of pressures such as the sluggish recovery of world economy, the constraints of anti-globalization, and the impact of the COVID-19 pandemic, under the strong leadership of the CPC Central Committee, China's industrial economy has withstood major tests, and the supply-side structural reform has achieved remarkable results. The economic benefits of enterprises have been steadily improving, the industrial economy's strength against impacts has been continuously enhanced, and its resilience of development has been fully demonstrated.

The economic benefits of industrial enterprises have steadily improved. With the gradual implementation and consolidation of a series of measures such as "cutting excess capacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness" and the strategy of building a world manufacturing power, the market supply and demand have reached a balance at a higher level with increase of the profit margins of industrial enterprises and the continuous improvement of enterprises performance. In 2021, industrial enterprises above designated size nationwide achieved operating income of RMB 128 trillion, an increase of 37.7% over 2012, with an AAGR of 3.6%; the total profits reached RMB 8.7 trillion, an increase of 40.7% over 2012, with an AAGR of 3.9%. In 2021, the cost per RMB 100 of operating income of industrial enterprises above designated size was RMB 83.74, a decrease of RMB 0.68 from 2012.

The strength of the industrial economy against impact is highlighted. At the beginning of 2020, the COVID-19 pandemic swept the world and hit the world economy hard. The CPC Central Committee has always adhered to the priority of the people and their life, and coordinated the pandemic prevention & control and economic & social development. China's industrial economy took the lead in recovering from the pandemic with promising developing momentum.  In 2021, the operating income of industrial enterprises above designated size across the country increased by 18.0% over the previous year, with an average increase of 9.5% in two years, 8.5 percentage points higher than in 2019; the total profit achieved in 2021 increased by 27.2% over the previous year, with an average increase of 15.0% in two years, turning from a decline in profits in 2019 to a sharp increase; the profit margin of operating income reached 6.81%, an increase of 0.49 percentage points over the previous year.

II. Continuous Optimization of the Industrial Structure, with Constant Change in the Development Model

Since the 18th CPC National Congress, the CPC Central Committee has attached great importance to technological innovation and industrial upgrading. Under the guidance of the new development philosophy, the industrial field has accelerated technological transformation and improved the application of science and technology. The profit structure of enterprises has improved with significant increase in high-end manufacturing and rapid growth in emerging products. As the independent controllability of the industrial chain and supply chain improves significantly, and the quality of China's industrial economic growth has been further improved.

(I) Optimization and upgrading of the production structure, with rapid growth of high-end manufacturing

Since the 18th CPC National Congress, the equipment manufacturing and high-tech manufacturing industry has maintained rapid development. From 2013 to 2021, the added value of equipment manufacturing and high-tech manufacturing respectively grew by an average of 9.2% and 11.6% annually, 2.4 and 4.8 percentage points higher than that of industries above designated size respectively. Among them, the AAGR of the aerospace vehicle and equipment manufacturing industry reached 13.7%, the AAGR of the electronic and communication equipment manufacturing industry reached 13.6%, the AAGR of the pharmaceutical manufacturing industry reached 11.7%, and the AAGR of the medical equipment and instrumentation manufacturing industry reached 10.9%. In 2021, the added value of equipment manufacturing and high-tech manufacturing respectively accounted for 32.4% and 15.1% of the added value of industries above designated size, up 4.2 and 5.7 percentage points from 2012, respectively.

(II) The improvement of the profit structure of enterprises to demonstrate the advantages of high-end manufacturing

Since the 18th CPC National Congress, while the profitability of industrial enterprises keeps improving, the profit growth structure has been further optimized. In 2021, the profits realized by the equipment manufacturing industry accounted for 32.1% of the total profits realized by all industrial enterprises above designated size, an increase of 1.2 percentage points from 2012; the profits realized by the high-tech manufacturing industry accounted for 20.8%, an increase of 10.7 percentage points from 2012. In 2021, the total profit of the equipment manufacturing industry above designated reached RMB 2.8 trillion, an increase of 46.1% over 2012, with an AAGR of 4.3%, and a growth rate of 0.4 percentage points higher than the overall level of industries above designated size; the total profit of high-tech manufacturing reached RMB 1.8 trillion, an increase of 1.9 times over 2012, with an AAGR of 12.6% and a growth rate 8.7 percentage points higher than the overall level of industries above designated size. Among them, the pharmaceutical manufacturing industry, computer communication and other electronic equipment manufacturing industries achieved an AAGR of 14.4% and 11.2% respectively.

(III) A rapid increase in emerging products, with broad innovation-driven prospects

In recent years, with the continuous improvement of industrialization and informatization, emerging industrial products have grown rapidly. At present, the industrial Internet and intelligent manufacturing have entered substantive application, and the digital transformation of enterprises in automated production, online operation and maintenance has achieved remarkable results. In 2021, the output of industrial robots reached 366,000, an increase of 67.9% over the previous year. Technological innovation drives the rapid growth of emerging products. In 2021, the output of optoelectronic devices reached 1.2 trillion pieces, an increase of 24.1% over the previous year; solar cells reached 230 million kilowatts, an increase of 42.1%. Residential consumption upgrades have brought broad markets and bright prospects for emerging products. In 2021, the output of new energy vehicles reached 3.68 million, an increase of 145.6% over the previous year; the output of service robots reached 9.21 million, an increase of 48.9%; the output of smart watches reached 66.87 million, an increase of 37.0%.

(IV) The further improvement of the industrial chain and the constant enhancement of independent and controllable capabilities

Since the 18th CPC National Congress, the CPC Central Committee has attached great importance to overall development and security, and has responded to external changes and potential risk impacts through continuous adjustment and improvement of the industrial chain. China has become the only country in the world with a complete manufacturing industry chain. As the independent controllability of the industrial chain and supply chain keeps improving, it provides reliable support for creating a new development pattern by the taking the domestic market as the mainstay while letting domestic and foreign markets reinforce each other. The localization rate of the manufacturing industry has increased, and the overall supply chain of the industrial chain is independently controllable. The self-sufficiency rate of the industrial chain is relatively high, and it has a global leading edge in terminal products in fields such as power transmission and transformation, rail transit equipment, construction machinery, and household appliances.

III. Vigorous Development of Different Economic Types, with Display of Market Entities' Vitality

Since the 18th CPC National Congress, the CPC Central Committee and the State Council have formulated and implemented a series of macro policies to ensure the common development of various ownership systems. The reform of state-owned enterprises has achieved remarkable results. The state-owned enterprises have become stronger, better and bigger and the business environment has continued to improve. The private economy has demonstrated great vitality, foreign investment and foreign trade have maintained growth, policies to support small and micro enterprises and self-employed households have been proven effective, and small and medium-sized enterprises have grown rapidly.

(I) The reform of state-owned enterprises for quality improvement and efficiency enhancement, and their continuous role as state-owned economic pillars

Since the 18th CPC National Congress, under the guidance of a series of principles and policies to promote the reform of state-owned enterprises, the results of quality improvement and efficiency enhancement of state-owned enterprises have gradually manifested. The profitability of state-owned holding industrial enterprises has increased, the value of state-owned assets has been maintained and increased, and state-owned enterprises have concentrated in important industries to continue to play the role of state-owned economic pillars.

The profitability of state-owned holding industrial enterprises has increased significantly. In 2021, the state-owned holding industrial enterprises above designated size realized a total profit of RMB 2.3 trillion, an increase of 50.0% over 2012, with an AAGR of 4.6%, and a growth rate of 0.7 percentage points higher than the overall level of all industrial enterprises above designated size. In 2021, the operating income profit margin of state-owned holding industrial enterprises above designated size reached 6.9%, which is higher than the overall level of all industrial enterprises above designated size and 0.7 percentage points higher than that in 2012.

The net assets of state-owned enterprises have grown steadily. Especially since the implementation of the three-year reform of state-owned enterprises, the net assets have continued to increase. By the end of 2021, the net assets of state-owned holding industrial enterprises above designated size reached RMB 22.2 trillion, an increase of 84.0% over 2012 and an AAGR of 7.0%.

In key fields and important industries related to the national economy and people's livelihood and public services, the state-owned economy maintains a dominant position. In 2021, state-owned holding industrial enterprises above designated size accounted for 75.3% of the total assets of the coal mining and washing industry, an increase of 5.2 percentage points from 2012; they respectively accounted for 70.2% and 57.1% of the ferrous and non-ferrous metal mining and dressing industries, an increase of 21.7 and 13.4 percentage points respectively; they accounted for 81.2% in water production and supply, an increase of 0.4 percentage points. In industries such as furniture manufacturing, paper making, and chemicals, state-owned enterprises have withdrawn in an orderly manner, and their proportion of total assets has slightly decreased compared with 2012.

(II) The development of the private economy to promote the market vitality

Since the 18th CPC National Congress, the CPC Central Committee has always adhered to the major policy of making efforts to unswervingly consolidate and develop the public sector and unswervingly encourage, support, and guide the development of the non-public sector. It has continuously optimized the business environment through the implementation of a series of policies such as tax cuts and fee reductions, and supported small and micro enterprises and self-employed households in targeted manner. The private economy has grown in scale, their profitability keeps improving, they have strengthened their job creation capacity, and small and medium-sized enterprises have grown rapidly.

The private economy has grown stronger, and its ability to make profits and provide employment has been significantly enhanced. From 2013 to 2021, the added value of private industrial enterprises above designated size grew at an average annual rate of 8.0%, which is 1.2 percentage points higher than the overall level of all industrial enterprises above designated size. In 2021, private industrial enterprises above designated size realized a total profit of RMB 2.9 trillion, an increase of 44.4% over 2012, with an AAGR of 4.2% and a growth rate of 0.3 percentage points higher than the overall level of all industrial enterprises above designated size.  In 2021, private industrial enterprises above designated size employed 35.82 million people, an increase of 14.7% over 2012, and the number of employees accounted for 48.1% of industries above designated size.

With the continuous expansion of the beneficial policies to support small and medium-sized enterprises, the profitability of small and medium-sized enterprises has increased, and the number of small and medium-sized enterprises has increased significantly as well. In 2021, small and medium-sized industrial enterprises above designated size realized a total profit of RMB 4.7 trillion, an increase of 26.7% over 2012 with an AAGR of 2.7%. In 2021, the number of industrial small and medium-sized enterprises above designated size reached 401,000, accounting for 98.1% of the total number of industrial enterprises above designated size, an increase of 0.8 percentage points over 2012.

(III) A continuous increase in foreign investment and foreign trade, with further market integration and expansion

Since the 18th CPC National Congress, the CPC Central Committee has continued reform and opening up by expanding opening up fields and deepening the extent. China has attracted rich foreign investment with its solid material foundation, rich human resources, huge development potential and broad market prospect. The foreign-funded industrial economy continues to grow, and the "Belt and Road" Initiative promotes the further integration of foreign trade markets. China's export of industrial products has kept growing, and its structure has been gradually optimized, further boosting China's opening up.

In 2021, the total profits of industrial enterprises invested by foreign investors and investors from Hong Kong, Macao and Taiwan above designated size reached RMB 2.3 trillion, an increase of 63.6% over 2012, with an AAGR of 5.6% and a growth rate 1.7 percentage points higher than the overall level of all industrial enterprises above designated size. In 2021, the total assets of industrial enterprises above designated size of foreign investment and investment from Hong Kong, Macao and Taiwan reached RMB 28.8 trillion, an increase of 67.2% over 2012; the operating income reached RMB 28.8 trillion, an increase of 29.8% over 2012.

The export of industrial products keeps growing, and the structure was gradually optimized. In 2021, the export delivery value of China's industries above designated size reached RMB 14.5 trillion, an increase of 36.1% over 2012, with an AAGR of 3.5%; among them, the export delivery value of high-tech manufacturing industry increased by 63.7% compared with 2012, with an AAGR of 5.6%. In 2021, the high-tech manufacturing industry accounted for 51.5% of the export delivery value of industrial enterprises above designated size, an increase of 8.7 percentage points over 2012. Since 2013, the proportion of mechanical and electrical products in total exports has remained above 55%, and reached 59.0% in 2021, an increase of 1.4 percentage points from 2012.

Since the 18th CPC National Congress, under the strong leadership of the CPC Central Committee, the industrial field has overcome challenges with continuously reform and optimization, kept growing and developing, and made important contributions to the stable operation of the national economy. To start a new journey of building a modern socialist country in an all-round way, the industrial economy must continue to implement the new development philosophy in a complete, targeted and comprehensive manner, focus on improving scientific and technological innovation, further improve the quality of development, continue to promote the building of a world manufacturing power, and lay a solid foundation for the realization of the Second Centenary Goal.