Beijing to keep driving industry revival, post-COVID-19
Source: Mysteel
Apr 01, 2020 13:30
Addressing media on March 30, Xin noted that China’s manufacturing enterprises are steadily resuming work and are “progressing positively” after the country’s coronavirus epidemic was partially contained entering March. By March 28, the average operating rate of sizeable industrial enterprises around China had reached 98.6% and that for small- to medium-sized enterprises was 76%, Xin said.
In Hubei, the epicentre of the pandemic, the operating rate of industrial enterprises has reached 95%, and around 70% of employees had returned to work as of Monday, according to him.
By the end of March, over 90% of employees in all steel and electronics industries were back at work, and 70-90% of employees in the textile, auto, machinery and light manufacturing industries were back with their enterprises, according to Xin.
However, constraints for industries re-opening remain, including the free movement of people and goods around the country, the uncoordinated resumption of enterprises at differing points along industrial supply chains, and higher pressure on company operations (while the battle to control the COVID-19 spread continues), Xin remarked.
Internationally, human resources, logistics, and financing have been clogged and disrupted, global industrial and commodity supply chains are witnessing greater volatility, national economies and populations are being destabilized, and systematic risks to wider society are beginning to emerge, he added.
Operations in the automobile manufacturing sector, a pillar industry of China’s economy with a long supply chain, have generally recovered to the level seen in the same period last year, with run-rates at assembly plants increasing from 60% on February 19 to 97% at present.
In the meantime, MIIT has helped 15 key automobile enterprises to solve their problems of spare and accessory parts supplies, and all the 1,300 vender enterprises serving these automobile makers in the industrial chain located in 26 provinces or cities have resumed operations by now.
However, the weak automobile consumption remains a challenge for the industry, according to Xin, who said MIIT has cooperated with related ministries to work out measures to accelerate automobile consumption. Some provinces including South China’s Guangdong and East China’s Shandong have introduced preferential policies to prompt sales, and MIIT intends to adjust policies for new energy vehicles to balance the development of the auto industry generally.
Although data for March showed that the pandemic is gradually slowing in China, the situation is deteriorating unexpectedly overseas, Xin commented, saying that the slide in global and domestic demand has seriously impacted China’s export-oriented enterprises.
To solve the problem, MIIT will cooperate with industry associations and E-commerce platforms to promote online consumption. MIIT is also reviewing the feasibility of holding online exhibitions and purchasing meetings to help enterprises to increase orders, he said.
Besides, other ministries overseeing other parts of the economy are viewing preferential policies or other supportive measures to help enterprises to survive, he added.
The coronavirus has markedly impacted China’s industry and markets. In this year’s first two months, industrial added value among the sizeable industrial enterprises declined 13.5% on year, these enterprises’ profits had slumped 38.3% on year, and 36.4% of them had been running at a loss, Xin said, citing official data. Among the 41 industrial sectors, 30 posted double-digit declines in their added value over January-February, and among the enterprises, medium- and small-sized enterprises and labour-intensive firms had been hit hardest.
Regarding external trade, China’s import and export value over January-February declined 9.6% on year to reach Yuan 4.1 trillion ($0.6 trillion), among which the value of exports plunged 15.9% to Yuan 2 trillion, according to China’s General Administration of Customs.
Written by Sean Xie, xiepy@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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