New industries offer bright prospects for Chinese economy

2015-12-16 09:38Xinhua Editor: Gu Liping

As the Chinese government accelerates its implementation of a series of reform and innovation measures aimed at economic restructuring, the Chinese economy is gradually on track of robust growth, with the emergence of new industries countering the downward pressure and offering bright prospects.

Newly released data from China's National Bureau of Statistics show that in November 2015, the added value of China's high-tech industry has grown by 10.3 percent year-on-year, a pace leading that of the industries above designated size by 4.1 percentage points.

Meanwhile, the actual use of foreign capital in the high-tech service industry and the manufacturing sector has increased by 51.7 percent and 11.7 percent year-on-year respectively.

In its latest report entitled "The 'new China' economic investment under 'new normal,'" the American investment bank Goldman Sachs elaborated on its preference of the "emerging China" over the "traditional China," of which the former is represented by enterprises covering 30 areas, including science and technology, e-commerce and education, among others.

A group of 20 "emerging China" stocks tracked by Goldman Sachs has realized 23 percent of earnings during the first half of 2015, whereas for the most preferable stocks under the "traditional China" concept, the growth of earnings in the same period was just 2 percent, said Kinger Lau, chief China strategist at Goldman Sachs.

The French multinational bank BNP Paribas said in an in-depth analysis of the Chinese economy that online shopping revenues in the country are increasing at an annual rate of more than 50 percent, and cinema box office revenues at a rate of more that 40 percent.

"There isn't huge evidence of a crisis in China," Simon Roberts, head of global equities at BNP Paribas Investment Partners, was quoted by the Financial Times as saying.

Shen Ya, president and chief executive officer of Chinese e-commerce company Vipshop, thinks that with the structural upgrade of China's domestic consumption, the future development of e-commerce in China will be more open and diverse.

With the favorable environment created by the Chinese government, more and more e-commerce companies have entered global markets, opened up global supply chains and realized a two-way capital flow, becoming international competitors thanks to the development of a new industry known as "Internet Plus."

The Financial Times wrote in a Dec. 9 article that "old economy focus 'understates'Chinese growth."

Acknowledging that part of China's industrial sector suffers from severe overcapacity and is contracting, the article quoted Michael Hasenstab, manager of Franklin Templeton Global Bond fund, as saying that that sector is only part of China's economy, and that the service sector has been expanding rapidly, fuelling wage growth and supporting consumption.

Guo Shengxiang, dean of the Australian think tank Academy of APEC Creative Finance, told Xinhua that if one only considers the past, one cannot get a full picture of the Chinese economy.

Instead, he argued, one should acknowledge the new initiatives to boost the economy, such as "Internet Plus," "China Manufacturing 2025," as well as the government's call for popular entrepreneurship and innovation, which Guo said will inject impetus into China's new economy.

China's new economy has cheered up Zhao Wei, president and chief executive officer of Xi'an Polymer Light Technology Corp., whose business covers new material, high-end manufacturing, logistics network and big data.

Zhao told Xinhua that the knowledge-intensive industry is now on the rise, which makes venture capital investors chase after his company for investment, as opposed to the past, where it was the other way round.

Moreover, the "new" and "old" cannot be completely separated in the Chinese economy. Like Chinese Premier Li Keqiang wrote in an article published in the Economist magazine on Nov. 2, "Structural reform is not only about exploring new sources of growth, but also about making traditional industries more competitive."

The rejuvenation of traditional industries brought about by the overhaul of the economic structure has been felt by Ouyang Chao, vice-general manager of China Construction Steel Structure Corp. Ltd.

Ouyang told Xinhua that his company has completed several green building projects, and that new technologies have created new demands and new values, vastly expanding the development space for the enterprise.


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