It is expected that the growth rate of the added value of industries above designated size will remain at around 6.2% in 2018; industrial production operations will still maintain a steady and positive situation in 2019, and it is expected that the number of industries above designated size will increase Value growth will remain in the 6.0%-6.3% range.

The new features also put forward higher requirements for doing a good job in 2019.

1. The trend of steady progress in industrial production continues. The stability of the basic market and the positive progress in structural adjustment are the "ballast stones" to ensure the smooth operation of the current economy.

Judging from the growth rate of industrial production, the added value of industries above designated size nationwide increased by 6.3% year-on-year from January to November 2018. Judging from the historical data of industrial growth in the past five years, maintaining a growth rate of around 6% is a significant feature, which is sufficient This shows that China’s industrial growth is highly resilient. From a structural perspective, positive factors are constantly accumulating. In the first three quarters of 2018, high-tech industries accounted for 13.4% of the added value of industries above designated size, an increase of 0.2 percentage points from January to August; strategic emerging industries accounted for 18.5%, an increase of 0.1 percentage points from January to August. percentage point. Judging from the investment situation, industrial investment increased by 5.4% year-on-year in the first three quarters of 2018, of which manufacturing investment increased by 8.7%, and the growth rate was 1.2 percentage points higher than that from January to August. From the perspective of exports, the growth rate of industrial exports is basically in line with market expectations. In the first three quarters, the export delivery value of industrial enterprises above designated size reached 8,972.9 billion yuan, a year-on-year increase of 8.1%. In September, the export delivery value increased by 11.7%. In terms of profits, industrial profits generally maintained rapid growth in the first three quarters, and positive progress was made in reducing the costs of real economy enterprises.

In November 2018, there were slight fluctuations in industrial data. The added value of industries above designated size actually increased by 5.4% year-on-year, and the growth rate dropped 0.5 percentage points from October. The slowdown in industrial growth in November was related to the slowdown in the growth of the automobile, chemical and electronics industries. Monthly data fluctuations are related to commodity price fluctuations, the impact of product consumption policy adjustments, and sluggish downstream demand. We should pay close attention to short-term data fluctuations, but we must also maintain strategic focus to avoid short-term fluctuations affecting our grasp and judgment of long-term trends. .

2. There are four "changes" in industrial production that are stable, which are of great reference value for a comprehensive and accurate understanding of the current industrial production situation.

The situation that industrial production is stable but has changes should arouse great concern. Attention, in summary, there are four "changes", which have important reference value for a comprehensive and accurate understanding of the current industrial production situation.

First, the international policy game environment faced by our country is undergoing some changes. The adjustment of the economic policies of major countries may have a certain impact on the global economic operation, and it also has a certain "reverse force" on the formulation of economic policies by other countries. "effect. For example, U.S. multinational companies repatriated a large amount of retained earnings of overseas subsidiaries to the United States after the tax reform, resulting in a 41% drop in global foreign direct investment in the first half of 2018. At the same time, many have transformed the original "giving preferential policies to specific industries" into "giving preferential policies to specific regions." In addition, the U.S. government proposed the "Opportunity Zone Fund Project" in the "Tax Cuts and Jobs Act" to guide investors to inject capital into low-income communities through tax incentives. In addition, the Indian government stipulates that companies investing in specific local areas can enjoy corporate income tax exemptions for a certain period of time.

Second, our understanding of our own industrialization is also changing. There are still some "stuck" problems in the industrial field, which shows that our country is still far from achieving a high level of industrialization, and the task of rebuilding and reshaping the basis of industrialization is even more urgent.

Third, the importance that countries attach to emerging industrial fields and advanced technologies arising from the intersection of disciplines is changing. Improving the core competitiveness of the manufacturing industry has become an important strategy for the United States, the United Kingdom, Germany and Japan, and the relevant governments have specially introduced relevant bills to support it.

From the 2012 "Blueprint for Revitalizing the U.S. Manufacturing Industry" to the 2016 "Artificial Intelligence Research and Development Strategic Plan", from the "Industry 4.0" strategy proposed by the German government in 2013 to the artificial intelligence of the "Learning System" launched by the German Federal Ministry of Education and Research Intelligent platforms, these consistent policies show that countries are paying more and more attention to key and innovative technologies that are related to improving the core competitiveness of the manufacturing industry.

Fourth, the impact of global economy and trade on some industries is also changing. In our research, we found that the impact of trade is still mainly limited to some specific products, but as time goes by, the impact on some industrial chains has begun to appear. For example, some multinational manufacturers are postponing further investments locally and considering relocating some or all of their manufacturing activities elsewhere. Once this potential risk turns into a real problem, it will have a certain negative impact on suppliers and manufacturers in different links of the industrial chain.

Industrial production faces some problems that need to be solved urgently

At present, there are still some problems in the field of industrial production in our country. Some of these problems are short-term in nature, and some reflect some medium and long-term developments. trend.

1. Short-term exports are still facing greater downward pressure

Currently, due to factors such as export front-running, the adverse impact of trade on my country’s exports has not yet been reflected in the current data. superior. However, judging from changes in some leading indicators, short-term exports are still facing greater downward pressure. For example, the PMI new export orders index has been below 50% for five consecutive months. The new export orders index in October 2018 was 46.9%, down 1.1 percentage points from the previous month.

2. The problem of weak demand still exists

First, the PMI new orders index in October 2018 was 50.8%, down 1.2 percentage points from the previous month; second, manufacturing The amount of effective investment in the industry continues to decline, and the growth rate of fixed asset investment in the manufacturing industry after deducting price factors is negative, highlighting the problem of insufficient effective investment; third, the year-on-year increase in the price of downstream terminal daily necessities is much lower than the increase in the market price of front-end raw materials , highlighting the problem of insufficient demand in the terminal consumption field of the manufacturing industry.

3. The industrial added value rate is low

The proportion of my country’s manufacturing added value to GDP ranks first in the world, but in terms of the manufacturing value added rate, data from the Chinese Academy of Engineering show , the manufacturing value added rate has been on a downward trend since 2002, and was 21.48% in 2014. Not only is there a very large gap with developed countries such as the United States (37.67%), Japan (36.07%), and Germany (38.76%), it even lags behind developing countries such as India and Brazil.

4. Weak independent innovation capabilities

There are few products with independent intellectual property rights, high dependence on external core technologies, and high-end equipment, core parts and components needed for industrial development. Most of the devices and key materials rely on imports. For example, the deficit in intellectual property royalties exceeds US$20 billion, of which intellectual property royalties paid to the United States increased by 14% year-on-year.

5. The development of producer services lags behind

First, the overall level of development of producer services is not high. Data show that the value-added rate of my country's producer services industry in 2014 was approximately 53.8%, which was significantly lower than the 60% level in developed countries. Second, the degree of marketization of the producer service industry is low and it is difficult to form effective supply. Third, the development of OEM manufacturing has not only failed to create effective demand for producer services, but has instead competed with the service industry in terms of factor acquisition.

Industrial production will still operate stably within a reasonable range

1. The growth rate of industrial added value above designated size will maintain steady growth in 2018

We believe that in 2018 The growth rate of industrial added value above designated size will remain at around 6.3%, and will remain at around 6% in 2019. This inference is mainly based on the following three reasons.

First, based on historical data, the prediction results using various regression models are basically around 6%-6.4%. Under the current market expectations and macroeconomic fundamentals, the added value of industries above designated size will not see major fluctuations in 2018, and the growth rate will basically remain at around 6.3%.

Second, from the perspective of supply and demand, we judge that the situation of better supply than demand will not change in the next 1-2 years. The contrast between supply and demand directly determines that prices, profits and other indicators will not decline in the short term. A change in trend reversal occurs. Therefore, the growth rate of industrial added value in 2019 will remain stable and is expected to be in the range of 6%-6.3%.

Third, from the perspective of policy reserves, we still have many policy tools to stabilize employment, finance, foreign trade, foreign investment, investment, and expectations, which are very important for maintaining the smooth operation of industry. Strong supporting effect.

Fourth, industry itself has the function of self-stabilization. The ebb and flow of growth rates in different categories and the accelerated cultivation of new momentum mean that this stability will not change in the short term.

2. Pay attention to the potential impact that four factors may have on my country’s industrial production operations

First, developed countries attach great importance to the design of ideas related to the development of manufacturing. The United States, Germany, Japan and the United Kingdom have also elevated manufacturing development to a strategy, kept pace with the times, and formulated relevant top-level designs. In October 2018, the U.S. Science and Technology Council released the "U.S. Leadership Strategy for Advanced Manufacturing", emphasizing that the development of innovative and profitable domestic manufacturing with flexible supply chains is a top priority and is crucial to economic prosperity and security. The UK is positioning itself for the development of the manufacturing industry in 2050. By analyzing the problems and challenges faced by the manufacturing industry, it puts forward important conclusions such as technology changing production, and technologies such as information and communication technology and new materials will play a key role in the future integration with products and production networks. In June 2018, Japan's Ministry of Economy, Trade and Industry released the "White Paper on Japan's Manufacturing Industry", proposing to obtain new added value through the flexible use of digital technology.

Second, the consolidation and reconstruction of the value chain is the key for developed countries to control the strategic commanding heights. Among them, "consolidation" is reflected in attaching great importance to the development of producer services. The producer services industry is the center of the global value chain and has become a breakthrough in today's international competition and industrial upgrading. Developed countries occupy value by firmly grasping the advantages of the producer services industry. The high end of the chain. The specific approach is to establish a promotion agency for the development of producer services. For example, relevant Japanese government agencies have established a special research group on the service industry to coordinate and solve major issues in the development of the service industry. In addition, "restructuring" is mainly reflected in the redistribution of global production by multinational companies. Multinational companies have gradually shifted from the "center-periphery" offshore production layout centered on the home country market to the near-shore production layout centered on the host country market, and this layout is moving to the periphery of my country.

Third, “step-by-step gradient promotion” and “multi-level parallel promotion” of industrial transfer coexist. Traditional international industrial transfer often moves from developed countries with a higher economic gradient to underdeveloped countries with a lower economic gradient. The transfer trajectory basically follows the "developed-developing" trend. After the international financial crisis in 2008, some new characteristics emerged: First, in addition to maintaining the original step-by-step gradient characteristics, developed countries intentionally attracted high-end manufacturing links attached to overseas through policy guidance to return home. For example, the French government will invest 200 million euros to provide prepayment repayment subsidies to companies that intend to return to invest in France to encourage companies to return and promote domestic employment. Second, the factor cost comparative advantages among developing countries are constantly changing. Industries that originally went to some developing countries will be withdrawn and then flowed to other developing countries.

Fourth, global trade rules are in the process of restructuring. The reconstruction of global trade and investment order and rules may have a certain substitution effect on domestic trade and investment, or increase certain pressure on my country's foreign trade and attract international direct investment. For example, the Trans-Pacific Free Trade Area (TPP), the world's largest free trade area, has high thresholds in terms of service trade, intellectual property rights, labor and environmental protection, which may weaken the cost advantage of my country's industrial export products.

Promote steady industrial growth

Focus on eight aspects of work

The key to achieving high-quality development of my country's industrial production is to be self-reliant and actively respond to the international economic situation changes and strive to build a modern industrial system with global competitiveness.

1. Plan the top-level design of a strong industrial base

In accordance with the requirements of building a modern industrial system with coordinated development of the real economy, technological innovation, modern finance, and human resources, make overall plans to promote industrial high-tech development. Quality development, top-level design that fundamentally solves some "stuck neck" problems. We will further make up for the shortcomings in factors and strongly support the high-quality development of industry. Strengthen the connection between supply and demand of education and employment, strengthen vocational education and the training of professional and technical talents, and strongly encourage enterprises to adopt methods such as school-enterprise cooperation and apprenticeships to cultivate the talents that enterprises need in a targeted manner. Strengthen the coordination of financial policies and industrial policies, and encourage financial institutions to launch financial products and services that meet the innovative development of the real economy. Completely remove institutional obstacles that restrict the transformation of scientific and technological achievements, and accelerate the resolution of "pain points" and "blocking points" that affect the functioning of the innovation incentive system. It is necessary to provide institutional guarantees for the formation of an innovation culture that tolerates failure and tolerates losses.

2. Properly respond to global trade

It is recommended that provinces with a high proportion of foreign trade exports select 2-3 prefecture-level cities as observation points to timely grasp and track the impact of trade on employment, exports and Impact on the industrial chain. Strive to make breakthroughs in a number of key core technologies and products as soon as possible, use key breakthroughs to improve the overall competitiveness of the manufacturing industry, and firmly grasp the development initiative. Further adjust industrial policies and treat all market entities equally in accordance with the principle of competitive neutrality.

3. Effectively carry out the construction of major projects

It is very important to expand domestic demand and strengthen the implementation of special plans. Most of the special plans clearly define the project layout, and the construction of major projects within the plan should be regarded as an important task of current investment management work. Innovate the organizational management methods of major project construction, proactively coordinate, proactively promote and proactively provide services to ensure the implementation of projects. Further strengthen responsibility constraints, eliminate arbitrariness in project construction, and increase the seriousness of planning.

4. Accelerate the disposal of "zombie companies"

It is recommended to clarify the quantitative standards for determining "zombie companies" as soon as possible, and speed up the disposal process in accordance with market-oriented principles and supplemented by necessary administrative means. Make the disposal of "zombie enterprises" an important part of supervision and assessment. Establish special funds for the disposal of "zombie enterprises" and focus on employee resettlement and re-employment.

5. Effectively stabilize the expectations of market entities

Stabilize expectations by continuing to reduce corporate costs and explore the feasibility of continuing to reduce the value-added tax rate in the manufacturing industry. By promoting a number of major reform measures to boost market confidence, we must continue to relax market access for the manufacturing industry and accelerate the implementation of policies. It is necessary to introduce a number of immediate-impact measures focusing on six aspects: reducing the tax burden on enterprises, solving the problem of difficult and expensive financing for private enterprises, creating a fair competition environment, improving policy implementation methods, building a pro-clear new government-business relationship, and protecting the personal and property safety of entrepreneurs. policy measures.

6. Improve the evaluation and incentive mechanism for scientific and technological personnel

Promote the distribution of scientific research results, equity incentives, property rights disposal, etc. in favor of outstanding talents, so that scientific and technological personnel can receive reasonable returns for their intellectual work. Grant scientific and technological personnel greater autonomy in scientific research, control of human, financial and material resources, and decision-making power on technical routes. Support scientific and technological personnel within the system to stay on the job without pay to start their own businesses, support scientific and technological personnel with appropriate part-time and part-time pay in accordance with laws and regulations, and ensure the implementation of relevant policies.

7. Accelerate the development of the producer service industry

Promote the extension of the producer service industry to the high end of the value chain, focus on weak links to accelerate development, aim at improving international standards, and vigorously develop industrial design, etc. industry and deepen the application of information technology in producer service industries.

8. Strengthen interim and ex-post supervision

Deepen the reform of the commercial system, promptly formulate and publish a catalog of pre-approval items for market management, and ensure that there is no approval outside the catalog. Strictly implement environmental protection, safety, energy consumption and other standards, severely punish trademark, patent and other intellectual property infringements, severely crack down on the production and sale of counterfeit goods, and strengthen the identification and verification, information collection, information disclosure and joint punishment of untrustworthy enterprises. Strengthen the legal construction of supervision during and after the event, promote the allocation of human, financial, material and other resources to the grassroots, and strengthen the construction of grassroots law enforcement capabilities.

(Source of article: Shanghai Securities News)