In the first quarter, the high-end manufacturing industry grew rapidly, and industrial production slowed down.

In the first quarter, industrial production slowed down and stabilized

â–  The slowdown in the growth of traditional industries and the expansion of high-tech manufacturing industries

â–  The marginal productivity of industrial capital is low, and investment returns are still low

â–  The competitiveness of Chinese manufacturing must be transformed from cost advantage to technological innovation and brand influence

The data released by the National Bureau of Statistics on April 15 showed that in the first quarter, the value added of high-tech and equipment manufacturing increased by 9.2% and 7.5% respectively, which was 3.4 and 1.7 percentage points faster than the industry above designated size respectively. The growth rate of high-tech industry and equipment manufacturing industry is higher than the overall growth rate of the industry, which also continues the characteristics of industrial development last year. How to treat the industrial situation in the first quarter? Has the industrial transformation and upgrading entered the "fast track"?

1, look at the trend: industrial production in the stabilization phase

In March, the value-added of industrial enterprises above designated size increased by 6.8% year-on-year, 1.4 percentage points higher than that in January-February. In the month-on-month comparison, the industrial added value above the designated size in March rose by 0.64% from the previous month.

"Industrial production has stabilized and stabilized." - This is the setting for the industrial economy when the National Bureau of Statistics releases the first quarter economic data.

The so-called slow, that is, the growth rate of 5.8% in the first quarter is indeed unhappy, and even lower than the 6.1% growth rate of industrial added value above the scale of the previous year. The so-called stabilizing means that the growth rate increased from 5.4% in January-February to 6.8% in March, accelerating by 1.4 percentage points, electricity consumption increased by nearly 6 percentage points, and the total social freight volume increased by nearly 4 percentage points.

The growth rate data can only prove the past, and the confidence of the enterprise represents the future.

In March, the manufacturing PMI was 50.2%, which was a 1.2% increase from the previous month. “This is the first time since August last year that it has returned to the line of positive and negative, and some positive changes have begun to appear.” Zhao Qinghe, senior statistician of the Service Survey Center of the National Bureau of Statistics said that after the Spring Festival, enterprises started to concentrate and the supply-side structural reforms have accelerated in the near future. Advancing, manufacturing production and markets have picked up. At the same time, the demand for manufacturing import and export markets has picked up and returned to expansion.

In addition, a number of data in March showed an "inflection point":

- The production index was 52.3%, up 2.1 percentage points from the previous month; the new orders index was 51.4%, up 2.8 percentage points from the previous month and rising above the critical point.

- The new export order index was 50.2%, up 2.8 percentage points from the previous month, and it was the first time since October 2014 that it rose above the critical point.

- The import index was 50.1%, an increase of 4.3 percentage points from the previous month, the highest since December 2013.

According to the “China's Industrial Economy Annual Report 2015-2016” released by the Institute of Industrial Economics of the Chinese Academy of Social Sciences, China’s industrial economic situation in 2016 is still complex and severe, and the downward pressure remains high, but at the same time it is also at an important strategic opportunity. "Striving for progress in stability" remains the main theme of industrial development. It is expected that the growth rate of the industrial economy in 2016 may show a trend of “low before and after high”, and the growth rate of above-scale industrial added value will be around 5% to 6%.

2. Look at structure: rapid growth of high-end manufacturing

In the first quarter, the added value of high-tech and equipment manufacturing increased by 9.2% and 7.5% year-on-year, respectively, and the growth rate was 3.4 and 1.7 percentage points faster than that of the above-scale industries, respectively, and accounted for 12.1% and 32.4% of the added value of industries above designated size respectively. This represents an increase of 1.1 and 1.7 percentage points over the same period of the previous year.

The growth rate of high-tech industry and equipment manufacturing industry is higher than the overall growth rate of the industry, which also continues the characteristics of industrial development last year. In 2015, the added value of high-tech manufacturing increased by 10.2%, accounting for 11.8% of the added value of industries above designated size. The value-added of equipment manufacturing industry increased by 6.8%, accounting for 31.8% of the industrial added value above designated size. Last year, the growth rate of all industrial added value was only 5.9%, and the growth rate of industrial added value above designated size was 6.1%.

"At present, China's factor input structure gradually shifts from being labor-intensive and capital-intensive to being capital- and technology-intensive." Huang Qunhui, director of the Institute of Industrial Economics at the Chinese Academy of Social Sciences, believes that this is mainly reflected in the three Aspects: First, the slowdown in the growth of traditional industries, high-tech manufacturing, high-end equipment manufacturing, consumer goods manufacturing, etc. are in an expanding state. Second, the share of fixed assets investment in raw materials and high-energy-consuming industries showed a downward trend, and the proportion of investment in mechanical and electronic industries and high-tech manufacturing industries continued to rise. Third, the import of resource-based products increased significantly. Exports of electromechanical and high-tech products showed a significant increase in exports. The export delivery value of advanced manufacturing industry accounted for more than 60% of the total industrial export delivery value. “Made in China” gradually "Chinese quality" changes.

However, the rapid growth of middle and high-end manufacturing industries cannot hide the enormous pressure of traditional manufacturing. For some time, as China’s labor, land, financing, environmental protection and other production costs have continued to rise, developed markets in Europe, the United States, and Japan have implemented the strategy of re-industrialization, and some developing countries have also accelerated the transfer of international industries. China’s traditional manufacturing The industry was double squeezed.

From a regional perspective, the value added in the eastern region in March increased by 7.3% year-on-year, in the central region by 7.8%, in the western region by 8.0%, and in the northeast by 0.2%. The differences in regional industrial growth are mainly determined by the industrial structure. In the northeast region, petroleum, coal, and steel are the pillar industries. The traditional industries are weak in growth and difficult to transform, and new industries are underdeveloped.

In 2015, the added value of the service industry accounted for 50.5% of GDP and exceeded 50% for the first time. The proportion of added value of the secondary industry was reduced to 40.5%. This is usually considered a major feature of structural adjustment. However, in view of many economists, it is of course valuable to increase the proportion of the service industry. However, in the process of shrinking the proportion of the manufacturing industry, there can be no view that the industrial economy is obsolete. Instead, it must pay more attention to the upgrading of the manufacturing industry.

3, look at the efficiency: greater marginal productivity fluctuations

In the first two months of this year, China's industrial enterprises above designated size realized a total profit of 780.7 billion yuan, an increase of 4.8%, which changed the decline in industrial profits in 2015.

In the industrial sector, the mining industry lost 8.14 billion yuan in the first two months, the electricity, heat, gas and water production and supply industries realized a total profit of 84.86 billion yuan, an increase of 2%, while the manufacturing industry realized a total profit of 703.99 billion yuan, a year-on-year increase. Up to 12.9%.

He Ping, Director of the Industrial Efficiency Division of the National Bureau of Statistics’s Industrial Division, said that apart from the petrochemical industry that benefited from the earlier adjustment of lower oil prices and refined oil pricing mechanism, it is worth noting that the profit growth of electrical machinery and equipment manufacturing has accelerated. In January-February, due to product upgrades and the rapid development of intelligent products, the profitability of some enterprises increased, and the profit of electrical machinery and equipment manufacturing increased by 25% year-on-year.

"It should be pointed out that although the profits of industrial enterprises in January and February showed a certain growth, they are related to the lower base value in the same period of last year." He Ping said that the difficulties faced by industrial enterprises in production and operations are still many, and the pressure on enterprises' inventory is still high. Receivables continue to rise. Inventories and accounts receivable are relatively high, increasing the operating costs of funds and affecting the production and operation of enterprises.

A report of the CCID Research Institute of the Ministry of Industry and Information Technology believes that the marginal productivity of industrial capital fluctuates more than the marginal productivity of the entire social capital. Since the large-scale expansion of investment plans in 2009, the investment rate has remained at high levels for many years, while the marginal productivity of industrial capital has remained low and investment returns have been low. The contradiction between higher investment rate and lower investment efficiency has caused many problems.

Lu Tie, a researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, stated that during the “Thirteenth Five-Year Plan” period, it is necessary to highlight the awareness of innovation and growth, actively build a new growth engine for the industrial economy, and fundamentally improve the ability of technological innovation. Under the condition that China's industrial system has been highly complete, the dynamic efficiency will be used to make up for the structural configuration efficiency and enhance the negative impact of space decline. We will vigorously nurture high-tech and high-growth industries that are compatible with new technology trends and market demands, form new industrial growth drivers, support small and medium-sized enterprises and start-up companies, and strengthen the foundation for industrial growth by expanding the middle-class enterprise groups.

4. Look at development: Urgently shape the influence of international brands

In the “2016 Global Manufacturing Competitiveness Index” recently released by Deloitte, China, like 2010 and 2013, was again listed as the most competitive manufacturing country in 2016. However, due to the economic slowdown and rising costs, coupled with the re-industrialization strategy of developed economies, this study believes that by 2020, China will be surpassed by the United States and slip to second place.

Recent data on the use of foreign capital shows that the proportion of manufacturing industries that use foreign capital in China has continued to decline. In the first quarter, the actual use of foreign investment in manufacturing industry was 68.06 billion yuan, a year-on-year decrease of 1.6%.

However, according to analysts, the proportion of total foreign investment in manufacturing in China has fallen, but the proportion of high-end manufacturing has risen significantly; labor-intensive production lines have largely shifted, but corporate headquarters and R&D centers have increased significantly. In contrast, foreign investment in traditional manufacturing industries such as steel, cement, and shipbuilding is basically zero. All these are consistent with the direction of transformation and upgrading of domestic manufacturing.

From the perspective of China’s foreign investment, international capacity cooperation is in good shape. In the first quarter, the manufacturing industry flowed to 5.4 billion U.S. dollars, an increase of 125.9%, and the investment in the equipment manufacturing industry was 2.65 billion U.S. dollars, an increase of 176% year-on-year. The just-initiated but extremely rapid growth is an objective judgment of how China's manufacturing capital will go out.

Traditionally, the competitiveness of Chinese manufacturing lies in its cost advantage and complete industrial system. However, in the future, this kind of competitiveness must be transformed into technological innovation and international brand influence. Among the 2015 “World Fortune 500”, there are 106 Chinese finalists, among which there are 56 manufacturing companies. In the “World Top 500 Global Brands” 2015 released by the World Brand Lab, there are only 31 Chinese brands, of which only 7 are manufacturing brands. Comparing the two lists, it fully shows that China's manufacturing companies are large enough, but they are not strong enough, especially the lack of world-class manufacturing brands.

On April 6, the “Standardization and Quality Improvement Plan for Equipment Manufacturing Industry” reviewed and passed by the State Council Standing Committee proposed that by 2020, the conversion rate of international standards in key areas will strive to reach over 90% and the quality of key equipment will reach or approach the international advanced level.

Tian Shihong, director of the National Standards Commission, said in an interpretation of the plan that the future will center around a new generation of information technology, high-end CNC machine tools and robots, aerospace equipment, marine engineering equipment and high-tech ships, advanced rail transit equipment, energy-saving and new energy vehicles, Ten key areas, such as power equipment, agricultural machinery and equipment, new materials, and high-performance medical equipment, have raised the requirements for standardization and quality improvement, and promoted China's equipment, technology, products, and services to go global, and build China's "golden brand".

In the first quarter, industrial production slowed down and stabilized