Ministry of Industry and Information: China's industrial economy faces five major problems

Xin Guobin, director of the Office of Supervision and Coordination of the Ministry of Industry and Information Technology, said on the 7th at the press conference for the Summer 2010 report on industrial economic operations that currently China's industrial economy is facing five major challenges.

First, the foundation for global economic recovery is still fragile and export pressure has increased. At present, the unemployment rate in Europe and the United States is still in the high 9% to 10% range. The level of deficits in major countries is extremely high, leading governments to tighten fiscal spending and reduce overall social demand. The European sovereign debt crisis has increased the uncertainty of the recovery of the world economy. At the same time, the trend of international trade protectionism has intensified. In the first half of the year, there were 38 international trade remedy measures against China, including 7 cases in the EU, involving an amount of US$4.6 billion.

The second is the slowdown in investment growth, and the long-term mechanism for investment in technological transformation of enterprises needs to be established. At present, the pattern of technological reforms that the Central Government attaches great importance to, local support, enterprises welcome, and social concerns has taken shape, but long-term mechanisms need to be established.

Third, the elimination of backward production capacity and the suppression of redundant construction tasks are arduous, and structural adjustment faces greater difficulties. The repeated construction of some traditional industries such as steel, cement, coal chemical industry, and flat glass has caused serious vicious competition. The issue of excess production capacity is outstanding, and backward production capacity still occupies a considerable proportion. Wind power equipment, polysilicon and other emerging industries also have signs of blind construction.

Fourth, the task of saving energy and reducing consumption is heavy, time is tight, and the pressure to complete the target is increased. Since the third quarter of 2009, with the gradual recovery of China's economy, the high energy-consuming and high-emission industries have grown rapidly, making the unit value-added energy consumption rise instead of fall.

Fifth, the external environment facing enterprise development is complex and changeable, which has increased the difficulty of production and operation of the company. The rapid rise in energy and raw material prices, high volatility, and increased pressure to increase labor costs, increased the pressure for SMEs to respond to financing difficulties, and increased concerns about instability in the export environment. In addition, major droughts occurred in southern provinces in spring this year, and floods and mudslides occurred in summer, affecting the normal production and operation of enterprises.