Business / Economy

Premier urges new drive to spur growth

By XING ZHIGANG/CHEN JIA (China Dail) Updated: 2015-10-16 07:31

Premier Li Keqiang has called for intensified efforts and stronger support to turn the manufacturing sector into a new driving force for economic growth.

The appeal came as he warned against the fallout from sluggish industrial growth in the world's second-largest economy.

"We should really have a sense of urgency ... as it is the outstanding problem for us to address at present, "Li told dozens of ministers from central government departments and eight provincial-level heads.

He acknowledged that lack-luster and poor performances in some sectors, including traditional industries, have added to downward pressure on the economy.

The premier delivered his warning on Tuesday at a seminar on the country's economic situation and as the National Bureau of Statistics prepared to release the growth rate for the third quarter.

China's gross domestic product grew by 7 percent in the first half of the year, in line with the full-year target, but it was the weakest growth since 2009.

Fears have been mounting over a sharper slowdown, sparked by a series of economic indicators including weak exports and imports, a property downturn and industrial overcapacity.

The International Monetary Fund expects China's economic growth to slow to 6.8 percent this year and 6.3 percent next year.

In the first eight months of the year, the profits of large industrial firms fell by 1.9 percent year-on-year, with those of State-owned enterprises diving by 24.7 percent.

Most of the eight mayors and governors at the seminar voiced fears over the industrial slump, citing problems such as weak market demand, reduced fixed-asset investment and rising labor costs.

The provincial chiefs called for more support from the central government such as a lower lending rate, electricity price cuts and more financial backing.

The premier stressed that the "Internet-Plus" initiative should be used well to help upgrade and transform traditional industry and sharpen the manufacturing sector's competitive edge.

The "Internet Plus" initiative was proposed in July to encourage the integration of the Internet into traditional sectors.

Central government departments should also introduce financial measures to support the manufacturing sector, Li said.

Sheng Laiyun, a senior economist at the National Bureau of Statistics, said weak domestic and external demand for industrial products, coupled with long-term declines in commodity prices, have reduced industrial profits significantly this year.

"The risk of deflation is increasing in the manufacturing sector, so it still faces great downward pressure and needs to further reduce inventory and capacity," Sheng said.

Huang Qunhui, head of the Institute of Industrial Economics at the Chinese Academy of Social Sciences, a top government think tank, suggested the manufacturing sector's growth target could be lowered as long as it was still within a reasonable range.

"A more important task is to increase the quality of industrial production, and this year will be key to promoting the transformation," he said.

"The expected result is that emerging strategic industries such as new energy and biotechnology will play a significant role in supporting the manufacturing industries," Huang said.

Learn from overseas, domestic firms told

Domestic manufacturers should learn from their overseas counterparts to produce more products that are popular among Chinese customers, according to Premier Li Keqiang.

Chinese companies should catch up to help promote a consumption upgrade and further stimulate economic growth, he said.

Li was speaking after media reports said pharmaceutical products topped shopping lists as Chinese tourists flocked to Japan over the National Day golden week holiday at the start of this month.

In contrast, the most popular items during the May Day holiday for these visitors were electric heated toilet seats and rice cookers.

There had been few predictions that Chinese visitors would sweep through Japanese stores to buy goods such as medicines this time after rushing for toilet seats during the May Day holiday, the premier said.

He urged Chinese manufacturers to take better advantage of the Internet to upgrade their products.

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