The Economic Daily:

During the first quarter of this year, Hebei achieved a relatively high economic growth rate of 7.4% year over year. What are the measures that you have adopted to pursue economic restructuring, reduce excessive industrial capacity, promote economic transformation and high-quality development? What achievements have you made? 

Xu Qin:

Thank you for your interest in Hebei's economic development. The good start of Hebei's economy during the first quarter of this year should be attributed to the concerted efforts of the entire province along with the Hebei CPC Committee and provincial government, who resolutely implemented the guidelines of the Central Economic Work Conference. As you just said, our GDP growth rate of 7.4% in the first quarter is the best in years. Meanwhile, our fiscal revenue increased by 13%, the value-added of industries above the designated size grew by 8.8%, applied foreign investment rose by 10.6% and exports jumped by 12.3%. The remarkable achievement is proven by the data. But how did we make it into reality? This is a big issue and I will give you a quick introduction. 

We have resolutely put into practice the important instructions of General Secretary Xi Jinping. General Secretary Xi has inspected Hebei seven times since the 18th CPC National Congress and has made a series of important instructions for us. In particular, he asked Hebei to resolve difficulties resolutely and accelerate transformation proactively. We have implemented the General Secretary's instructions in all these aspects, followed the new development philosophy and pushed forward the supply-side structural reform. Our concrete steps include: 

First, we have made three-year plans. During the past two years, we worked out 15 three-year action plans, covering areas like innovation-driven development, industrial transformation and upgrading, and strategic emerging industries. They have been formulated in line with the "13th Five-Year Plan" and lay a solid base for the upcoming "14th Five-Year Plan." In doing so, we are embracing overall industrial transformation and upgrading and improving economic quality. 

The second is our efforts to cut overcapacity. We have worked out a number of regulations and standards concerning quality, environmental protection and security issues which force some industries to cut overcapacity. Other measures include merging and restructuring of enterprises, closing valueless small enterprises and relocation to cut excessive capacity. Meanwhile, through international industrial-capacity cooperation, we have exported advanced production capacity. Through our endeavors, steel enterprises in Hebei have reduced from 123 to 64 and their productive capacities have been reduced by 82.23 million tons since 2013. It is not easy to make such an achievement, especially when China must simultaneously deal with the slowdown in economic growth, make difficult structural adjustments, and absorb the effects of previous economic stimulus policies. We have overcome many difficulties, including how to help workers displaced due to overcapacity cuts. However, we would rather temporarily sacrifice GDP growth and fiscal revenue, and win a strategic space for development in the future. We're determined to fight to keep the sky blue above Beijing, Tianjin and Hebei province. 

The third is that we have made efforts to promote innovation-driven development from five aspects: innovation entities, innovation capacity, innovation professionals, innovation ecosystem and innovation environment. Just as Mr. Wang said that in the beginning of 2017, the province had a total of 2,031 national-level high-tech enterprises. Over the past two years, the number has grown to 5,099, and we expect the number will be more than 7,000 by the end of this year and 10,000 within three years. The number of high-tech SMEs has grown by 26,000 in the past two years and it is expected to surpass 80,000 next year. During the first quarter of this year, the number of patent applications and authorized patents grew by 59.5% and 55.6% respectively. Last year, investments, value-added and exports of high-tech enterprises rose by 30.4%,15.3% and 28.3% respectively.

The fourth is to transform and upgrade our industries through six methods. There are 150,000 traditional manufacturing enterprises in Hebei province, so there is huge potential to improve the quality, build brands and increase efficiency. Many industries are low end, therefore, moving up to high end will increase their future competitiveness. This is the main battlefield of transformation and upgrading. We took the following six methods to transform and upgrade traditional industries. 

First, we have persisted in achieving high standards and high quality. Here is an example. The Junlebao Dairy Co, Ltd participated in the World Food Quality Evaluation Conference last year and won the highest prize: the "Special Gold Award." Now its milk powder has been sold to Hong Kong, with demand exceeding supply. 

Second, we have put more emphasis on industrial design so as to improve the quality of our products and give them more cultural and artistic connotation. At the same time, the added value of our whole products has been improved. 

Third, we have launched the technological transformation and upgrading plan. We intend to complete the technological transformation of large industrial enterprises by 2020. 

Fourth, we have extended industrial chains. We have promoted the integration of upper- and lower-stream cooperation between industries, so as to create a group of famous brands and achieve the upgrading of industrial chains. 

Fifth, we promoted the in-depth integration of industries. In order to achieve industrial transformation and upgrading, we promoted traditional industries to integrate with artificial intelligence (AI), the internet, and big data. The approach is also a future development trend and key area. 

Sixth, we have implemented innovation-driven development. This is an important means to enhance the competitiveness of future industries. 

There are many examples in these six areas. Take Handan-based Chenguang Biotech Group Co, ltd for example. The company has advanced bio-extraction technology, and its capsicum red pigments provide the global supply, occupying a considerable share of the international market. 

Meanwhile, we have further optimized the distribution of the industrial chains of the whole province. At the city level, we promoted the development of leading industries; while at the county level, we promoted the revitalization of economic endeavors with distinctive features of local areas. According to our statistics, there are a number of traditional industries with obvious competitiveness in Hebei province, and 80 of them exceed 10 billion yuan in economic strength. Many of them are leading enterprises in their industries, playing a very important role in the national trade and export market. These industrial clusters with distinctive local features will foster a new source of growth of Hebei. In the future, we will realize the transformation and upgrading of traditional industries, so as to optimize the supply, improve the quality and increase the benefits. Through several years of efforts, we will double both the scale and efficiency. 

Finally, we stepped up efforts in fostering the emerging industries of strategic importance. We pursued the coordinated development of the Beijing-Tianjin-Hebei region and promoted high-level openness to achieve interconnected growth. We gathered resources, opened up markets and developed emerging industries of strategic importance. We have worked out ten development goals and have comprehensively promoted the implementation of plans involving AI, intelligent manufacturing equipment, information technology industry, biotechnology industry, new materials, advanced environmental protection and other fields. We also implemented six major projects, such as the industrialization of high and new technology. 

Emerging industries of strategic importance grew by 16.8% in the first quarter of this year, while other industries doubled at the same time. We will seize opportunities, further promote industrial transformation and upgrading, and maintain sustained and high-quality economic development. At the same time, we also planned in advance for some future industries, such as emergency equipment industry, the winter sports industry and the rehabilitation industry. These industries have huge market capacity, but the current supply cannot meet market demands. Hebei will continue to make great efforts to promote industrial transformation and sound economic development.