Yicai:

Minister Miao just mentioned that China has become the largest power in terms of manufacturing. China's manufacturing sector has made tremendous progress and now faces certain pressures and challenges. Looking at the preceding indicators, we see that the PMI of manufacturing has been below 50% for the fourth straight month. The year-on-year growth rate of PPI has turned from positive to negative. What do you think of the current situation of industrial manufacturing? What's your advice on how to realize high-quality development of manufacturing?

Huang Libin:

Thanks for your questions and for paying so much attention to the economic indicators. Generally speaking, the industrial economy has been running stably despite the complicated and volatile situation at home and abroad and increasing downward pressure in the economy. In the first eight months, the industrial economic development showed the following trends in the areas of industrial production, corporate performance, industrial restructuring, and the development of medium and small-sized enterprises.

First, industrial production has basically been running stably. In the first eight months, enterprises above the designated size saw value-added industrial output grow 5.6% from last year, which is within this year's target range of 5.5-6% that we proposed at the beginning of the year. The overall growth has been steady but gradually slowing down.

Second, the declines in corporate profits have narrowed to certain extent. In the first seven months, industrial enterprises above the designated size saw profits decrease 1.7% from last year. However, this decline narrowed by 0.7 percentage points in comparison to profits in the first half of the year. Moreover, industrial enterprises above the designated size saw profits increase 2.6% from last year in the month of July.

Third, the efforts to reduce overcapacity have been paying off, especially in the raw materials industry. In the first eight months, this industry experienced a 7% year-on-year increase in value-added industrial output, which is 2.6 percentage points higher than the growth rate of the same period last year. Our commitment to reducing overcapacity in the iron and steel industry in recent years has borne fruit. The capacity utilization rate of the iron and steel industry has exceeded 80%. While maintaining a rapid speed of production, the industry managed to keep the sales-to-production ratio at a high level.

Fourth, the conditions of private and medium and small-sized enterprises have further improved. The business environment has continued to improve. We pressed forward with the work of settling accounts receivable owed to private and medium and small-sized enterprises. Such enterprises have been further vitalized. In the first eight months, such enterprises saw value-added industrial output increasing 7.3% year-on-year, higher than the growth rate of the industrial sector as a whole.

Surely, we must notice that industrial growth has showed a trend of slowing down while still running stably. Some indicators are facing downward pressure. We should take the big picture of the global situation into consideration. At present, global economic growth has been slowing down. The global manufacturing PMI has been below 50% for several consecutive months. The world's industrial growth rate was merely 2% in the first half of this year, while that of developed countries was 0.1%, and developing countries was 3.7%. China's growth rate was still much higher than the global standard. Meanwhile, our industrial production was subject to the influence of geopolitical conflicts, economic and trade frictions between China and the United States, among other uncertainties. In addition, our manufacturing industry has entered a critical period of development with various difficulties to overcome, including industrial restructuring which will somehow affect growth rate. Industrial governance and policy adjustments will also affect the production in certain industries and enterprises. Under the influence of internal and external factors, the industrial economy is facing certain downward pressure.

In short, it is not easy, indeed, to keep our enormous, 30-trillion-yuan industrial economy running stably. The fundamentals of the industrial economy of our country are still sound. We shouldn't be distracted by the short-term changes. Instead, we should focus on the quality and effectiveness of the economic development. We should maintain the strategic concentration on pressing forward with industrial restructuring and upgrading. Following the decision and arrangement of the Central Committee of the CPC and the State Council for economic work, we should implement supply-side reform with in-depth approaches according to the guidance of "consolidating achievements, further vitalizing enterprises, upgrading industrial chain and removing economic barriers", make efforts to stabilize employment, our financial situation, foreign trade, foreign and domestic investment and economic forecast and strive to fulfill our duties.

To keep the industrial economy running stably and maintaining high quality development, we should continue to drive growth through innovation, strengthen the industrial base, step up the development of the industrial chain, fully mobilize the enthusiasm of enterprises, and strive to create a better environment for development. And I believe, through our efforts, the goal we set at the beginning of the year will be achieved. Thank you.