Plan for emerging industries on cards

China will come out with a five-year plan (2016-20) for the development of its strategicemerging industries and to further boost its innovation efforts, the nation’s top economicplanner said on Friday.

The National Development and Reform Commission highlighted a number of priorities forreform, including facilitating an innovative drug approval process, opening low-altitudeairspace, opening up of broadband services to private investors and promoting chargingfacilities for electric vehicles.

At the same time, the government will also encourage strategic emerging enterprises toexpand channels for fund raising through initial public offerings, bond issues and crowdfunding.

Wang Changlin, head of the research department of industrial economics under the NDRC’sAcademy of Macroeconomic Research, told China Daily that related investigations andstudies are underway.

This is the last year of the nation’s 12th Five-Year Plan (2011-15) and it is expected that adraft of the 13th Five-Year Plan will be submitted to the National People’s Congress in March.

“Specific five-year plans for industries will be released after the national plan. This is mostlikely to happen in the second half of next year,” he said.

Promising industries such as health, energy efficiency and environmental protection, high-endequipment, mobile Internet and e-commerce are expected to have a total value of about 50trillion yuan ($8 trillion) by the end of 2020, said Wang.

According to the NDRC, revenues of the 27 strategic emerging industries totaled 3.96 trillionyuan in the first quarter of 2015, up 11.1 percent from a year earlier.

Eight areas saw robust growth in the first quarter, including new computer products, electronicdevices, audio-visual equipment, fiber and cable manufacturing, new style rail transportationequipment manufacturing, photovoltaic and wind equipment, pesticide manufacturing andaerospace equipment manufacturing.

A survey conducted by the NDRC and related agencies showed that entrepreneurs of thestrategic emerging industries are optimistic about economic prospects. The entrepreneursconfidence index for the industry is much higher than the national average. It was based oninvestigations of more than 1,000 companies in the emerging strategic industry, according toan NDRC statement.

However, further reforms are needed to reduce or remove the procedural obstacles. Forinstance, revenue growth of drug manufacturing and medical equipment and devicemanufacturing declined by 4.1 percentage points and 3 percentage points, respectively, in thefirst quarter.

What this means is that reforms in the pharmaceutical and medical services need to beprioritized, the survey said.

Companies in the sector are also facing difficulties in fund raising. Many of them are smalland medium-sized asset-light firms and usually it is difficult for them to get loans from banks.

It is also necessary to improve the credit system and promote indirect financing throughintellectual property mortgage loans. Also, it is important to further improve the directfinancing system and change the low proportion of direct financing, said the NDRC.

Liu Shi’an, vice-president of the Shanghai Stock Exchange, said on May 19 that China isconsidering launching the Board of Strategic Emerging Industries, which will meet the actualneeds of emerging companies and facilitate development of a multi-tiered capital market.

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