Source: Global Times    Published: 2019-1-29

China's manufacturing will feature the pursuit of high-quality growth and further opening-up in designated areas such as plane making and shipbuilding, the head of the Ministry Information and Industry Technology (MIIT) said on Tuesday.

Analysts said the manufacturing sector's opening-up showed China's resolve to build an open economy by fostering competition.

China has been steadily moving toward high-end manufacturing, and the country's industrial output surpassed 30 trillion yuan ($4.5 trillion) for the first time in 2018, in spite of a complicated business environment domestically and globally, the MIIT said on Tuesday.

Industrial investment rebounded in 2018, with year-on-year growth of 6.5 percent, accelerating by 2.9 percentage points from 2017, Miao Wei, head of the Ministry of Information and Industry Technology, told a press briefing on Tuesday. Within the total, investment in manufacturing grew 9.5 percent, which was the fastest pace since July 2015, the minister noted.

Meanwhile, nearly 50 percent of the investment in manufacturing was aimed at technological transformation instead of expanding capacity, which will help upgrade the supply chain.

Further opening-up

As the domestic economy demonstrated resilience amid downward presure, Miao said that in 2019, his ministry will push forward opening-up in the aircraft production, shipbuilding, automotive and telecom sectors. The sectors were announced in a circular released by the State Council, China's cabinet, in June 2018.

The general manufacturing industry has basically been fully opened to foreign investment, and foreign capital invested in the sector grew 22.9 percent year-on-year in 2018 to $41.2 billion.

"Rumors claim that foreign investment has withdrawn from the Chinese market due to trade friction between China and the US. In fact, companies have been investing here," he said.

In comparison, global FDI slumped by over 40 percent in 2018, Miao said.

In 2018, Germany's BMW decided to take control of its main joint venture in China as the Chinese government relaxed ownership rules for the world's biggest auto market. German chemical maker BASF won approval in July to build China's first wholly foreign-owned chemicals complex.

US electric car producer Tesla saw construction begin for its $2 billion Gigafactory in Shanghai early this month.

Wan Zhe, chief economist with the International Cooperation Center of China's National Development and Reform Commission, said while many of the opening-up plans were announced in 2017 and 2018, "2019 will become a major year in which such plans see implementation on the ground."

"Compared with what it was before, China has already achieved a high degree of opening-up. The nation is now steadily withdrawing its umbrella of protection, believing its homegrown industries will do better by engaging in full-scale competition with foreign rivals," Wan told the Global Times.

Wan noted that opening-up is a comprehensive project involving not just offering better market access but also the building of a system that supports market competition, such as an improved legal framework to protect companies' intellectual property.

Development of 5G

Further pushing forward the development of 5G is also a major focus of the MIIT, according to Miao.

In 2018, investment in network infrastructure was steady and robust, and the 5G research and development process moved faster.

The third-stage testing of technical experiments for 5G research and development has finished, and the 5G system devices are ready for pre-commercial use, noted Miao.

From 5G trials, all the system equipment met the requirements for pre-commercial use, Wen Ku, head of the MIIT information and communication department, told the press briefing.

"However, I have not seen real 5G terminals and chips for commercial use, but as far as we know, companies are pushing forward terminal chip and terminal R&D," he said.

In mid-2019, the industry is expected to see "good 5G terminals for commercial use… within which connected vehicles will be a major application," he added.

"By the end of the second quarter, the world will have received the first batch of 5G chips for smartphones. Then, we are going to welcome the first batch of 5G smartphones in the global markets," Fu Liang, a Beijing-based telecom industry expert, told the Global Times on Tuesday.

Fu said four out of the five top smartphone makers to roll out 5G models will be Chinese brands.

Wan Zhe is a visiting fellow of Chongyang Institute for Financial Studies, Renmin University of China.