The Economic Research Institute under the State Development
Planning Committee (SDPC) recently completed the Economic
Prosperity Analysis Report of China's Industries (2002-2003). The
report makes forecasts and analysis of China's 10 key industries.
Telecommunications Sector and the Internet
The anticipated total revenue of the telecommunications sector for
2003 will reach 450-470 billion yuan (US$54-56 billion), up by 12
percent from last year. By 2005, this revenue is expected to hit a
600 billion yuan (US$72 billion) target, contributing 5 percent of
gross domestic product (GDP).
However, the report points out that there are not enough new
businesses to support this increase, that telecom fees are likely
to be lowered and new subscribers are mainly low-end users.
Energy and Power Sector
In
the next two to three years, the reform in the power sector will
enter an adaptive and transitional period. The need for power will
increase steadily but there will be little room for a fall in
electricity prices in the short term. However, the report does
mention that in the long term the price may drop.
In
2003, the gap between the need for oil and oil supply will widen
further, so there will be increased need for large-scale import and
economizing measures. The coal industry continues to prosper with
production and purchase on the rise.
Real Estate
The growth of real estate investment will slow down, as will its
consumption.
Automobile
The automobile industry is on a fast track with an anticipated
growth rate set to 30 percent in 2003. There will be heavy
competition in economy cars, and in the mid-grade car market, but
economy cars will have more potential. Large-scale mergers and
acquisitions are still finding it hard to take place.
The report urges the encouragement of car purchase and the
promotion of "tax-for-fees" reform.
Manufacturers should make full use of price strategy, the reports
asks, and of brand innovation, and quicken the research and
development of Chinese brand economy cars.
Computer and Software
Policy environment for the domestic and overseas market will be
better for 2003. Compared with 2002, the computer hardware and
software industry is expected to rise by 40 percent and 30 percent
respectively. The computer industry also appears to be
concentrating its growth in coastal areas where foreign investment
is strongest.
Medicine
Growth in medicine for 2003 is no less than 15 percent.
Cephalosporin-related medicines will become the people's main
choice in the cities. The medicine industry is to begin a period of
solid development.
The effect of global pharmaceutical transfer has become more
obvious. Chemical pharmaceuticals has now the characteristic of a
mature industry while biological pharmaceuticals has become the
highlight of the sector. Traditional Chinese Medicine (TCM)
develops steadily but the cost of sales is still too high.
Petrochemical Industry
The price of crude oil in international markets will continue to
rise and then fall in 2003. This tendency will negatively affect
China's petrochemical industry in a short period. In general, the
sector will grow by some 9 percent.
Integrated Circular (IC)
The IC market begins to recover and will grow quickly in the long
term. The report suggests granting preferential measures to
equipments and instruments in the IC industry.
Iron and Steel
The overall price of steel in 2003 is expected to be higher than
2002, and profit in the sector will also rise slightly. The price
of rolling steel will stay as expected while the price of armor
plate, as a whole, will fluctuate.
Transportation
Although the transportation tension has lessened in some senses,
the facilities still do not match up with the rapid economic
development. On the whole though, the transportation industry will
keep rising.
The report suggests that big cities should establish overall
transportation systems mainly with rail transportation and other
transportation accessories, instead of mainly developing road
vehicles including cars, taxies and buses.
(China.org.cn by Tang Fuchun, February 26, 2003)