Foreign and private investors now contribute more than half of
China's industrial output, the statistics bureau said
yesterday.
Relaxed ownership rules in the manufacturing sector led to
foreign and private factories contributing 53 percent of last
year's industrial revenue, according to a National Bureau of
Statistics (NBS) report released yesterday. The figure was 41
percent in 2002.
Industry is the backbone of China's fast-paced economy, despite
the government's efforts to develop the country's agricultural and
service sectors. In 2006, 43 percent of China's gross domestic
product came from industrial expansion.
While it's seen rapid and stable growth in the industrial
sectors, China has restructured its economy to increase the weight
of its service sector. By 2006, the service industry accounted for
40.1 percent of the economy.
Industrial companies with foreign backing accounted for 31.5
percent of China's industrial revenue last year, up from 29.3
percent in 2002.
Measures to encourage the development of the private economy in
recent years have seen private firms' industrial output increase at
a faster pace. Private companies' contribution to China's
industrial output increased from 10.7 percent in 2002 to 21.2
percent in 2006.
But the NBS report said yesterday that State-owned enterprises
(SOEs) still play an important role in the sectors that are
important to the country's economic security. For example, SOEs
accounted for nearly 99 percent of economic output in the oil and
natural gas exploration sectors, and the figure is 90 percent for
the electricity industry.
Increased investment has also seen the number of companies with
annual revenue higher than 2 million yuan increase from 120,000 in
2002 to 300,000 last year, according to the report. It said foreign
and private investors own 70 percent of the country's 300,000
industrial firms.
The number of SOEs affiliated to the central government has
dropped to 155 from 196 since restructuring began in 2003.
The State-owned Assets Supervision and Administration Commission
(SASAC) plans to cut the number of major companies under its
control from 155 to between 80 and 100 by 2010. But Xinhua quoted
SASAC researcher Wang Zhigang as saying the goal will be met by the
end of next year itself.
The central government will also focus on developing 30 to 50
companies to better compete with foreign firms, Li Rongrong,
minister of the SASAC, said recently.
He also said the companies under his supervision will
concentrate on strategic industries like the military, electricity,
petroleum and chemicals, telecom, coal, civil aviation and
shipping.
"So far, SOEs have achieved a satisfactory performance in
meeting the government's economic development goals," said Li,
commenting on the role of the State assets regulator, which was set
up in 2003 to take control of big SOEs by promoting mergers and
acquisitions and allowing poorly performing State firms to go
bankrupt.
Performance this year
China's industrial firms reported 1.56 trillion yuan of profits
in the first eight months of this year, up 37 percent from a year
earlier.
Profits of State-owned enterprises rose 31 percent to 680.1
billion yuan, while collective and foreign-funded firms posted 39.3
billion yuan and 418.4 billion yuan. Private companies' profits hit
260 billion yuan, up 48.5 percent compared with the same period
last year.
Booming growth was primarily driven by soaring profits in
sectors like steel, building materials and transport equipment,
according to the NBS.
Steel firms saw their profits rise 58.9 percent from the same
period last year, while profits of building material companies
surged 64 percent and that of transport equipment makers went up
66.5 percent.
Lin Yueqin, a researcher with the Chinese Academy of Social
Sciences, attributed rapid profit growth to the continued expansion
of China's economy over the past few years.
"We have been gathering steam since 2003 and solid economic
expansion has ensured profit increases," Lin told China
Daily.
The economy has expanded at an average of 10.4 percent over the
past four years - more than double the average growth rate of the
world economy during the same period.
He said the fast growth has brought considerable improvement in
the income and living standards of both rural and urban
regions.
"This has sped up demand, and that in turn has accelerated
industrial development," said Lin.
(China Daily September 28, 2007)
