Bloomberg:

We observed that industrial output growth is lower than in December last year. Do you think it is caused by the risk of increased U.S. tariffs? Thank you.

Fu Linghui:

Thank you for your question. Since the beginning of this year, policies aimed at vigorously advancing new industrialization, expanding and strengthening advanced manufacturing, and promoting the renewal and upgrading of traditional industries have contributed to relatively rapid growth in the equipment manufacturing and high-tech manufacturing sectors. New industrial momentum has been cultivated and strengthened, business expectations have improved, and overall industrial production has maintained stable and rapid growth.

First, industrial production continues to grow. All localities have stepped up their support for industrial production and strengthened the supply of essential resources, thereby creating conducive conditions for industrial development. In the first two months, the value added by industries above designated size increased by 5.9% year on year, accelerating by 0.1 percentage point compared to the whole of last year. The manufacturing sector experienced a growth rate of 6.9%, significantly faster than the growth rate of total industrial value added. Among these, the equipment manufacturing sector grew by 10.6%, accelerating by 2.9 percentage points compared to the whole of last year, thus providing strong support for the steady and rapid growth of industrial production. This industrial growth rate was achieved despite a high growth rate in January-February of last year, which also reflects the strong resilience of China's industrial sector.

Second, the trend towards high-end and intelligent development in industry is becoming increasingly evident. As technological innovation and industrial innovation continue to converge at an accelerated pace, advanced technologies like information technology and AI are driving industrial transformation and emerging as key drivers of industrial growth. In the first two months, the value added of high-tech manufacturing increased by 9.1% year on year, accelerating by 0.2 percentage points compared to the whole of last year. From a product perspective, the output of industrial robots and integrated circuit wafers increased by 27% and 19.6%, respectively, in January and February. The widespread adoption of domestic AI-driven large models in key industrial sectors like electronics and automobiles is accelerating, driving innovation and development across industries. The surge in computing demand is fueling the rapid growth of related industries. In the first two months, the value added of digital product manufacturing rose by 9.1%, while server output skyrocketed by 73%.

Third, industries are making progress in green development. New energy industries have demonstrated strong growth momentum, and the use of green energy is increasing, which provides a significant boost to the economic transition towards green and low-carbon development. From January to February, the output of NEVs and lithium-ion batteries for automobiles increased by 47.7% and 37.5% year on year, respectively, sustaining a high growth rate. Additionally, industrial enterprises above designated size maintained double-digit growth in wind and solar power generation.

Fourth, business expectations have improved. Since the beginning of this year, macroeconomic policies have become more proactive. Breakthroughs have been achieved in the application of technologies like AI, which have helped improve business expectations. In February, the manufacturing PMI stood at 50.2%, up 1.1 percentage points from the previous month. The new orders index for the manufacturing sector was 51.1%, increasing by 1.9 percentage points.

Overall, industrial production has maintained relatively fast and stable growth this year, manifesting new and positive momentums. However, we should also recognize that structural imbalances in market supply and demand remain, prices in certain industries are low, and some enterprises underachieve. Looking ahead, we need to implement various measures to expand domestic demand across all aspects, promote the integrated development of technological and industrial innovation, enhance business operations, and drive high-quality industrial development. Thank you.