BEIJING: China aims to make the unhindered and stable operation of its industrial and supply chains a top priority as it looks to revive the world’s second-largest economy after enduring disruptive Covid-19 outbreaks in recent months.
The industrial sector is the backbone and growth engine of the Chinese economy, the country’s Ministry of Industry and Information Technology (MIIT) said in a recent video teleconference. It vowed incremental efforts in policy implementation to ensure the sector’s steady expansion in the second quarter.
Recent official data showed that the profits of China’s major industrial firms recorded slower growth. Enterprises with an annual main business revenue of at least 20 million yuan (about $2.98 million) saw their earnings expand 3.5 percent year on year in the first four months of 2022, compared to 8.5 percent in the first quarter.
The economy took a severe beating in the past three months as the Omicron variant of the coronavirus forced factories in cities like Shanghai and Shenzhen, as well as Jilin province, to suspend operations. Logistics bottlenecks also emerged in the period.
China has moved swiftly to smoothen transport and logistics and adopted a slew of measures, including releasing a “white list,” to help enterprises in virus-hit regions resume production and guarantee the supply of essential parts, equipment and products.
A subsidiary of Shanghai Challenge Textile Co. Ltd. had seen about 1,350 of its employees return to work after it was included in the first batch of 666 companies on the economic hub’s “white list,” which is designed to support firms in resuming production.
“Since we resumed production, the local government has given us great support to cope with labor shortages and raw material transportation,” said Yang Shibin, the company’s president.
Shanghai Challenge Textile’s output has surpassed the pre-outbreak level two months ago, and orders that had been delayed due to the flare-up have recovered, he added.
Personal computer giant Lenovo also faced production challenges but overcame them. Yang Yuanqing, its chairman and chief executive officer, said the outbreak “affected our factories in Shenzhen in the first quarter of the year, but production lines in the cities of Hefei and Wuhan continued normal operations, which made up for the loss.”
The MIIT has vowed to coordinate coronavirus control with industrial production, help enterprises stabilize their production amid the outbreak and improve “closed-loop” management plans.
“We should make the unimpeded and stable operation of the industrial and supply chains a top priority in reviving the industrial economy,” MIIT Minister Xiao Yaqing said.
Besides leading industrial companies, the ministry also pledged to help boost support for small and medium-sized enterprises (SMEs).
Sichuan province has formed 10 working groups on stabilizing industrial chains in electronics and equipment manufacturing. In Henan province, the local government has helped 40 “little giant firms” characterized by professionalization, refinement, specificity and novelty to gain credit for financing.
“The ministry is organizing service platforms for SMEs to visit the enterprises, industrial parks and clusters, and address the difficulties and demands of SMEs,” MIIT official Liang Zhifeng said.
