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Business / Industry Watch

Golden era ends for industrial growth

By GAO YUAN (China Daily) Updated: 2014-12-23 13:56

Growth in industrial activity slowed this year to 8.3 percent, the weakest expansion since 1998 when the figure began to be announced, and conditions will remain difficult in the years ahead as the nation seeks a new economic model, the government warned on Monday.

Minister of Industry and Information Technology Miao Wei said industrial value-added output will grow at an "intermediate speed" in the foreseeable future as the broader economy slows. The ministry has set next year's target at about 8 percent.

"A moderate growth rate will be the 'new normal' as the country faces strong challenges in lifting growth while tackling overcapacity in industries such as steel, cement and flat glass," Miao said.

Industrial value-added output measures the final output value of industrial output, or the value of gross industrial output minus intermediate inputs such as raw materials and labor costs. The gauge covers only manufacturers with more than 20 million yuan ($3.2 million) in annual revenue.

China recorded high rates of industrial production growth over the past decade, peaking in 2007 at 18.5 percent. Slowing exports and domestic demand have caused a steady slowdown since 2012.

This year will be the second in a row for China to report single-digit industrial production growth. The figure was 9.7 percent last year.

Miao called for broader use of high technology in sectors including integrated circuits, telecommunications and alternative-fuel vehicles.

"One of the major tasks for 2015 is to find new growth engines," he said, adding that the government is encouraging local enterprises to invest in innovation.

"The merger of industrial and information technologies will help China lift the quality of manufacturing," Miao said.

China aims to make a number of emerging sectors, such as e-commerce and next-generation telecom networks, play a bigger role in lifting domestic demand.

Information consumption jumped about 25 percent this year to 2.8 trillion yuan. Turnover from e-commerce reached a record high of 12 trillion yuan, up 20 percent.

Tian Zheng, an analyst at Beijing-based research firm Analysys International, said that online shopping and other Internet-generated demand is set to play a bigger role in the economy.

"This is the optimum time for e-commerce to thrive. With half of Chinese residents starting to use the mobile Internet, not only will the online retail market prosper, so will the information service sectors including online banking and insurance," Tian said.

Data from Analysys showed that consumers spent more than 200 billion yuan on mobile shopping in the third quarter, more than tripling the year-earlier amount.

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