China to advance agricultural modernization

 

 

Chinese Premier Li Keqiang speaks at the central rural work conference in Beijing.

The conference was held from December 22 to 23.   Photos by Xie Huanchi

 

 

China to advance

agricultural modernization

 

By Liu Xinyong, Shi Hao, Fang Dong, Yu Wenjing and Wang Yu

 

China concluded a rural work conference on Tuesday of December 23, vowing to push forward agricultural modernization through reform and innovation.

The country made great progress in rural development in 2014 with its 11th consecutive bumper harvest and an increase in farm income, according to a statement released after the two-day central conference, which sets the tone for next year.

 

STARK CHALLENGES

 

“However, China is facing unprecedented challenges if it wants to achieve sustained and stable development in the agricultural sector,” said the statement, citing rising agricultural production costs, impaired cultivation and limited arable land and fresh water.

Li Guoxiang, a researcher with the Chinese Academy of Social Sciences, said China’s agricultural production is confronted with surging costs, pressure for the government to subsidize agriculture and the constraints of resources and environment.

“If it stays this way, a question mark should be placed after whether China can achieve sustainable development of agriculture,” Li said.

To solve the problems, China must accelerate agricultural modernization and raise quality and efficiency of agriculture, Zhu Lizhi, an expert with the Chinese Academy of Agricultural Sciences, told Xinhua.

The statement said that China will strive to transform the pattern of agricultural development, raise the output rate of the land, increase resource utilization rate to attain intensive and sustainable growth.

 

IMPORTANT BUT LESS DEVELOPED

 

Under the economic “new normal”, agricultural modernization is of great significance to stabilizing economic growth, adjusting structure and improving people’s livelihood.

Agricultural modernization is the foundation and pillar for China’s modernization drive, but it is a prominent weak point at present, the statement said.

“Compared with fast-advancing urbanization, industrialization and informatization, our country’s agricultural modernization is lagging far behind, seriously impeding the synchronized development of the four aspects,” said Li.

Top policymakers at the meeting pledged to make more efforts to speed up agricultural modernization in order to unleash farmer consumption potential and spur investment in rural infrastructure.

A growing agricultural sector will also forge new engines to propel China’s economic expansion, according to the statement.

 

FINDING THE WAY OUT

 

“Food security should be China’s top priority during the agricultural modernization process. China will keep cereal largely self-sufficient and staples absolutely safe,” the statement read.

Farmers are encouraged to form new agricultural entities in an innovative way to achieve economies of scale.

To facilitate associating farmers and their lands, China will guide orderly transfer of management rights of rural lands to new agricultural entities.

China will exploit agricultural resources in a more friendly and “greener” way to protect farm land and fresh water.

Policymakers decided to extend greater policy support and beef up financial support to underpin rural development.

China will actively push forward the construction of “new socialist countryside” and improve living environment for farmers.

The country will also wage a war against poverty and release more farmers from poverty. At the same time, rural residents are encouraged to take advantage of urbanization and start small businesses.

The Central Rural Work Conference is an annual event for Chinese policymakers to deliberate on and map out rural policies for next year.

The meeting discussed a guideline of deepening rural reform and advancing agricultural modernization.

 

 

Chinese Premier Li Keqiang (3rd from left) speaks at the central rural work conference

in Beijing.   Photo by Xie Huanchi

 

Chinese Premier Li Keqiang (3rd from left of back row) speaks at the central rural work

conference in Beijing. The conference was held from December 22 to 23. Chinese Vice Premier

Zhang Gaoli also attended the meeting.   Photo by Xie Huanchi

 

 

 

 

By wereadchina Posted in Economy

China’s service sector growth sign of improved economic structure

 

 

 

China’s service sector growth

sign of improved economic structure

 

By Fang Dong, Liu Xinyong, Han Qiao, Shi Hao, Wang Xi and Chen Weiwei

 

The share of China’s service sector businesses among all enterprises is up more than 5 percent from 2008, signalling an improved economic structure, the latest official data showed on Tuesday of December 16.

There were nearly three times more service sector companies than companies in the secondary industry at the end of 2013, according to results of the latest national economic census published by the National Bureau of Statistics (NBS).

China is striving to adjust its economic structure to ensure sustainable growth after years of rapid development, and a continuing slowdown has prompted the world’s second-largest economy to shift into an economic “new normal” focused more on quality than GDP growth figures.

The economic census revealed there were 10.86 million enterprises engaged in the secondary and tertiary industries at the end of last year, up 52.9 percent from 2008.

Enterprises in the tertiary industry accounted for 74.7 percent of total businesses, up 5.7 percentage points from five years ago, while the proportion of companies in the secondary sector shrank to 25.3 percent.

Total assets of companies in the two sectors totaled 466.8 trillion yuan (76.3 trillion U.S. dollars) last year, rising markedly by 124.6 percent from 2008. The service sector accounted for 73.9 percent.

NBS director Ma Jiantang said the census results showed an improvement in economic structure and people’s well-being in the past five years, despite the lingering impact of the global financial crisis.

The wholesale and retail sectors comprised the largest proportion of companies, accounting for 25.9 percent of the total, followed by manufacturing at 20.7 percent and public management, social security and social organizations at 14 percent.

The economic census also showed some 166,000 firms had business interests in the strategic emerging sector, including new energy and IT, representing t2 percent of the total.

In addition, more than half of the companies were located in China’s prosperous eastern regions, while those from less-developed central and western areas accounted for no more than 20 percent each. The northeastern region, China’s old industrial base, accounted for less than 7 percent of total companies.

China launched its third national economic census in 2013, covering the secondary and tertiary industries. The first two economic censuses were conducted in 2004 and 2008.

Ma said the census results will be used as a key reference for the country to enhance macro regulation, speed up economic transformation and draw up a long-term development plan.

 

ECONOMIC STRUCTURE IMPROVING

 

China is transforming its economy to steer itself onto a sustainable path and adapt to the “new normal” as high-speed growth comes to an end.

Zuo Xiaolei, chief economist of China Galaxy Securities, said a new economic structure is needed to create a new economic driving force as previous dividends, such as labor advantages, fade away.

A tone-setting economic policy meeting that concluded last week emphasized the importance of adjusting the economic structure, while noting positive changes have already taken place.

The census results highlighted an improved economic structure featuring upgraded manufacturing, an expanding service sector and increasingly robust businesses.

The national survey showed a more competitive manufacturing sector, which has begun to grow out of its reputation for low costs and low added value. The number of China’s large high-technology manufacturing companies surged to 26,894 by the end of last year, an increase of 1,077 from 2008, representing 7.8 percent of all companies in the sector.

The service sector has also started to play a bigger role in the economy, with a surge in firms and jobs, the census said.

Experts believe a dynamic service sector signals that China’s economy and society have entered a new phase, with a huge capacity to absorb labor, while expending relatively less energy.

China’s service sector outperformed the industrial sector for the first time by contributing 46.1 percent of the 2013 GDP.

The improving structure was also evidenced by diversified business ownership and corporate performance, the census showed.

The number of private enterprises in China soared 55.8 percent from 2008 to 2013 while state-owned companies became fewer but stronger. The average revenue of China’s companies increased 64.2 percent from 2008, indicating better quality and efficiency of the economy.

In addition, the census showed China had 7.85 million small and micro-sized enterprises in the two sectors by the end of 2013, accounting for 95.6 percent of the total.

 

BRIGHT ECONOMIC TRENDS

 

Although confronted with a property slowdown, sluggish domestic demand and unsteady exports, China’s economy has shown a silver lining amid downward pressure.

Zhuang Jian, senior economist of Asian Development Bank, said the census suggested a positive trend in economic development and structural adjustment despite risks and challenges both at home and abroad.

He noted modern manufacturing, emerging industries and rapidly growing small firms will offset falling traditional industries.

Given the ongoing economic transformation and upgrade, China still needs to continue its overall reform to eliminate barriers, Zhuang added.

China’s economy expanded 7.3 percent year on year in the third quarter, the lowest reading since 2009, indicating looming downside pressure.

However, Helen Qiao, chief Greater China economist at Morgan Stanley, said the Chinese economy stands a good chance of bottoming out in the second half of next year due to flexible reform and pro-growth policies.

 

 

 

 

FACTBOX

 Major data from China’s 3rd economic census

By Wang Yaguang

China on Tuesday of December 16 published results of its third national economic census, which showed the country’s economic structure continued to improve between 2008 and 2013.

Following are major data from the economic census.

China had 10.86 million legal units engaged in secondary and tertiary industries at the end of 2013, up 52.9 percent over the second economic census at the end of 2008.

The country had 8.21 million corporations in the secondary and tertiary industries at the end of 2013, of which 97.5 percent were domestically funded companies, 1.2 percent were corporations with funds from Hong Kong, Macao and Taiwan, and 1.3 percent were foreign-funded enterprises.

The secondary and tertiary industries employed a total of 356.02 million people at the end of 2013, 30.4 percent more than at the end of 2008.

At the end of 2013, aggregate business capital in secondary and tertiary industries reached 466.8 trillion yuan (76.27 trillion U.S. dollars). Secondary industry, which includes industrial and construction enterprises, accounted for 26.1 percent of total business capital, while tertiary industry, or the service sector, accounted for 73.9 percent of the total.

The country had 7.85 million small and micro-sized enterprises at the end of 2013 in the secondary and tertiary industries, accounting for 95.6 percent of the total and providing 50.4 percent of total job positions.

Major industrial enterprises invested a total of 831.84 billion yuan in research and development in 2013, 170.7 percent more than in 2008, accounting for 70.2 percent of total social spending on R&D.

The country had 26,894 large high-tech manufacturing companies by the end of 2013, making up 7.8 percent of all large manufacturing companies, up 1.3 percentage points from 2008.