The State Council issued a guideline on development of strategic emerging industry during the 13th Five-year Plan period, with proportion of their added value in GDP increasing from 8 percent in 2015 to 15 percent by 2020. Meanwhile, China wants five new pillar industries each with output of 10 trillion yuan, including new generation of information technology, high-end manufacturing, bio-industry, green and low-carbon industry and digital and creative industry.
Chen Jihong, chairman of the board of Wuhan Huazhong Numerical Control Co., Ltd., has a profound understanding on the proposal of accelerating application demonstration of new products and new services put forward by the guideline. Several academicians submitted suggestions on supporting localization of China’s premium numerically-controlled machine tool in May. They said that China has made significant breakthrough in software and hardware technologies of numerically-controlled system of premium machine tool, but its massive application faced difficulty in market promotion. So they hope the government can offer supportive policy to boost application of domestic numerically-controlled technology.
At present, many China’s new technologies are in the key period of industrialization. The situation of premium numerically-controlled machine tool reflects the dilemma that high and new technologies face during the process from application demonstration to industrialization, and so does Beidou navigation.
With advance in industrialization, strategic emerging industry is gradually achieving results. Based on the guideline, added value of strategic emerging industry is expected to account for 15 percent of GDP with creating more than 1 million jobs each year by 2020.
The guideline proposes that China should focus on implementation of “Made in China 2025” strategy to make breakthrough in key technologies and core parts, push forward engineering application and industrialization of major equipment and system, boost coordinated development of industrial chain, shape new image for China’s manufacturing and improve manufacturing level. It should strive to make output of high-end equipment and new material industry more than 12 trillion yuan by 2020.
Zuo Shiquan, head of equipment industry research institute of CCID, joined in the compiling of high-end equipment manufacturing section of the guideline. He said that the guideline drew up a plan for development of the industry in next 5 years.
The guideline put forward higher requirements for high-speed rail and nuclear power equipment industries, which have seen technological breakthrough. It requires reinforcing the leading position of railway transportation equipment, developing railway transportation equipment industrial chain with international competitiveness, propelling R&D and industrialization of new urban railway transportation equipment and making breakthrough in key parts and integrated technology of green intelligentization.
The guideline proposed that ocean engineering equipment industry should develop towards deep and far sea, polar sea and diversification, realize structure upgrading of major equipment and find new equipment.
Luo Huanta, head of Shenzhen Gaogong Industry Research Co., Ltd, is very familiar with new energy vehicle chain. In his opinion, the guideline, as a framework document, continues previous goals.
According to the guideline, more than 2 million units of new energy vehicles should be produced and sold in 2020. Overall technology should be at the same level with that of international countries and a batch of internationally competitive new energy complete vehicle and key component enterprises will come out.
“Leading in production capacity is a new concept, which means that the country attaches great importance to capacity” said Luo.
5 major industries
IT industry with IC as core
Officials from Ministry of Industry and Information Technology (MIIT) previously indicated that China will gradually narrow the gap between technology of integrated circuit (IC) industry and internationally advanced technology and annual growth rate of sales revenues of the whole industry will be more than 20 percent by 2020 through setting up national industrial investment funds and providing more financial supports.
Institutions’ viewpoint: Researchers with the CCID Think Tank, which is affiliated to the MIIT, indicated that information technology, still a critical technology adopted by all countries in the development of emerging industries, will further play its role in the future. New technologies and applications like new-generation broadband network, intelligent earth and cloud computing might develop into important forces advancing great-leap-forward development of the whole information industry. Information technology will also drive robust growth of multiple industries like Internet, the Internet of Things, e-commerce and cultural innovation, and create new commercial models.
Relevant companies: Unigroup Guoxin Co., Ltd. (002049.SZ); Jiangsu Changjiang Electronics Technology Co., Ltd. (600584.SH); Inspur Electronic Information Industry Co., Ltd. (000977.SZ)
>> Genetic-technology-focused bioindustry
Represented by genetic engineering, biotechnology sees emerging breakthroughs in new technologies and moves faster in penetrating into areas like medicine and agriculture. The National Health and Family Planning Commission (NHFPC) also disclosed earlier that together with departments like the Ministry of Science and Technology and a batch of scientists, the NHFPC will work out China’s precision medicine plan.
Institutions’ viewpoint: Researchers from the CCID Think Tank pointed out that the rapid development of biotechnology will boost rapid development of medicine industry and bioengineering. Nanotechnology is striding toward applied research and industrialization and expects sound prospect. Huge industrial scale will be formed.
Relevant companies: Sun Yat-Sen University Da An Gene Co., Ltd. (002030.SZ); Zhejiang Dian Diagnostics Co., Ltd. (300244.SZ); Boai Nky Pharmaceuticals Ltd. (300109.SZ); Beijing Beilu Pharmaceutical Co., Ltd. (300016.SZ)
>> Green and low-carbon
Xie Zhenhua, deputy director of the Committee of Population, Resources and Environment of Chinese People's Political Consultative Conference (CPPCC), proposed to highlight “green and low-carbon” idea in the construction of the “Belt and Road” and the cooperation of international capacity, and guide more overseas investment into low-carbon areas. Xie also proposed to initiate relevant projects under China’s South-South Cooperation on Climate Change Fund as soon as possible, and facilitate the “going out” of domestic energy conservation and environment protection industries and equipment while helping developing countries.
Institutions’ viewpoint: Researchers with the CCID Think Tank pointed out that “green and low-carbon” is an inevitable trend of the development of global emerging industries. New energy has been favored by many countries while developing emerging industries. New energy technologies, represented by nuclear power, wind power, solar power and biomass energy, keep achieving breakthroughs, the development and application of next-generation nuclear power technology will change the whole energy system.
Relevant companies: Anhui Yingliu Electromechanical Co., Ltd. (603308.SH); Jiangsu Shentong Valve Co., Ltd. (002438.SZ); Jiangsu Akcome Science and Technology Co., Ltd. (002610.SZ)
>> High-end equipment and material
According to the Technology Roadmap for Important Areas of “Made in China 2025”, the industrialization and application demonstration of over 30 kinds of critical and strategic materials will be realized by 2020; urgent development demand of strategic emerging industries like next-generation information technology and high-end equipment manufacturing industry should be met effectively, and domestic market share of critical and strategic materials should exceed 70 percent; the innovation and application demonstration system for strategic new materials and the platform for public service technology conditions should be basically built.
Institutions’ viewpoint: Zheshang Securities believed that graphene materials, featured with multiple excellent natures, is a super material steering future hi-tech competition. Graphene materials are widely applied in areas like electronic information, new energy, aerospace and flexible electronics, greatly advancing rapid development and upgrading of relevant industries. The material sees great market prospect and might catalyze the industry to expand into a market worth 100 billion yuan.
Relevant companies: Fangda Carbon New Material Co., Ltd. (600516.SH); Deluxe Family Co., Ltd. (600503.SH)
>> Digital innovation
The virtual reality(VR) industry is one representative of digital innovation. Industry insiders analyze that 2016 sees explosive growth of VR. Many well-known enterprises at home and abroad have launched their VR products, gradually realizing commercial application. For media and entertainment, the box office of
Institutions’ viewpoint: Wang Yumei, chief analyst with Huatai Securities Co., Ltd., estimated that as consumption-oriented hardware and content swam into the market, VR sees explosive growth in 2016. Around 40 million head-mounted VR equipment will be sold globally by 2020, expanding the market size to 40 billion yuan. Combined with content service and enterprise-level application, the market capacity will exceed 100 billion yuan. A VR market worth 1 trillion yuan might be developed in the long run.
Relevant companies: Palm Eco-Town Development Co., Ltd. (002431.SZ); Zhejiang Crystal-Optech Co., Ltd. (002273.SZ); Zhejiang Huace Film & TV Co., Ltd. (300133.SZ)
Translatd by Vanessa Chen and Jennifer Lu