Project coordinator & report writer: Yang Jianlong

Research Report No 52, 2001

I. Production of Industries

In keeping with the comprehensive analysis and horizontal comparison of the growth indicators of various industries in 2000, such as the annual industrial output value, industrial added-value, product sales revenue and major product output, the production growth of key industries can be classified into four categories.

Fast-growing industries	electronics & telecommunications equipment, post & telecommunications, petrochemicals, medical and pharmaceutical production, tourism, textile and garment industry
Industries with moderate growth	household appliances, automobiles, machinery, construction materials, iron & steel, real estate, electricity, railway and transportation
Slow-growing industries	tobacco and construction
Industries with negative growth	coal mining

Compared with 1999, most industries reported faster production growth in 2000, though at different paces. In light of the changes in the production growth of different industries, the key industries covered by this study can be classified into three categories (we used the comparable data concerning the quarterly production of different industries and lots of expert assessments in order to minimize the impact arising from the cyclical fluctuations of production).

Industries with accelerating growth	petrochemicals, tourism, real estate, electricity, iron & steel, construction materials, textile & garment industry, medical and pharmaceutical production and railway transportation
Industries with steady growth	construction, electronics & telecommunications equipment, post & telecommunications, household appliances, automobiles, tobacco, machinery and transportation
Industries with declining growth	coal mining

Among the key industries, petrochemical industry reported the most conspicuous growth in 2000. Statistics indicate that the industry posted an industrial added-value of 398.7 billion yuan in the year, which was 30% growth over the 1999. The growth rate nearly doubled, 23 percentage points higher than the projected 7% annual growth. Sales revenue totaled 1,326 billion yuan, or 12.9% higher than the previous year. Profit was 108 billion yuan, a record high of the industry. The major improvement in the economic performance of this industry was primarily due to the implementation of a series of state macro policy measures, which effectively pushed up the growth of consumption, investment and exports. Second, the reorganization and restructuring of the petroleum and petrochemical corporate groups began demonstrating advantages. In particular, the successful listing of the two groups on international markets brought along a strong impetus to the changes in the mode of corporate operations. In addition, the higher prices of petroleum and some petrochemical products on the domestic market, driven up by international oil price hikes, also played an important part in realizing the rapid growth and better efficiency of the entire industry.

Electronic and information industry continued the trend of fast growth. In 2000, the industry’s total output value was 30% higher than that in the previous year. The growth rate was also slightly higher. Of the three major categories of electronic products, telecommunication products and investment products thrived in both production and sales, and became the principal force to push up the growth of the entire industry. In particular, the sales of cellular phones posted 140% growth, computers and software products reported 0.9% growth, and color TV screens, electronic components and integrated circuits also grew more than 40%. In addition to the fast-growing domestic demand, the quick recovery in export growth was most fundamental for the phenomenal growth of the industry. Statistics indicate that boosted by on export rebates and other state policies, the exports of electronic products in 2000 totaled USD 55.2 billion, 42% higher than the previous year. This effectively spurred the fast growth of the entire industry.

In the year 2000, pharmacy continued to maintain considerable growth. Statistics show that the total output value of the pharmaceutical industry grew 20% in the year, 6 percentage points higher over the previous year. The industrial added-value was 22% higher than that of 1999, 12 percentage points higher than the national average, ranking the third highest among all industries.

The overall performance of the automobile industry in 2000 was excellent, boasting a relatively high growth. According to statistics, 2.069 million automobiles were produced nationwide, 13.1% higher than 1999 and striking the highest growth rate since 1994. Specifically, the output of trucks totaled 764,000, basically at the same level of the previous year. Passenger vehicles totaled 700,000, 37.8% higher than 1999, and was the main growth point of the industry. The output of cars was 605,000, 7% higher than the previous year. In terms of models, heavy-duty trucks continued to lead the growth, rising by 74% over the previous year. The outputs of light trucks and mini trucks remained basically at the same levels of 1999, while that of medium-sized trucks was 16.8% less than the previous year. In the category of passenger vehicles, light, mini and medium-sized units all posted strong growth. Mini vehicles reported the largest growth of 42.2%, followed by light vehicles with a growth rate of 34.8%, both constituted the main driving force for the output growth of passenger vehicles.

Iron and steel was one of the industries that experienced drastic fluctuations in 2000. In the first half of the year and especially in the second quarter, iron and steel products were in great demand and dramatic price fluctuations occurred to some products. As a result, the iron and steel production rebounded to some extent and the output of iron and steel products posted considerable growth. In the third quarter, as the market and prices gradually became stable, the vigorous growth of the metallurgical industry was dampened. The growth picked up again in the fourth quarter. According to statistics, the outputs of the main products of the iron and steel industry nationwide were 34.39 million tons for steel, 34.31 million tons for iron and 35.62 million tons for finished steel products. The growth rates were 4%, 8.8% and 13.4% respectively. Throughout the year, the total steel output was controlled within 110 million tons with increased export and import substitution deducted. It is worth noting that while the iron and steel industry posted fast growth, product structure also improved. The plate-sheet ratio reached 34.8%, rising by 2.3 percentage points, while the plate-pipe ratio rose to 42%, 3 percentage points higher. Of the steel products, those in oversupply, such as small-sized products and wire rods, recorded a growth rate lower than the average of all steel products. On the other hand, the products in short supply on domestic market, such as large and medium-sized products, grew 39.9% and 17.2% respectively, both higher than the average.

The construction materials industry entered a period of fast growth in 2000, pushed by rising real estate investment and other factors in the second half of the year. Statistics indicate that the total output value of the entire industry reached 239.24 billion yuan, 11.5% higher than the previous year. The industrial added-value was 83.97 billion yuan, 14.4% higher than 1999. The sales revenue stood at 288.12 billion yuan, rising by 12.5%. Among the main building materials, cement totaled 580 million tons, up 3.9%, while plate glass totaled 180 million weight-crates, increasing by 2.9%.

In 2000, the construction industry maintained a steady growth. The output value totaled 1,175.92 billion yuan with growth rate reaching 5.4%, 1.8 percentage points higher than the previous year. But if compared with the growth in the preceding decade, this growth remained low. The fast growth in real estate investment was the main factor for the steady growth of the construction industry. Compared with that in the eastern and central regions, the growth in the western region was the fastest. According to statistics, the total output value of the five provinces and autonomous regions of Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang rose by 17.1% in 2000, far higher than the national average. It is worth noting that affected by the slow recovery of the construction market, increasing intense competition and the relevant state policies, the performance of the construction industry further polarized. Some large key enterprises and specialized market-oriented enterprises did much better in terms of revenue, profit, tax contribution and productivity. They were the main contributors to the higher output and better efficiency of the construction industry.

As from the first half of 2000, a fast growth trend appeared in the electricity industry due to the overall improvement of the economic situation. It was expected that power generation nationwide in the year was 1,350 billion KWH, 9.5% higher than that in 1999. Specifically, hydro, thermal and nuclear power generation rose by 12.7%, 8.7% and 8.2% respectively. At the same time, electricity demand of the entire society rebounded rapidly. Power consumption continued to grow at a two-digit rate in the second half of the year, on the basis of more than 10% rise in the first half. Power consumption of the entire society in the year totaled 1,326 billion KWH, 9.7% over the previous year. This was also a strong growth. Industrial enterprises, especially some power-consuming large and medium-sized state-owned enterprises, were the main sources for the fast growth of power consumption of the entire society. Statistics indicate that industries accounted for 72% of all the electricity consumed and contributed 70% to the growth of social power consumption. In addition, the reduction and exemption of power consumption subsidies, the consolidation of rural power prices, the reduced prices of the rural household power consumption and the sharp rise of fuel prices all contributed to the fast growth of the demand in the power market.

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