Industry is the ballast stone of the national economy. Since the beginning of this year, industrial production has maintained a relatively fast growth rate, becoming an important force supporting the recovery and improvement of China's economy.

The latest data released by the National Bureau of Statistics show that in the first half of this year, the value added of the industrial sector above a designated size grew by 6% year-on-year, which is 2.2 percentage points higher than the growth rate of the same period last year. Among them, the value added of the industrial sector above a designated size in June grew by 5.3% year-on-year, a decrease of 0.3 percentage points from the previous month.

Tang Weiwei, Director of the Industrial Statistics Department of the National Bureau of Statistics, stated that the industrial economy has been running smoothly and positively in the first half of the year. However, it is also necessary to recognize that the current external environment is complex and severe, domestic effective demand is still insufficient, the growth rate of industrial production has slowed down since the second quarter, the profitability level of enterprises remains relatively low, and there are certain challenges in the continuous recovery and improvement of the industrial economy.

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Tang Weiwei emphasized that in the next phase, the requirements for high-quality development should be integrated throughout the entire process of new industrialization. Efforts should be made to transform the mode of development, adjust the structure, improve quality, and increase efficiency. Efforts should be made to expand effective investment in the manufacturing industry, accelerate the formation of new quality productive forces, and continuously consolidate and enhance the positive trend of the industrial economy.

High-tech manufacturing industry leads the high-end direction.

In the first half of the year, the value added of the industrial sector above a designated size across the country grew by 6.0% year-on-year, with the first and second quarters growing by 6.1% and 5.9% respectively, continuing the relatively fast growth trend since the fourth quarter of last year.

Among the three major categories, the value added of the manufacturing industry grew by 6.5%, which is 0.5 percentage points higher than the growth rate of the industrial sector above a designated size; the value added of the electricity, heat, gas and water production and supply industry grew by 6.0%, which is the same as the growth rate of the industrial sector above a designated size; the mining industry grew by 2.4%.

In terms of external demand, the cumulative growth rate of industrial product exports has been accelerating month by month. In the first half of the year, the export delivery value of industrial enterprises above a designated size across the country grew by 3.3% year-on-year, which is 0.3 percentage points faster than the growth rate from January to May, and the cumulative growth rate has been accelerating month by month throughout the year. Looking at the quarters, the export delivery value of industrial enterprises above a designated size in the second quarter grew by 5.2% year-on-year, which is 4.4 percentage points faster than the growth rate in the first quarter, and has maintained an upward trend for five consecutive quarters since the second quarter of 2023.

Looking at the industries, the "ballast stone" role of the equipment manufacturing industry has been further strengthened. In the first half of the year, the value added of the equipment manufacturing industry above a designated size grew by 7.8% year-on-year, which is 1.8 percentage points higher than the growth rate of the industrial sector above a designated size; the proportion of the value added in the industrial sector above a designated size is 33.3%, which is 1.5 percentage points higher than the first quarter. Among the main equipment manufacturing industries, the electronics and automotive industries have grown rapidly, with growth rates of 13.3% and 9.8% respectively, contributing nearly 30% to the growth of the industrial sector above a designated size in the first half of the year, and are an important force driving industrial growth.

The pace of high-end, intelligent, and green development of the manufacturing industry has accelerated. In the first half of the year, the value added of the high-tech manufacturing industry above a designated size grew by 8.7% year-on-year, which is 2.7 percentage points higher than the growth rate of the industrial sector above a designated size, and 1.2 percentage points faster than the first quarter; the proportion of the value added in the industrial sector above a designated size is 15.8%, which is 0.6 percentage points higher than the first quarter. Among them, the electronics and communication equipment manufacturing industry, and the aerospace and equipment manufacturing industry have achieved double-digit growth, with growth rates of 12.5% and 10.0% respectively.The digital product manufacturing industry empowers intelligence. In the first half of the year, the added value of digital product manufacturing industries such as communication terminal equipment manufacturing, integrated circuit manufacturing, and display device manufacturing saw double-digit growth, with growth rates of 18.0%, 16.5%, and 16.3% respectively. The production of major digital products such as integrated circuits, service robots, liquid crystal display screens, smartphones, and industrial robots all grew rapidly, with growth rates of 28.9%, 22.8%, 19.1%, 11.8%, and 9.6% respectively.

The spokesperson for the National Bureau of Statistics stated that as the foundation of the real economy, the continuous expansion of the manufacturing industry scale, the steady increase in its proportion, and the continuous optimization of its structure, along with the enhanced security of important industrial chains and supply chains, are not only a highlight of the economic operation in the first half of the year but also an important support for stable growth in the second half of the year.

The aforementioned spokesperson said that China is currently in a critical period of transforming its development model, optimizing its economic structure, and switching its growth drivers. Observing China's economic development should not only focus on the "quantity" of economic growth but also on the "efficiency" of transformation and the "quality" of development. In the first half of the year, the transformation towards "new" and "green" industries has become more evident, with the added value of high-tech manufacturing accounting for 15.8% of the total industrial added value, an increase of 0.6 percentage points from the first quarter. Intelligent and green new products such as integrated circuits, service robots, new energy vehicles, and solar cells have shown impressive performance, with their production maintaining double-digit growth, accumulating new momentum for economic development.

Industrial growth continues to strengthen

Looking at the monthly situation, the industrial added value in June grew by 5.3% year-on-year, slowing down by 0.3 percentage points from the previous month, marking two consecutive months of deceleration.

Wang Qing, the chief macro analyst at Orient Gold & Credit Rating, analyzed that considering there were two fewer working days in June this year compared to the same period last year, and the manufacturing production base was relatively high in the same period last year, the deceleration of industrial and manufacturing production growth in June is in line with general expectations. Looking at the marginal growth momentum, the industrial added value increased by 0.42% quarter-on-quarter in June, which is significantly weaker than the seasonal growth rates in previous years, and also has a certain drag on the year-on-year growth rate of industrial production for the month.

Compared with the growth rates of investment and consumption in the same month, the actual growth momentum of industrial production in June is still relatively strong. In the first half of this year, the cumulative growth rate of industrial added value was 6.0%, of which the growth rate of manufacturing added value was 6.5%, significantly higher than the cumulative growth rates of fixed asset investment and social retail sales in the same period, highlighting the "strong supply, weak demand" characteristic of the macroeconomy. The main reasons behind this are the strong export momentum in recent times, the continuous advancement of the "three major projects," large-scale equipment updates, and the renewal of durable consumer goods, as well as the support policies for the manufacturing industry, such as increased credit to the manufacturing sector, which will have a certain pulling effect on industrial production.

In the context of weak demand, the national capacity utilization rate of large-scale industrial enterprises in the first half of the year was 74.3%, a decrease of 0.1 percentage points from the same period last year, but it has shown a clear improvement in the second quarter. The national capacity utilization rate of large-scale industrial enterprises in the second quarter of this year was 74.9%, an increase of 0.4 percentage points from the same period last year, and an increase of 1.3 percentage points from the first quarter.

Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, believes that the capacity utilization rate of the domestic industrial sector is at a reasonable level. With the continuous recovery of domestic industrial demand, the inventory of the industrial sector is expected to improve, and the policy support will remain strong. The overall operating conditions of the industrial sector will continue to improve, and the output expansion of high-tech manufacturing is expected to maintain stable industrial output, with continuous structural optimization.

Regarding the trend of industrial economy in the next stage, Wang Qing said that looking forward to the third quarter, the higher base in the same period last year will have a certain impact on the year-on-year growth rate of industrial added value in the second half of the year, but the actual growth momentum is expected to remain relatively strong. This is due to the continuation of strong domestic and foreign demand in the short term, and as the pandemic's scarring effect gradually fades, there is still room for repair in consumer goods consumption. It is estimated that the year-on-year growth rate of industrial added value in July will rebound to around 5.5% as the base decreases, and the annual growth rate of industrial production will also reach around 5.5%, significantly accelerating compared to the cumulative growth level of 4.3% in 2023, which is basically in line with the overall economic growth level. This also means that the economic operation this year will further return to normalization.Recently, the State Council Information Office held a series of themed press conferences on "Promoting High-Quality Development". Regarding how the policies for stable industrial growth will be intensified in the next phase, Jin Zhuanglong, the Minister of Industry and Information Technology, said in response to a question from the First Financial reporter that efforts will continue to implement the ten major industry stable growth work plans, encourage and support large industrial provinces to "take on the main responsibility", further expand effective investment in manufacturing, put more effort into optimizing the development environment for manufacturing enterprises, and consolidate and enhance the upward trend of the industrial economy.

Jin Zhuanglong told the First Financial that it is necessary to implement and refine the implementation plan for equipment updates in the industrial field, promote the renewal of advanced equipment, digital transformation, the promotion of green equipment, and the improvement of inherent safety levels. The Ministry of Industry and Information Technology is also implementing high-quality development actions for key manufacturing industry chains, accelerating the implementation of major national science and technology projects and key national research and development plans, promoting the formation of more tangible work volumes, and achieving more symbolic results. It is necessary to continue to leverage the role of the National Manufacturing Transformation and Upgrading Fund, the Integrated Circuit Industry Investment Fund, and the Small and Medium Enterprise Development Fund, to lead and drive social capital towards key areas and weak links in the construction of modern industrial systems, and to seize the high ground of future technology and industrial development.