Recovery of industrial economy seen steady

China's industrial economy is expected to maintain a steady recovery momentum this year on the back of factors like rebounding domestic demand, a series of favorable government policies encouraging industrial production and brisk expansion of high-tech equipment manufacturing, experts said.

Their comments came after data from the National Bureau of Statistics showed on Wednesday that China's industrial output, a gauge of activity in manufacturing, mining and utilities, grew 4.6 percent year-on-year in 2023. The figure rose 6.8 percent year-on-year in December after a 6.6 percent growth in November.

NBS data also showed the output of equipment manufacturing recorded a year-on-year growth of 6.8 percent last year, 2.2 percentage points higher than that of overall industrial output.

Output of solar cells, electric vehicles and power generating equipment jumped 54 percent, 30.3 percent and 28.5 percent year-on-year, respectively, during the period.

Wang Guanhua, an NBS spokeswoman, said at a news conference on Wednesday that the equipment manufacturing industry played a key role in promoting the steady recovery of the industrial economy last year, while new growth drivers have become an important engine bolstering China's high-quality economic development.

The recovery of industrial production picked up pace last year, mainly fueled by the sustained rebound in domestic demand, gradual improvement in the operating conditions among industrial and manufacturing enterprises, and a series of supportive policies that helped drive recovery of the industrial economy, said Zhou Maohua, an analyst with China Everbright Bank.

New growth drivers that cover equipment manufacturing, solar cells, electric vehicles and other high-tech manufacturing segments continued to grow at a good clip, which has provided solid support for the growth of China's industrial output, Zhou said.

He said the country's industrial economy will likely maintain a good recovery trend this year.

The tone-setting Central Economic Work Conference in December stressed efforts to promote industrial innovation through sci-tech innovation, and in particular called for measures to forge new industries, models and impetus with disruptive and cutting-edge technologies.

Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, said emerging industries, enterprises' intelligent transformation and digital infrastructure have become new engines bolstering growth of the industrial economy.

He emphasized the significance of developing the high-end manufacturing sector, which is playing an increasingly key role in bolstering technological innovation, safeguarding the stability of industrial and supply chains, and helping the country gain competitive advantages on the global stage.

More efforts should be made to step up policy support in the form of tax cuts, land and electricity supply for advanced manufacturing enterprises, to alleviate their pressure and channel capital into the manufacturing sector, he said.

Promoting technological innovation and increasing capital input are crucial for the growth of the high-tech manufacturing industry, said Li Dongsheng, founder and chairman of consumer electronics maker TCL Technology Group Corp.

China's manufacturers should transition from exporting products to exporting industrial capacities, ramp up localized operations abroad and speed up their layouts in overseas markets, so as to cope with changes in the global economic landscape and rising trade protectionism, Li said.

Denis Depoux, global managing director of market consultancy Roland Berger, said: "Technology and innovation are key to bringing disruptive changes to the Chinese economy. We have seen China leapfrogging in some new areas, such as EVs (electric vehicles), energy storage, photovoltaics and wind power."