KEEP CALM AND UPGRADE YOURSELF
In such gloom, it is no surprise that some companies are starting to feel the pinch, but Fan Jianping, chief economist at the State Information Center, sees changes in the industrial sector as evidence that innovation and entrepreneurship are new growth engines in the making.
High-end manufacturing already stands out from a somewhat dilapidated crowd. Output of new-energy automobiles jumped by 280 percent in May, industrial robots by 130 percent and smart TV production expanded by 60 percent.
China is no longer satisfied with low-value products. A national plan -- "Made in China 2025" -- will help the country rebrand itself as a high-tech, high quality, cost effective manufacturer along the whole industrial chain, said Vice Minister of the Ministry of Industry and Information Technology Liu Lihua.
It is a focus on innovation has allowed some Chinese companies -- smartphone manufacturer Huawei being a case in point -- climb the value chain.
Founded on a shoestring budget in 1987, Huawei reported profits of 27.9 billion yuan in 2014. In that year, spending on research and development (R&D) accounted for 2.1 percent of China's GDP, a record high. In some regions, such as Shanghai, that figure reached 3.6 percent.
China still has great potential in many industries -- equipment manufacturing, e-commerce, Internet finance, new energy and environmental protection -- according to Justin Yifu Lin, former chief economist of the World Bank, who believes 7 percent growth could be beaten this year.
There is still a lot of room for manufacturers to upgrade themselves, and this, according to J.P. Morgan China chief economist Zhu Haibin, will be where the future of the Chinese economy lies.
