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China urges firms to 'harness strengths'

By Zhong Nan | China Daily | Updated: 2020-03-25 09:28
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Employees work on the toy production line at a factory in Huaibei, Anhui province.[Photo by Wan Shanchao/For China Daily]

Experts: Industrial cluster advantages can help offset economic sluggishness

Manufacturers from China will leverage the inherent advantages of the country's industrial clusters to gain more export orders and combat economic sluggishness due to the COVID-19 outbreak across the world, officials and industry experts said.

The comments came after the Ministry of Commerce urged Chinese companies to achieve an early transition from "resumption of production" to "the full recovery of the entire industry chain to reach production" last week to help partner economies sustain business.

Such a move will help China better prevent risks from the weak global market demand and readjust the export thrust by shipping more medical equipment, medicines, negative pressure ambulances, disinfection robots and other daily necessities to overseas markets battered by the outbreak, said Wei Jianguo, vice-chairman of the China Center for International Economic Exchanges.

Wei said the government must establish a data platform to gather information about overseas market orders and explain the policy environment to China's export-oriented companies, as many countries have suspended factory operations and canceled orders due to the outbreak.

"China has the world's most complete industrial system with the most diversified sectors and vigorous domestic demand," said Pang Xingjian, senior vice-president of Schneider Electric China, adding the epidemic and its recent impact on factory business will push more Chinese companies, especially small and medium-sized enterprises, to focus on digital transformation for robust growth.

About 67 percent of the country's key import and export firms had recovered nearly 70 percent of their production capacity by last week, data from the Ministry of Commerce showed.

To facilitate the manufacturing sector's production resumption, the government has resorted to policy tools such as export tax rebates and export credit insurance for foreign trade firms and introduced measures to help them secure orders and maintain market share, said Jiang Fan, an official at the ministry's foreign trade department.

While many industries are suffering these days, Denis Depoux, managing director of market consultancy Roland Berger in China, said the entire risk management industry, from insurance to auditing, stands to gain from the crisis.

"Medical equipment manufacturers and their supply chains including raw materials like plastic, pulp and paper, and rubber, will see increased demand beyond the crisis, in China and across the world," he said.

Eager to put its foreign trade growth on a firm footing, China will strengthen financial support to its border and cross-border economic cooperation zones to create better condition for companies to resume production, as well as foster fresh momentum for foreign trade growth, said a circular jointly unveiled by the Ministry of Commerce and the Export-Import Bank of China on Tuesday.

Government departments and policy banks will provide guidance and financial support to companies operating in border and cross-border economic cooperation zones and resolve urgent issues such as ensuring capital turnover and broadening the financing channels to ensure smooth operations of their industrial and supply chains, and to minimize the impact from the COVID-19 outbreak.

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