Xi Yanchun (Host):

Good morning, ladies and gentlemen, welcome to today’s State Council policy briefing. This week, the State Council executive meeting decided to implement plans regarding equipment manufacturing industry standards and quality improvement as well as Internet plus circulation. To help you better understand the policies, we are glad to have Tian Shihong, head of the Standardization Administration and party member of the General Administration of Quality Supervision, Inspection and Quarantine, and Wang Bingnan, assistant minister of Commerce, to give introductions and answer your questions. Now, Mr. Tian, please.

Tian Shihong:

Good morning, ladies and gentlemen. First, on behalf of the General Administration of Quality Supervision, Inspection and Quarantine and the Standardization Administration, thank you for your attention and support for the work regarding equipment manufacturing industry standards and quality. On April 6, 2016, the State Council executive meeting passed the plan regarding equipment manufacturing industry standards and quality improvement. The plan will be issued to the public in a few days. Now, I’m going to give you a brief introduction about the plan.

Equipment manufacturing industry is a basic and pillar industry for economic and social development and a cornerstone to improve China’s comprehensive national strength. Standards are the core element of equipment manufacturing industry’s technology and quality, and a major tool of industry management. Forging advanced manufacturing industries with high standards is an important part of structural reforms, especially supply-side reform, which helps improve supply, increase demand, and promote medium-to-high end manufacturing industry. President Xi Jinping said that efforts should be made to promote the transformation from “made in China” to “created in China”, from “China speed” to “China quality”, and from “Chinese product” to “Chinese brand”. Premier Li Keqiang stressed that improvement of product quality and service standard is the key to maintaining medium-high economic growth. Efforts should be made to improve the national technology standard system, use advanced standards to urge upgrades of “Made-in-China”, and boost consumers’ confidence in Made-in-China products and promote international competitiveness by improving manufacturing industry’s quality and efficiency. According to the circular issued by the State Council regarding the “Made in China 2025” strategy, along with the National Development and Reform Commission and State Administration for Science, Technology and Industry for National Defense, the plan was created by the General Administration of Quality Supervision, Inspection and Quarantine，Standardization Administration，and Ministry of Industry and Information Technology, aimed at giving guidance to local governments while implementing the strategy to improve standards and quality of equipment manufacturing industries.

Tian Shihong:

From the perspective of standardization and quality improvement and in consideration of cross-industry, cross-region, and technology factors, in order to implement the “Made in China 2025” strategy, we put forward two phased targets, five years per period. By 2020, standard systems of industrial foundation, intellectual manufacturing and green manufacturing will be improved, transformation rates of international standards in key areas will be increased to more than 90 percent, and the quality of major equipment will reach or approach world-class levels. By 2025, the standard system of equipment manufacturing industry integrated with service industries will be improved, and the international clout and competitiveness of equipment manufacturing standards and quality will be dramatically improved, promoting the transformation of China from a big manufacturing country to an advanced one renowned for its product quality.

First, the plan aims to promote innovation of equipment manufacturing standardization and quality, strengthen integration between standardization and technology innovation, boost compatibility between military standards and civil standards, cultivate group standards, improve enterprise standardization and quality innovation ability, and boost industry development and technology innovation. It also eyes standardization and quality improvement regarding industry foundation, intellectual manufacturing, and green manufacturing.

The important thing is to enhance the standard test and verification system, as well as data accumulation; improve the reliability and life span of the products. To accelerate the construction of intelligent manufacturing standard system, we must ensure the cross-industry integration standard play its supportive and leading role in the development of industries. We need to stress a green manufacturing standard system, promoting energy conservation and carbon reduction.

Third is to standardize and improve quality in ten key fields: information technology, advanced numerical control machine and robots, aerospace equipment, marine engineering equipment and high-tech ship, high-tech rail transportation, energy saving and new energy vehicle, electric power equipment, agriculture machinery equipment, new material, advanced medical equipment.

Fourth is to accelerate the internationalization of equipment manufacturing standards, make comparative analysis of such standards and translate foreign ones in the manufacturing industry. We need to promote Chinese equipment, technology, products and services in the overseas market.

The plan made specific requirements from various aspects and specifically mentioned to further improve standardized services.

The standardization and quality of equipment manufacturing involves many departments and fields. I hope you can give more attention, support, promotion and advice. Let’s make the plan a successful one.

Thank you.

Xi Yanchun:

Next let’s invite Wang Bingnan.

Wang Bingnan:

Good morning friends from the press. I’m glad to attend today’s policy briefing. I’ll introduce related situations of Internet plus circulation.

The CPC Central Committee and the central government attaches great importance to the use of the Internet in the circulation. The State Council executive meeting presided by Premier Li Keqiang on April 6 decided to promote Internet plus circulation to increase domestic demand. It was pointed out at the meeting that Internet plus circulation is an important measure to promote circulation reform, mass entrepreneurship and innovation. It can also drive consumption and employment. The move includes seven major tasks.

First, accelerate the transformation and upgrading of circulation. Support enterprises to develop omni-channel business and experience consumption.

Second, promote circulation innovation, encourage the development of sharing economy and collaborative economy, and support the development of an innovative circulation bases.

Third, strengthen the infrastructure construction of an intelligent circulation. Develop an intelligent logistics distribution to promote coordinated developments of e-commerce and logistics.

Wang Bingnan:

Fourth, encourage expanding new fields concerning intelligent consumption, establish an intelligent circle with the integration of online and offline business, improve the ability to integrate resources and attract consumption, speed up the construction of special business demonstration areas, and improve the supply of intelligent products and services.

Fifth, strive to develop green circulation and consumption, promote green products, carry out demonstrations to publicize green shopping stores, enhance the innovative model of Internet Plus Recycling and carry out publicity activities relating to the green concept.

Sixth, further promote e-commerce in rural areas, improve online sales of agricultural products, encourage e-commerce enterprises to expand markets in rural areas and urge all market players to integrate logistics resources in rural areas.

Seventh, actively enhance e-commerce’s entry into residential communities, sparing no efforts to develop e-commerce in the communities, improve the availability of information and standardize community business, and build and improve a life service network to increase convenience for residents’ consumption.

The Internet Plus Circulation action plan also put forward five measures to ensure the smooth implementation of the seven tasks, including innovating service system, exerting the guiding influence of financial resources, strengthening the support capacity of public services in the circulation sector, improve circulation regulations and rules, and create a fair and competitive environment.

The Ministry of Commerce, along with all the departments concerned, will guide local governments to make specific implementation measures according to requirements from the State Council.

Xi Yanchun:

Thanks, Mr Wang and Mr Tian, for your introductions. Now, for questions. Please state which media outlet you are from before asking your question.

China Radio International:

I have two questions. The first one is for Mr Tian. Just now you mentioned that this plan is deemed as a follow-up policy for the “Made in China 2025” strategy. Could you please elaborate on how it will complete the follow-up role? My second question is for Mr Wang. The executive meeting of the State Council on April 6 mapped out the Internet Plus Circulation plan and stressed breaking the bottleneck in information infrastructure and cold chain transportation, including reducing the rent for physical stores. What measures will the Ministry of Commerce take to ensure the implementation of these requirements?

Tian Shihong:

Thank you for your question. The State Council’s executive meeting on April 6 stressed following up on the “Made in China 2025” strategy while adopting the proposal to upgrade the standard and quality of the manufacturing industry. The “Made in China 2025” strategy is a framework document and a guidance to strengthen the manufacturing industry and its overall deployment targets and tasks. To complete those targets and tasks in the strategy, special work plans from related sectors and fields need to be mapped out as supportive measures.

Actually, the plan, closely connected with the “Made in China 2025” strategy, aims to standardize the equipment manufacturing industry and improve the quality of products. This plan was made in accordance with the objectives, big projects and important tasks in the “Made in China 2025” strategy.

The first, development objectives. The development objectives of the “Made in China 2025” strategy, is that China will strive to top the list of big manufacturing countries in 10 years. The objective of this plan will be achieved in two phases, with five years as a cycle. The plan proposes to basically perfect the standard system, such as industrial foundation, intelligent manufacturing and green manufacturing. The quality level of key equipment will reach or be close to the advanced international level by 2020. We need to have a relatively sound, standard system to effectively meet the objectives put forward in the “Made in China 2025” strategy, since the industrial chain of the manufacturing industry is long.

Second, big projects. Several key designs have been put forward in the “Made in China 2025” strategy and in this plan, specific projects, such as a strong industrial base, intelligent manufacturing and green manufacturing, were also proposed in meeting the designs’ requirements. For example, in meeting with the basic standards and quality improvement, we have to accelerate to make standards for “four basics”, which includes core basic components, advanced basic techniques, key basic materials and industrial technological basis. This “four basics” was put forward in the “Made in China 2025 strategy”, and some standards in urgent need have to be formulated as soon as possible. Meanwhile, efforts should be strengthened in studying and testing the industrial standards to promote the standardization of the industries of “four basics” To standardize the intelligent manufacturing and quality improvement, we have to innovate the mechanism and enhance system building. International exchanges and cooperation also should be paid attention to and efforts should be made in the trial projects and the quality technological upgrades. We have to improve the green manufacturing standard system and promote the standardization of energy conservation and emissions reduction.

Third, Key areas. The plan gives outlines in the 10 areas specified in the “Made in China 2025” strategy. In the new age of information technology field, the plan proposed to accelerate the improvement of the standard system for integrated circuits and enhance the research of key technological standards, such as the intelligent terminal wearable devices. More effort should be made to formulate standards in the area of high-end numerically-controlled machine tools and robotics. In aerospace equipment, the standards for intelligent manufacturing should meet international requirements to satisfy international cooperation. We pay a lot of attention to aerospace standards, and the Chinese system building in aerospace standards is advanced.

We will step up in developing standards for key techniques in marine engineering equipment, high-tech ships, railways, urban rail transit, fuel-efficient and new energy vehicles, as well as electronic equipment.

According to the “Made in China 2025” strategy, we also ask for standards on agriculture techniques to go with the new agronomy. We will enhance the coordination between military and civilian sectors in standardization in the new material fields and strengthen China’s international competitiveness in high-performance medical devices.

In general, the “Made in China 2025” strategy serves as an overall plan while the other serves as a special one where joint work will be performed in major programs and in key areas. Both will help complete work in standardization and quality enhancement for equipment manufacturing.

Wang Bingnan:

In the State Council executive meeting this week, Premier Li stressed the importance of overcoming the difficulties in developing the information facilities and cold chain transportation when implementing the “Internet Plus Circulation” action plan.

China’s information infrastructure and logistics construction is not very good, so the government has introduced a series of policies on it. The Ministry of Commerce has established some joint distribution pilot projects in cities and began constructing a cold chain circulation for agriculture products. The National Development and Reform Commission, and the Ministry of Industry and Information Technology also took measures to solve the problem. With efforts made by all departments concerned, positive changes have been made in information infrastructure and logistics construction.

But we still face some hard bottlenecks in developing the information facilities and cold chain transportations.

In the next step, we will speed up efforts to establish the Internet of things and forge the intelligent logistic system. We will make the following four major measures to overcome the current difficulties:

First, accelerate the broadband construction in rural areas by facilitating faster and more affordable Internet connections. Promote the coordination development between e-commerce and logistic express industries. We will tackle the problems in the delivery traffic and the last distribution process.

Second, we will support circulation enterprises. We will establish cold storage houses in major agricultural production areas and the cold chain circulation system for agriculture products. Finally, we will step up the standardization of the cold chain for agricultural products.

Third, we will strive to promote the establishment of intelligent logistic system, enhance the utilization of cold chain facilities, develop multilevel public logistics information service platform, and integrate the business services cloud platform.

Fourth, we will launch a non-vehicle operation carrier pilot, permitting legal persons possessing no vehicles to develop a transportation service. We will integrate dispersed resources, reduce the empty running rate and improve logistical effectiveness and efficiency.

It is also a crucial issue when it comes to cutting down rent of physical stores when carrying out the “Internet Plus Circulation” plan.

Wang Bingnan:

In the domestic trade circulation field, renting a retail store takes up nearly 30 percent of all the operation costs. In recent years, the rent has been rising at an increasing speed of 20 percent year-on-year on average, twice the increase speed of the sales. The increased rent brings much pressure for the store owners. The State Council paid great attention to this issue and has released several documents on the supply of commercial facilities. For example, it released a No 39 document in 2012 on deepening circulation system and speeding up the development of the circulation industry, which regulated that in a community area, newly-built commercial and comprehensive service facilities should take up no less than 10 percent of the total area in the community.

In the next step, we will strictly carry out the document, and prior guarantee the construction of commercial facilities with public properties such as agricultural trade market, vegetable markets, housekeeping, seniors caring and recycling industries. In order to satisfy the basic needs of people’s livelihood, the Ministry of Commerce will work with other departments to learn successful experiences, and construct the markets of public properties and take various beneficial measures to reduce the rent of retail stores.

China Daily:

Mr Tian, as we have learned from what the Premier always stressed that government should pay more attention to the providing services instead of setting obstacles, how will the plan lead enterprises to take up new standards and promote the upgrade of the whole manufacturing industry?

Tian Shihong:

Based on the new development concepts of innovation, coordination, green, opening up and sharing, we mainly considered these issues when compiling the document.

First, upgrade the model of standardizing innovation and quality management. Strengthen the basic foundation of the setting measures, standards, and inspect the work to guarantee the comprehensive demonstration and international mutual recognition and providing a technical support for the transferring of innovation findings in equipment manufacturing industry. Set up pilot zones for the promotion of the standards, encourage innovation and revolution and provide specific technical solutions for the enterprises. These measures will upgrade the basic ability of the internationally recognized four kinds of quality technologies: providing technical support and services for enterprises’ development and the progress of industries.

Second, further deepen the reform of standards. Premier Li Keqiang stressed at the State Council executive meeting that the mandatory standards should be strictly set, and in the other aspects, the market will play a decisive role. According to the regulation, we combined the three standards (mandatory standard, industry standard and local standard) into one nation-level mandatory standard. The mandatory standard is set in accordance with the standardized work plan that was released last year. It is mainly limited in aspects of personal safety, national safety, ecological environment safety and people’s health safety.

As for the other aspects, standards should be set with market demands. The government should also pay attention to the revision work of the standards and shorten the revision cycles. We will rely on the mandatory standard and large number of suggestive standards to lead the development of industries.

Tian Shihong:

Third, promote reform in the management system for enterprises’ standards. First, the record for enterprises’ product standard will be gradually canceled, as it increases the burden on enterprises and restricts their innovative development. Second, we plan to set up a new system to bolster the innovative development of enterprises. The system is about the publicity of enterprises’ announcement and supervision upon the will of enterprises themselves, which is in accord with Premier Li’s requirement of transferring from “setting thresholds” to “providing services”. Third, a public service platform on the information of enterprises’ standards will act as a supporting measure. The platform is built at both the national and provincial levels, in which enterprises can make public their product standard and service standard. The platform started trial operations in January 2015. By April 7, more than 25,000 enterprises have announced their standards, with a total of over 80,000 announcements being publicized. Fourth, we also have one measure that is to encourage every region and department to roll out technique training and skill service on the standards and quality management of enterprises and provide technical consultation for enterprises on standardization and quality, with tailored technical solutions.

In the past, it took up to 15 days for an enterprise to make public its product standards through the record system. Now, with the use of an online public service platform, it only takes 20 minutes to release an announcement. The platform can be accessed anytime on any day, which not only breaks the setting of threshold but also provides services.

Tian Shihong:

We also learned that the implementation of the system provides convenience for medium and small-sized enterprises. On one hand, through information consultation, enterprises are able to find their products’ position in the industry. On the other hand, the system allows enterprises to transfer their innovative achievement into standards and strengthen the competitiveness of their products and services.

Fourth, cultivate and develop a group standard. It is a standard way to come in line with international standards.

In our current national standard system, there are only national standard, industry standard, local standard and enterprise standard. But the new measures added the group standard, in order to enable industry associations, academic associations and intermediary agencies to play their role in the making of standards to better stimulate market vitality. Social groups with legal person status and professional technological abilities can make group standards according to market and innovation needs.

We encourage the making of group standards to better enable social groups to make their technological contributions in building our standard system. And meanwhile, we will continue to improve group standard-related systems and measures, especially how social groups are making group standards. And we will take some guiding measures to encourage a third party to evaluate their conduct and technological level in making group standards. Government departments will also strengthen monitoring and assessment during and after the formulation of group standards, thus gradually forming some rules to guide social groups in making group standards and better practice standard work.

Fifth, enhance cultivation of talent. We will increase the standardization and quality awareness of management and technological staff working with equipment manufacturers. We will speed up our pace in nurturing the workers’ craftsmanship spirit, which will push them to always strive for the best. And we will explore the talent cultivation mechanism jointly set up by enterprises, universities and scientific research institutions to accelerate the cultivation of talent with high-level standards and quality.

I believe that through our joint efforts, measures in the plan to boost innovation, better services, and talent cultivation will encourage enterprises to adopt advanced standards, respond to market needs and promote upgrading the entire manufacturing industry.

China National Radio:

You just mentioned efforts will be made to push forward the development of e-commerce in rural areas. Many e-commerce giants shift their focus to rural areas considering first and second-tier cities are already saturated. What about the e-commerce development in rural areas? What will the Ministry of Commerce do to boost rural commerce?

Wang Bingnan:

It is a hot topic. They key of the “Internet plus circulation” is to develop e-commerce in rural areas, which is also an important method to improve the modernization of rural circulation, solve the agriculture issues and alleviate the poverty. Premier Li Keqiang mentioned developing rural e-commerce in his Government Work Report this year.

Since 2014, central authorities have formulated a series of supporting policies, and many local governments also take e-commerce as an important engine to drive the development of “regional economy” and create favorable conditions for rural e-commerce. E-commerce giants like Alibaba Group Holdings Ltd, JD.com Inc and Suning Commerce Group have strengthened their layouts in rural areas. So far, there are over 30,000 agricultural websites, in which 3,000 websites are referred to e-commerce. The online transactions in rural areas reached 35.3 billion yuan in 2015, up 96 percent year-on-year, and the online sales for agricultural products came up to 15.05 billion yuan, with 56.59 million rural netizens and 1.18 million newly increased online stores.

We could see there are some problems related to rural e-commerce. First, the rural infrastructure is very weak; especially the Internet speed, it’s very slow. Second, the talent specialized in rural e-commerce is of shortage. Third, the standardization and competitiveness of agricultural brands are not strong. Finally, the rural market order is irregular.

The next step is to promote the rural e-commerce development from three aspects. First, improve the weak link and break limitations on the industry development. The Ministry of Finance and Ministry of Commerce will continue to deepen the promotion of rural e-commerce and solve issues on logistics distribution as well as unifying the various resources at the county levels to open up the channels for logistics. Second, to strengthen rural e-commerce’s driving effect towards increasing income for farmers, and focus on the upward channel which brings agricultural products from rural areas to cities; to effectively integrate the industrial development offline with e-commerce development online to promote the branding and standardization of agricultural products which will in turn increase income for farmers. Third, to foster competition and invigorate the vitality of market players and encourage market players in different regions to achieve innovative development with the emphasis on the talent training of rural e-commerce and reinforce resources coordination and sharing.

Xi Yanchun:

That’s all for today’s policy briefing. Thank you.