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Premier stresses mechanism innovation in demonstration areas

Updated: Jul 21,2017 8:10 AM

The goal of setting up the national demonstration areas for Made in China 2025 is to explore new system and mechanism towards faster development of the manufacturing sector, Premier Li said at the State Council executive meeting on July 19.

One of the major tasks is to continue deepening reform of streamlining administration, delegating power to lower level governments and optimizing services.

Many entry requirements in the manufacturing industry and weak market supervision meant high costs for enterprises in market entry. Once they entered the industry, they will cut corners to make up for previous high costs.

The Premier called for efforts to speed up manufacturing licensing system reform and pay more attention to supervision during and after production.

The business system reform makes it easier now to register a company, whereas the business licenses should be integrated as soon as possible, in a way to attract social capital investment in manufacturing, he said.

The Premier also stressed that enterprises should offer stock incentives for technology and management staff and favorable policies for overseas talents so that they can devote themselves in the manufacturing sector with more energy and hope.

The organizational structure of manufacturing enterprises has changed profoundly, the Premier said.

In the past small enterprise clusters in South China offered support for northern large enterprises. Now they are experiencing integration, Premier Li said.

More and more enterprises seek integration development with different sizes of enterprises, in some places the practice was encouraged, he said.

However, as related policies could not meet the need of such transformation and reform, he called for efforts to innovate system and mechanism, and break down barriers hindering the development of the manufacturing sector.

Premier Li stressed that a major task for governments at all levels in setting up demonstration areas is to establish platforms for enterprise integration and cluster development.

Successes drawing from these demonstration areas and the connection of such areas will drive the transformation and upgrade of the entire manufacturing sector, and bring great hope for Made in China 2025, said the Premier.

The meeting decided to better use all kinds of government and industrial funds, thus gaining more support for advanced manufacturing from social capital.

Premier Li stressed that the government should explore new experiences rather than following old mindset in implementing “Made in China 2025” strategy.

“We used to set up industrial funds and give support for the enterprises entering relevant industries. But some of these industries are competitive in nature,” said the Premier.

Government should focus on strengthening guidance over strategic and forward thinking issues while promoting the fair competition and health development of related industries in those competitive fields through abiding by the market rules, said the Premier.

If the government continues its former practice of focusing only on industries, it might achieve little and cause blind competition and excess capacity, he added.

The government should focus on establishing platforms for enterprises, said the Premier. What is important is not about how much money the government has allocated but how to set up a good platform, and adopt the market means by using little money to leverage big money and attract more social capital to invest in advanced manufacturing.

Currently, five State-owned commercial banks have all set up inclusive financial departments and their branches also need to speed up efforts in offering inclusive financial services, said the Premier.

Inclusive financial services can be first tested in those new demonstration areas to enable advanced manufacturing sector, especially micro and small enterprises, to enjoy inclusive financial support, said the Premier.

“We need to be forward looking. Many micro and small enterprises two or three years ago have now grown into big enterprises,” said the Premier.

Better inclusive financial services will gain more momentum for China’s sustainable economic development.

Premier Li stressed that Made in China 2025 doesn’t mean not buying foreign products. Domestic and foreign enterprises enjoy same policies and “we will work with more foreign enterprises, learning their technologies and purchasing their equipments”, said the Premier.

The new national demonstration areas must be open to the country and the wider world, the Premier said.