2007 CHINA’S 2007 CHINA’S INDUSTRIAL DEVELOPMENT REPORT——The Status quo and Analysis of China’s Industrial Development Performance
Chapter 1
Overall Analysis of Industrial Economy Performance
During the 10th Five-year Plan period，China has sustained rapid industrial development；industrial economy performance improved significantly，industrial profits and personnel labor productivity doubled。Due to the rapid expansion of investment in fixed assets and the rising proportion of the heavy and chemical industry，contradiction between supply and demand of fundamental-industries products such as energy and raw materials，increased sharply。Factor cost on resource product prices，labor wages and capital increases year by year。Due to price inflation and production expansion，sales and profits of coal，oil and gas，steel and chemicals industries contribute to over 50%of the total industrial profits。Profits of final goods such as electronic communications products and transportation equipment manufacturing，fell significantly as a result of price inflation of upstream products and sales price deflation of products。Through strategic restructuring，the number of state-owned and state-holding enterprises reduced significantly，with scope of business to focus on fundamental-industries and constantly expanding in scale，they achieved significant profit growth，reversing the status that economic benefits of state-owned and state-owned industrial enterprises was lower than that of private enterprises and foreign-funded enterprises（i。e。contractual joint ventures；
cooperative ventures and solely foreign-funded enterprises）。Total energy consumption grew rapidly and simultaneously with industries during the 10th Five-year Plan period，calculated by comparable price，energy consumption of every 100 million CNY industrial added value，merely dropped by 1.34%。The low efficiency of energy use is a result of no effective adjustment of industrial structure and low efficiency of energy use of SMEs（small and medium-sized enterprises）in resource-intensive industries，in the process of rapid growth of total energy consumption。During the 10th Five-year Plan period，the environmental control has achieved remarkable success，the downward trend of main pollutant emission intensity was continuing，but to achieve the 11th Five-year Plan’s targets of conserving energy and reducing emissions，we are still faced with arduous tasks。
Chapter 2
International Competitiveness of China’s Manufacturing Industry
Since the reform and opening up，the international status of China’s industries reflected by export growth rate and exports continued to improve。In particular，the performance of China’s manufacturing industry is prominent in international trade and now China has become an important trade surplus of the world，reflecting China’s industrial products with strong international competitiveness。Analysis indicates that the comparative advantage and competitive advantages of China’s manufacturing industry are upgrading，in which is a major factor the increase of competitive advantage。China currently is undergoing an upgrade of the industrial structure，competitive industries is transforming from the traditional labor-intensive industries to capital-intensive and technology-intensive industries。And that industrialization in China is entering a new stage of heavy and chemical industrialization，whether the heavy and chemical industry could further enhance international competitiveness will determine the basic development trend of international competitiveness of China’s industries。In this stage of development，
the upgrading of international competitiveness of China’s industries is faced with severe challenges of resources and environmental。Only when China’s industries and enterprises no longer rely mainly on the large inputs of low-cost resources and the neglect of environmental protection to achieve the low price products advantage，and is able to maintain and continually enhance its international competitiveness，can China prove that its industry international competitiveness is of inherent nature and sustainable。Therefore，it is China’s core strategic task of the new stage of industrial development to maintain and further enhance the international competitiveness of China’s industries with higher standards on resource conservation and environmental protection。
Chapter 3
Comparison of Regional Industrial Development Performance
This chapter has given a complete comparative and systematic analysis about the economic performance，social benefits and ecological environment benefits of industries in East，Northeast，Central and West China，and 31 provinces and cities in China since the 10th five-year plan from 2 different layers。The analysis shows that，in recent years the industrial performance has been generally improved in China，but there still exists great regional difference。Even the index of industrial economy performance is not as simplified as what people usually think：“the eastern is higher while the western is lower。”For example，the ratio of industrial added value and overall capital output ratio in East China is the lowest among the four regions in China，cost margin and personnel labor productivity is lower than that in Northeast and West China。From social benefits of the industries，the average wage increases of industrial workers in eastern China is of in the nation’s slowest，industrial growth mainly depends on the support of labor-intensive industries，the proportion of R＆D staff to all employees of large and medium-sized enterprises is of the lowest in the four regions。More importantly，there is still problems in China’s industrial development such as high consumption of energy and resources，large emissions of“three wastes”，
extensive economy growth mode，low technology level of products，the ability of self-innovation is not strong，serious disharmony among economic performance and social benefits and environmental benefits。Therefore，we must follow the concept of scientific development，strengthen industrial resource conservation and environmental protection，to develop the recycling economy，and continuously improve the ability of self-innovation，and promote the comprehensive improvement of industrial performance。Firstly，to control the overall situation with the concept of scientific development，to firmly establish the review of comprehensive benefits including economic performance，social benefits and environmental benefits；
secondly，to guide the regions’positioning in accordance with its main function，constant optimization of the regions’industrial structure，develop industry chain of leading edge，and develop characteristic economy vigorously in order to facilitate the regions’economy gradually shifting to the way of characteristics，specialization，intensive and advancement；thirdly，we must foster a scientific view of achievements，establish a scientific government evaluation index system；fourthly，to explore and establish a scientific evaluation index system，to give a comprehensive evaluation of social benefits in the industrial investment projects and industrial development；fifthly，highly emphasized ecological and environmental benefits，and actively promote the eco-industrialization of the regions，so that the development of recycling economy and environment-friendly economy will become a bottom-up conscious action，a pattern of growth，a social responsibility and a built-in mechanism。
Chapter 4
Performance of Industrial Organization
China’s industrialization access S to a new phase of rapid growth of the heavy and chemical industry，the total economy output and industrial scale keep steady and rapid expansion year after year。To a certain extent，industrial growth relies on the resources support，the large and fast-growing consumption of resources and raw materials，the problem of industrial organization unreasonable and the non-economic scale of production plant has become increasingly prominent。Corresponding to the above mentioned issues，the State formulated industrial organizing policies of improvement of the market access as the core。To eliminate backward production capability，optimize order in competition，to strengthen coherence between the industrial organizing policy and the financial policy，fiscal policy，technology policy and trade policy，a new pattern of industry organization began to emerge，
benefits of industry organization improve to a certain degree。This chapter，with the use of statistical data of all state-owned and large non-state-owned enterprises，analyzes China’s industrial organization and the changes and trends of China’s industrial organization and industrial benefits through changes in the indicators of scale and benefits of the scale enterprises，large and medium-sized enterprises，state-owned and state-holding enterprises。In order to speed up the overall change of the problems including low technical level of China’s industrial organization，unreasonable labor division，serious constraints of resources and environmental，we must deal with the relations between the government and the market，the central and local，and optimize the systematic conditions of resources and environment use，strengthen and improve the industry-incentive-oriented organizing policies，focus on cultivating competitive large enterprises and enterprises groups，and actively guide SMEs into the development system of large enterprises and large conglomerates，to promote the development of new professional collaboration system of labor division among large，medium and small enterprises。
Chapter 5
Performance Analysis of Industrial Fixed Assets Investment
The performance of industrial fixed assets investments can be analyzed from two aspects。One is the stimulating of the investment itself to the economy；the other is the effect of the investment throughput on industrial economy and resources environment。Since the 10th Five-year Plan，according to the investment increasing and the index of investment’s effects of the whole society and fixed assets，the tendency of fixed assets efficiency and benefits decreases，and at the same time has bad effects on excess-capacity and ecologic environment。But according to the index of microeconomic performance，China’s industrial enterprises face increasing demands of the market。Not only does the tendency of industrial investment’s return increase obviously，but also the return exceeds Japan in the corresponding period。Indeed，the rate of private enterprises’net profits before tax is close to that of the manufacturing industries of USA。
The concurrent complexion of low efficiency in macro economy and the high performance in micro economy can explain the great divarication about the understanding of excess-capacity among the state decision-department，local government and enterprise in a certain extent。The report said that，under the environmental conditions of lack of property rights clarity in the existing factor market and distort of pricing mechanisms，the high-margin of enterprises investment to some extent，is based on loot of factor price and social wealth transfer，enterprises’private cost can not reflect the actual social cost。Therefore，it is a very necessary for the government to focus on the social control of enterprises production and operation，adjust and improve the basic pattern of industrial investment in terms of the concept of scientific development，forcing the community to bear its responsibilities by controlling unreasonably high-profit margins of the capital。
Chapter 6
The Labor Efficiency
Entering the 21st century，China’s industrial enterprises labor productivity has sustained rapid growth；labor efficiency has been greatly enhanced providing the impetus to a sustained industrial development。From the whole industries，labor productivity growth should be mainly attributed to the increase of various industries’labor productivity and the growth effect contributed by the changes of factors in the employment structure is small。This shows that it has achieved important results for the Chinese industrial enterprises to significantly increase labor productivity by increasing the level of automation，reducing labor inputs，improving workforce quality and improving the management。However，compared to that of the major developed countries，China’s industrial enterprises labor productivity level is still very backward，and not even comparable to some medium-developed countries。China’s industrial enterprises still need to raise the level of labor productivity。In order to improve labor productivity of industrial enterprises，for one thing，we need to raise the added value of products；on the other hand，we should rapidly and comprehensively enhance the quality of labor so that human resources will play a greater role in the production of added value。
Chapter 7
Benefits of Resources Utilization and Environmental Management
Over the past 30 years，China’s industrial has developed very quickly and has become one of the world’s major energy consumption countries，consumption of partial resources are among the highest in the world，import dependence increased，although the ecological environment in some areas has improved，but the overall trend continues to deteriorate，as a result environmental and resources constraints in the face of China’s industrial development have become increasingly serious。It is an urgent need to solve the major problem in China’s economic and social development process to effectively ease the resource and environmental constraints on industrial development，improve resource utilization efficiency and strengthen environmental management。The relationship between China’s industrial development and resources as well as environment has not yet entered a virtuous circle。During the 10th Five-Year Plan period，the energy intensity rises，