CHINA China seeks to boost industrial chain resilience amid COVID-19 strains

CHINA

China seeks to boost industrial chain resilience amid COVID-19 strains

Xinhua

20:07, April 22, 2020

workshop.jpg

Staff members work at a workshop of Skyworth in Guangzhou, south China's Guangdong Province, Feb. 10, 2020. (Photo: Xinhua/Deng Hua)

BEIJING, April 22 (Xinhua) -- Work has restarted in most Chinese firms, but more needs to be done to reinforce the country's industrial chain resilience as challenges from demand deficiency and imported cases of the novel coronavirus disease (COVID-19) remain.

To reboot the Chinese economy fast without triggering a second wave of the COVID-19 outbreak, local enterprises and industry regulators have all been fully engaged in a nationwide drive aiming to firm up industrial chains.

The early results came out better than expected. About 84 percent of small- and medium-sized enterprises (SME), the most sensitive to weaker consumer demand, had restarted work as of April 15, according to the Ministry of Industry and Information Technology (MIIT).

Among them, firms in the secondary industries saw the highest work resumption rate, followed by those in the production service sector and then the consumer service sector.

The purchasing managers' index (PMI) for China's manufacturing sector re-entered the expansion zone in March by firming up to 52 from 35.7 in February, official data showed.

Despite the signs of recovery in manufacturing activities, Chinese firms, especially the micro ones, are facing mounting uncertainties and challenges amid the global spread of COVID-19.

BACK INTO GEAR

How are the breakthroughs made in returning to work when epidemic prevention and control becomes a regular practice?

The answer is synergy-seeking by encouraging top enterprises to lead SMEs along the industrial chain in work resumption, according to the MIIT, while upstream and downstream firms along the same industrial chain are working in coordination to foster growth momentum, tapping domestic and overseas markets together.

Over 400,000 SMEs have resumed production following the reopening of nearly 100 top firms and over 7,600 of their core business partners, MIIT data showed.

Key areas including materials for epidemic control, life necessities, spring plowing and products for international supply chains as well as labor-intensive industries were the most targeted during the progress, said the MIIT.

Amid efforts to uplift the resilience of industrial chains and further unleash the work resumption potential, Chinese firms are also cranking up critical supplies in response to the global COVID-19 fight and wobbled global supply chain.

Since the outbreak, many Chinese manufacturers of apparel, electronics and cars changed their production line for face mask supply in just weeks, which also relied much on stable and flexible supply chain.

MOVE TO DIGITAL

Due to anemic global demand, more Chinese enterprises have to shift their focus to the domestic market, and nurturing domestic demand thus becomes more essential. An unfolding trend on the business front is accelerating digitalization to boost new types and upgrades of consumption emerging from epidemic control.

For the e-commerce sector, a cloud platform which combined 5G and virtual reality has been built to offer a panoramic virtual shopping experience for consumers staying indoors. It will be applied in nearly 100 commercial enterprises across the country, said the MIIT.

Digital measures are also underway to enable the development of SMEs whose demand for work resumption and growth transformation are much greater.

The use of information technology can help SMEs better equipped in epidemic control and allow them to get back to operation as soon as possible, said Qin Zhihui, deputy director of the small and medium-sized enterprises bureau of the MIIT.

Growth of new modes such as online office and online education have been speeded up, which will help expand the production modes of service-oriented manufacturers, making shared manufacturing and personalized customization more popular.

On top of building digital platforms to help SMEs unclog the supply chains and connect financing resources, digital transformation will be promoted among qualified firms to realize lean production and agile manufacturing, Qin said. Enditem

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