China’s emerging industries－information, manufacturing, biology, environment management and digital technology－will each attain an output scale of around 10 trillion yuan ($1.4 trillion) by 2020, according to the Plan on Strategic New Industries During the 13th Five-Year Plan (2016-20) released by the State Council on Dec 20.
The plan states that the added value of these industries will increase from 8 percent of GDP in 2015 to 15 percent by 2020, creating 1 million jobs each year on average.
According to the research by Wuhan-based TF Securities, the compound annual growth rates of these five industries will be around 20.8 percent in the next five years, if the annual GDP growth rate stays around 6.5 percent.
The plan says that high-end equipment manufacturing and new materials industries will have output of 12 trillion yuan by 2020.
A report by the National Manufacturing Strategy Advisory Committee shows that, in 2015, high-end equipment manufacturing registered 6 trillion yuan in revenue, accounting for 15 percent of domestic equipment manufacturing. It is estimated that this percentage will rise to 25 percent by 2020, which means that high-end equipment manufacturing will become a pillar industry in the national economy.
Li Wei, director of the Development Research Center of the State Council, said that although the overall scale of emerging industries is still small, the growth rates are higher than conventional industries.
“The technology-intensive and high value-added new industries are key to adjusting the supply side to a more diversified and higher level demand. Also, they are going to eventually replace the output in industries with overcapacity, most of which is outdated capacity,” said Li.
In the first quarter this year, the new industries grew by 10 percent year-on-year, 4.2 percentage points higher than the growth rate of all industries.
According to the plan, by 2020 more than 30 new materials in key areas will be industrialized and take up 70 percent of the domestic market. In particular, the plan emphasizes “breakthroughs in the application technologies of graphene.”
According to TF Securities, graphene, the lightest and strongest material ever discovered, widely used in cables, batteries, military devices and energy storage, is ready for industrialization. It will become an important area to which capital flows in the next few years.
The plan states that the goal of increasing the applications of new energy and low-carbon industries should have output of more than 10 trillion yuan by 2020. The annual sales of new energy automobiles in 2020 is put at 2 million units, with total sales of more than 5 million units in the next five years.
In the next five years, the output of new energy automobiles will increase at an average rate of 50 percent, according to Yuanda Securities Co Ltd.