Hu Kaihong:

Ladies and gentlemen, good morning! Welcome to this SCIO press conference. Today, we are honored to have Minister of Industry and Information Technology Miao Wei here to share with you information on stabilizing industrial growth and restructuring the economy, and then take your questions. Joining him at this press conference are Mr. Feng Fei, vice minister of industry and information technology, and Mr. Zhang Feng, spokesperson and chief engineer of the ministry. Now, I will give the floor to Minister Miao.

Miao Wei:

Good morning, dear friends from the press, ladies and gentlemen.

First I would like to extend my gratitude to every media friend for your care and support of the work undertaken by the Ministry of Industry and Information Technology. Let me give you a brief introduction about current industry situation. To be specific, it is about how to look at the current industry situation in the context of the "new normal." We have given you background materials to offer a large amount of information and data. I would like to briefly speak about "how to look at the overall picture."

From 2015, the economic environment, both at home and abroad, has been severe and complicated. The pressure of the downturn in the industry is growing. With the firm leadership of the CPC Party Central Committee and the State Council, the industrial sector has adhered to the general principle of making progress while ensuring stability. On the one hand, we focus our job on transforming and upgrading traditional industries; on the other hand, we nurture and strengthen new emerging industries. We will try our best to stabilize growth and steadfastly push forward the "Made in China 2025" plan. So the industry generally maintains the steady development trend, as shown in four aspects:

First, the speed of industrial growth has been kept within a proper range. In 2015, China's industrial added value above designated size grew by 6.1 percent, a slower rate compared to the two-digit growth rate in past years. However, considering the changes in domestic and foreign circumstances, 6.1 percent growth is still in the reasonable range of industrial operation. Put it under the international environment, we can see since the financial crisis, demand from international markets has shrunk; by last year, the global trade growth rate had been lower than the general economic growth rate for four consecutive years. As a result, China's exports declined significantly. In 2011, China's trade in goods export grew by 20.3 percent from a year ago, but in 2012, the growth rate slipped to 7.9 percent and has continued dropping ever since. In 2015, China's industrial products' exports saw a negative growth rate of 1.8 percent. By looking at the domestic situation, we can see the restrictions on resources and the environment grew tighter, and the prices of labor, raw materials and land are all rising. In such circumstance, it is unnecessary and impossible to blindly pursue high-speed growth. While looking at the structural adjustment, we found that due to replacing business tax with a value-added tax, some businesses gradually moved out of industrial operations;R&D design, brand marketing, logistics and purchase, they were all gradually forming a relatively independent industry. This is a result of the social division of labor changing. While looking at the operational situation of industry, industrial added value above designated size in the four quarters of 2015 grew by 6.4 percent, 6.3 percent, 5.9 percent and 5.9 percent on a year-on-year basis. The quarterly fluctuation range was not more than 0.5 percent. Looking at the regions, we found the growth of the industrial added value above designated size in 19 provinces was higher than the nation's average growth rate. Through analysis, we found the provinces suffering a big drop in growth rate were those that have a large share of energy, resources and heavy industry in their economy. All in all, 2015 was a very tough year, but we held on and overcome the pressure of downturn, and kept up the steady operation of industry.

Second, the industry restructuring has made positive changes. Traditional industry is still the leading industry in China, and is the significant foundation for the new industry to develop. We are now focusing on work in the following areas: First, strengthening technology transformation. During the 12th Five-Year Plan, China invested 37.5 trillion yuan worth of technology-transforming fund - less than 8 trillion yuan per year on average, but still 2.7 times more than the 11th Five-Year Plan. However, in last year alone, the investment for technology transformation was 9.5 trillion yuan, much higher than the average number. Enterprises' technology transformation can get a slew of new technologies, techniques and new equipment into operation and promote the development level of the entire industry. Second, cutting the outdated industrial capacity. During the 12th Five-Year Plan, we cut outdated iron-making capacity of 91 million tons, steel production capacity of 94.8 million tons, electrolytic aluminum 2 million tons, concrete 640 million tons and plate glass 160 million weight cases. The mechanism where market helps phase out excess capacity is taking shape. Third, industry realized energy conservation and emission reduction. By the end of the 12th Five-Year Plan, the unit energy consumption and water consumption in industrial value added decreased by 25 percent and 35 percent respectively compared with the end of the 11th Five-Year Plan, and the targets for restricting the emission of pollutants were overfulfilled. Forth, we implemented three strategies of the "Belt and Road" initiative, the Yangtze River Economic Zone, and Beijing-Tianjin-Hebei Province coordinated development. The industrial arrangement has seen a further optimization by complementing each other's advantages and making gradual progress.

Third, integrated innovation has witnessed a surge in new industry. This represents the future development direction and is the hope for the future. First, the innovative system is taking shape for manufacturing technologies with enterprises as the principal body and with functions integrated in regard to production, study, research and use. Industries of new generation of information technology, high-end equipment manufacturing, new materials, new energy automobile and more are growing fast. In 2015, the high-tech industry's industrial added value grew by 10.2 percent, 4.1 percent faster than the growth of the entire industry. We have some important accomplishments, such as the 28-nanometer integrated circuit was put into large-scale production, and the first C919 large passenger aircraft reached the final assembly stage. In other areas, high-speed trains and nuclear equipment have gone global, for example, and the output of new energy vehicles approached 500,000. Second, the integration of informationization and industrialization has made solid progress. The informationization of key industries has entered a new phase of integrated application. Through hard work in recent years, the popularization rate of digitization designs for large-and-medium-sized enterprises rose 23.5 percent. And the popularizing rate of digital control of technological process of key technologies in main industries is more than 70 percent. Third, the Internet economy is moving ahead of the global rate, information consumption is rapidly expanding; the new formats of mobile Internet, Internet of things, cloud computing, big data and more have become the new engines of growth.

Fourth, the enterprise development environment, particularly for small and micro companies, has significantly been improved. Streamlining administration and delegating power, easing restrictions and strengthening regulation where necessary, and improving services have created both vitality and power in their development. One example is that, last year we strengthened management of enterprise-related fee-charging. This measure alone has reduced the burden on enterprises by more than 110 billion yuan. Another example is that the policy of halving the corporate income tax for eligible small and micro companies cut their tax liability by nearly 100 billion yuan. Besides, we twice reduced the electricity price for industrial enterprises, thus cutting their electricity costs by more than 60 billion yuan. Last year, we established a national development fund for medium and small enterprises with a total scale of 60 billion yuan. The number of entrepreneurial bases for small enterprises has exceeded 1,700, with more than 120,000 enterprises having settled down and more than 4.2 million jobs provided. All types of entrepreneurial gathering areas, small and micro businesses' entrepreneurial bases, and service platforms enjoy vigorous development. At the same time, large enterprises have continuously improved their competitiveness. Last year, 56 Chinese manufacturing enterprises ranked among the world's 500, 11 Chinese engineering machinery enterprises were among the global top 50, four Internet companies gained a ranking in the global top 10 according to market capitalization, and two integrated circuit design companies were rated among the global top 10.

While acknowledging our achievements, we are clearly aware that there are many difficulties and problems needing to be solved in the country's industrial development. One example is that severe overcapacity exists in some industries, and, at the same time, a large number of key equipment, core technologies and high-end products await a significant breakthrough. Another example is that, some consumer demand, featured with huge purchasing power of Chinese consumers, cannot be effectively met at home, so they have to go overseas to shop or use online shopping channels from overseas producers. All these are the problems we are facing.

The development of China's manufacturing industry has reached a critical juncture as it moves from merely being big to strong. In spite of the great difficulties, challenges and downward pressures, China's positive economic fundamentals and long-term trajectory remain unchanged, the basic characteristics that China's economy has strong resilience, great potential and ample room for maneuver has not changed, the strong support and conditions for sustained economic growth are unchanged, and the forward movement of the country's economic restructuring and upgrading remains unchanged. These are four "no-changes" we can clearly identify. China has the world's most complete industrial system and industrial supporting capability. More than seven million university graduates emerge every year as representative of the new generation of the national labor force with knowledge and skills, creating new vitality. All these have provided comprehensive advantages and strong potentials for the sustainable industrial development. China's economy is still in an important period of strategic opportunities which can achieve a great deal. China's industry will play an important supporting and leading role in comprehensively building a moderately prosperous society.

The above is a brief introduction to the situation. Now, my colleagues and I would like to take the questions from you.

Hu Kaihong:

Thank you, Minister Miao Wei. Now let's move on to the questions. Please give the names of news agencies you represent before asking questions.

CCTV:

Minister Miao has told us how to understand the current situation of industry. You said that there is a rather heavy downward pressure. What will your ministry do to ensure industry can achieve steady growth and structural adjustment? Thank you.

Miao Wei:

We believe that if we can stabilize industrial growth, the general economic situation can be stabilized, and if our industry grows stronger, our nation becomes stronger. General Secretary Xi Jinping has pointed out that the real economy is fundamental to a country, and industry provides the foundations for national development. Premier Li Keqiang has also required us to promote the transformation and upgrading of the manufacturing industry, push it to an advanced level in the global industrial chain, and ensure it can play a more effective role as a pillar industry in the economy.

Last year, the State Council began to implement the "Made in China 2025" and "Internet+" strategies. This was an important deployment the Communist Party of China (CPC) Central Committee and the State Council made to shape a bright future for the manufacturing industry. Since last year, the State Council has also taken a series of policies and measures favorable for industrial growth, structural adjustments and increased benefit.

You may notice that recently, eight ministries, including ourselves, issued several documents on letting the financial market support industrial growth, structural adjustment and creating more benefits.These policies and measures have begun to produce effects, and industry's downward trend has been curbed. We are firmly confident in this regard.

In 2016, we will follow the CPC Central Committee's plan and adopt the development approach featuring innovative, coordinated, green, open and shared development. We will promote structural reform on the supply side and further implement the "Made in China 2025" strategy. We will reduce production capacity, inventory, leverage level and costs. We will address all weak links, promote innovation, achieve stable growth, adjust the overall structure, promote transformation and increase benefits. We will strengthen and improve traditional advantages, accelerate development momentum, and strive to promote the sustainable, healthy development of industry. Specifically speaking, we will work in the following five aspects.

First, start to implement the "Made in China 2025" strategy in all aspects. First, we are working on the implementation plan of 11 key projects, programs and action plans, including the big program the State Council announced on May 19, 2015. Second, we are promoting five major projects in five areas, including establishing a manufacturing innovation center, promoting intelligent manufacturing, strengthening the overall industrial base, promoting green manufacturing and promoting high-end equipment innovation. For example, this year, the project to strengthen the industrial base will develop 30 to 50 significant products and technologies to address problems we have identified. Third, we are formulating the guiding opinions on how to combine the "Made in China 2025" with "Internet+" strategies, so as to closely integrate the manufacturing industry, "Internet+", mass entrepreneurship and innovation. Fourth, we will continue to develop further supporting policies.

I must say that currently, there are still many policy tools at our disposal. When the situation of the industrial sector changes, we will submit them to the State Council for approval and announce new policies and measures in time to keep industry growing steadily.

Second, we are striving to stabilize industrial growth. Following the central authorities' plan and requirements, we will focus on structural reform on the supply side. Specifically speaking, we will focus on the following tasks. First, we will develop guiding opinions on using different policies in six major industries, which is also known as the three-year action plan. Second, we will start a new round of major technology upgrading projects. A batch of major projects will be implemented to transform and upgrade traditional industries. Third, we will implement a specific action plan to improve the supply of consumer goods. A strategy will be implemented to increase product variety, improve product quality and create famous brands. Efforts will be made to help enterprises to cope with market changes more easily. Fourth, we will encourage the adoption of green construction materials, steel structures and aluminum extrusions in all fields and promote the usage of new-energy cars. Yesterday, the State Council studied the development of new-energy cars and publicized a news release.

Third, we are working resolutely to solve the problem of excess production capacity. First, we will vigorously deal with "zombie enterprises." We are working with the National Development and Reform Commission to develop specific plans. Second, we are promoting the exit of low-efficiency production capacity. The production capacity of enterprises unable to meet the requirements of energy efficiency, environmental protection, safety and production standards should be phased out according to laws and regulations. Third, we are encouraging capable enterprises to make mergers and adjust corporate structure in different industries and regions. Fourth, we firmly refuse to approve any projects likely to increase the production capacity of industries with excess capacity.

Fourth, we will continue to work harder to promote the development of small and micro enterprises.

Fifth, we will continue to streamline administration, delegate power and upgrade service. We will unleash the vitality of enterprises by reforming the government.

To summarize, we are confronted with significant challenges and problems this year, but we have already had responding plans. The details can be found in the materials we have provided. That's briefly what I want to say.

Reuters:

It is reported that the central government is arranging special funds to cut excess capacity, especially in the steel industry. It is also reported that you are going to provide tens of billions of yuan to help local governments solve these problems. Can you give us an exact number of the funds and explain how they will be used, either in personnel placement or for other uses? Another question is about the recently-published Provisions on Internet Publishing Service. It is not clear to us how to identify which foreign companies are subject to these provisions. Does it cover our foreign news agencies or other foreign companies? Thank you.

Miao Wei:

The first question relates to the work in the charge of Vice Minister Feng Fei. I'd like to invite him to take the question. The second one goes to Chief Engineer Zhang Feng. Let's start with Mr. Feng.

Feng Fei:

Thank you for your question. The Central Economic Work Conference held at the end of last year clarified the work to facilitate structural reform on the supply side, which is, as you know, cutting capacity, inventory and costs, de-leveraging and making up for any deficiencies. Cutting capacity is a task of top priority for structural reform on the supply side. It involves joint efforts by the National Development and Reform Commission and the Ministry of Industry and Information Technology to facilitate the removal of Zombie companies and an orderly disposal of excess capacity. A Zombie company refers to a failing company that is in the situation of shutdown, semi-shutdown, deficits year-by-year or insolvency and continues to operate with support primarily from central government subsidies and renewed bank loans. At the very beginning of this year, the State Council decided to carry forward the work mainly in the steel and coal industries, as they both face very severe excess capacity and more obstacles in market-based exit. Therefore, guiding opinions were published in January to soak up excess capacity in these industries and help them out.

During the process, we are guided by the general principles of restructuring under market pressure, organization by local governments and support from the central government. We primarily focus on proper handling of staff placement when restructuring. Since such withdrawal and capacity cutting involves unemployment, we give more emphasis to merging and reorganization and less to bankruptcy liquidation in dealing with Zombie companies. To solve the problem, the central government decided to set up a two-year special subsidy fund of 100 billion yuan (US$15.31 billion) for industrial companies' structural adjustment in the aspects of staff placement, job transfer and skills training. Restructuring also involves assets disposal, where market-orientation should be employed in disposing non-performing assets. Thank you.

Zhang Feng:

Thanks for the question from that reporter. Internet publishing is in the charge of the State Administration of Press, Publication, Radio, Film and Television. As for your question, the Ministry of Industry and Information Technology, as the authority in charge of the Internet industry, licenses and puts on record Internet information services businesses primarily pursuant to the Regulation on Internet Information Service.

Those who are going to be engaged in Internet publishing service activities should obtain a license from the administration of Internet publishing service business before going through related formalities at the telecommunication administrations of related provinces, autonomous regions or municipalities. The Ministry of Industry and Information Technology will cooperate with related departments to promote a sound development of Internet publishing service business and safeguard the legal rights and interests of consumers. Thank you.

Ta Kung Pao:

Minister Miao mentioned in his remarks that a great many Chinese citizens have swept clear overseas markets with bulk purchases and these cases can be spotted many times in news headlines. Therefore, how should we view this phenomenon? What if those people shop around and purchase at the overseas markets as a result of their gratification for qualities and brands of the overseas products? Then how should we improve the manufacturing and brand building abilities of Chinese products? Besides, according to the Ministry of Commerce, consumption now contribute more than 60 percent to the growth of the gross domestic product (GDP) as national economic growth has been successfully transformed to be driven by domestic demand. Therefore, my question is how can Chinese manufacturing keep up with the pace of its consumption. Thanks.

Miao Wei:

Thanks for your question. I have noticed such media coverage. My colleagues and I visited the research institute affiliated to the China National Tourism Administration to investigate the case. According to the administration, outbound travel by Chinese citizens in 2015 totaled 120 million visits with their consumption reaching US$104.5 billion, increases of 12 and 16.7 percent year on year. We also learned from the administration about overseas consumption, consisting of food, accommodation, transport, visits and shopping. We particularly paid attention to overseas shopping in addition to the other four factors that are indispensable costs during overseas travel. For example, crowds of Chinese headed to Japan during the three-day holiday starting from May 1 last year to buy toilet seats which they later found were manufactured in Hangzhou, capital of China's southeastern Zhejiang Province. But they flocked there for brands that represent the quality and have won customer trusts; meanwhile, Chinese products and prices are less appealing to customers.

Secondly, there are products, such as, the processed commodities from agricultural byproducts that are less expensive in overseas markets for various reasons. So, price is another factor in addition to quality. Let's take milk powder for example: the price in overseas markets may not be necessarily higher than those of the domestic market. I believe many media friends have travelled abroad. I don't know whether you have ever purchased milk powder overseas. However, by comparing the price of milk in the supermarkets both home and abroad I discovered that many brands are cheaper overseas than those provided by Chinese supermarkets. Milk serves as the major ingredient of milk powder.

Thirdly, the way of consumption for the Chinese citizens is much influenced by the close relationship within big families. Many people are going abroad for the first time in their lives. Therefore, they are more willing to spend on specialties and local products as presents for their relatives and friends.

Now, let me answer your second question. Consumption plays an increasingly important and apparent role in driving the growth of the national economy. During the ongoing economic development, personal incomes have grown obviously. The primary factors influencing consumption in the much less affluent period were the limited supply and the comparatively low prices. With the growing number of middle class in China, prices have given way to the consideration of quality, brand and personal pride. Therefore, we need to adapt to the changes in consumption by pressing ahead with supply-side reform so as to meet the increasing material and cultural demands of our people. As an industrial ministry, our major task is to satisfy people's material demands. As I have just mentioned, we are going to take three years to improve product variety and quality and the brand building abilities of our producers, comparing them with the overseas manufacturers, supporting their brands, upgrading their quality and increasing their variety to meet the demands of our people.Thank you.

ITAR-TASS:

China's industrial overcapacity is so severe that I heard of some China-Russia joint projects realizing an industrial transfer from China to the east of Russia. Can you talk about the issue? And how do you think about China-Russia industrial cooperation? Thank you.

Miao Wei:

Thank you so much. During my special trip to Russia last year, I met with Denis Manturov, Russian Minister of Industry and Trade, and we came to an agreement on establishing a mechanism on industrial cooperation, which expands the area from civil aviation to the whole industrial circle under my ministry and its Russian counterpart. China encourages its enterprises to invest, build workshops and manufacture in Russia so as to meet the needs of the local market. We had lots of exchanges and plans on the issue. With strategic partnership relations, China and Russia have mutual trust in politics and both economies are very complementary. Through bilateral industrial cooperation, we can achieve win-win development and contribute more to the development of both economies.

China National Radio:

Minister Miao mentioned the quality of commodities made in China when answering the question on consumption a few moments ago, and considering China's industrial growth rate dropped by 2.2 percentage points last year, it's obviously important for the Chinese manufacturing industry to realize transformation and upgrading. Can the long-term plan of "Made in China 2025" resolve current problems in China? Does it have a competitive edge compared with the Industry 4.0 of Germany? We've noted that the plan is more about the work of the government, so how will the market and enterprises play their roles in it? The second question is that we've seen that the launching conference for 5G technology R&D has taken place. What progress has been made and when can it be popularized? Thank you.

Miao Wei:

I'll answer the first question and the second one will be answered by Zhang Feng.

The State Council issued the plan of "Made in China 2025" last year, which is a guideline for the work in the next 10 years as you mentioned. It has attracted great attention from both home and abroad and it is widely acclaimed. What counts now is how to implement the 10-year plan and divide it into 10 annual plans under State Council requirement. And then we need to take concrete actions and make progress step by step advancing towards the target. At the end of last year, the leaders of the State Council convened the second conference for the leading group of the plan, during which the 2016 work plan was deliberated. The 2016 plan will focus on five large projects with concrete targets and detailed measures.

We need to allow enterprises to play a major role as most of the tasks will be carried out by them, especially leading ones in the sector. It is necessary to turn the big plan into annual ones, take actions and make it come true step by step. I've mentioned during our discussions before that rather than seeking the grandness of an annual plan we need to resolve some key problems every year in a down-to-earth manner and make progress step by step.

As for the comparison between "Made in China 2025" and "Industry 4.0," some work has been done before. Industry 4.0 also plans to take 10 years or more to improve the German industrial level from 3.0 to 4.0. The overall level of Chinese enterprises is lower than that of Germany and so we are faced with more challenges as we need to make up for the levels of 2.0 and 3.0 and also pursue for 4.0. Be it "Made in China 2025" or "Industry 4.0," we both focus on the promotion and application of new information and telecommunication technologies and try to bring about profound and revolutionary changes to the industrial sector.

To realize the target, except fro industrial enterprises, telecommunication enterprises, especially those in the Internet sector, can play a significant role. The Chinese Internet enterprises, including Alibaba, TenCent and Baidu, have all prospered over the past few years. We need to bring their competitiveness into full play.

As I mentioned, the State Council issued two important documents last year, namely, Made in China 2025 and Internet Plus Action Plan. Recently, under the requirement of the State Council, we are discussing how to integrate the two documents so as to promote mass entrepreneurship and innovation. I'll release some of our considerations here. It is necessary for the large-sized industrial enterprises to build up open Internet platforms through which employees and all the social resources can be integrated to push forward development rather than seeking innovation and development on their own. Haier Group and CITIC Heavy Industries Co. have taken a lead in this way. We also encourage enterprises in the sectors of Internet, industry and telecommunication to establish another platform offering public services to the small and micro businesses. Generally speaking, all those deeds can help traditional industry to undergo a complete and revolutionary change and, through the process, we can follow the tide and make progress. It is essential for us to clarify the role of the government during the process, which includes creating a good environment, offering good services and bringing the roles of the industrial and Internet enterprises into full play.

As for the second question, Zhang Feng will give you an answer.

Zhang Feng:

Earlier this year, China officially started the research and test of 5G technology. Building an open R&D and experiment platform, China invited enterprises at home and abroad to play a part, in a bid to promote the formulation of 5G standards, advance the R&D and industrial development of 5G technology and lay the foundation for its commercial use in 2020.

China launched 5G R&D in tandem with other countries in the world. First, we have built a collaborative work mechanism. Quite a few enterprises, universities and research institutes in China have set up the IMT-2020 (5G) promotion group and conducted research on 5G requirements, technologies, spectrum and standards. Second, we have engaged in 5G R&D. Many enterprises and universities have invested heavily in comprehensively conducting 5G R&D in all fields. We have published the White Paper on 5G Vision and Requirements and suggestions pertaining to 5G have been adopted by the International Communication Union. Third, we have intensified international cooperation. Some universities and research institutes in our country have built a multi-channel and multi-layer relationship with many foreign agencies. Our ministry will encourage domestic and foreign businesses to enter into a partnership on R&D and make a contribution to the development of the new generation of mobile communication technology. On the basis of our holistic arrangement, the basic research and test of 5G technology will be carried out between 2016 and 2018 in three phases -- key technology test, technology solution test and systematic test.

China News Service & Chinanews.com:

Minister Miao just now talked about "Made in China 2025," and also talked about promoting smart manufacturing, strengthening industrial base and enforcing green manufacturing among five major projects. My question is whether there will be any landmark projects revolving around the five major projects launched recently? If there are any, please give details on the projects. Thanks.

Miao Wei:

As I said just now, we have drawn up the work plan for 2016 which is going through signing procedures and will be announced soon. I give you some examples here. The project of strengthening industrial base, for example, will center on 30-50 landmark projects and technologies this year to address the shortage of fundamental parts, fundamental techniques, fundamental materials and technologies. For the high-end equipment innovation project, a key task this year for us is to kick-start the special project of plane engine and gas turbine. For the construction project of manufacturing innovation center, we are planning to build two or three national technology innovation centers and support the building of provincial technology innovation centers. The focus that those centers will place is on making a breakthrough in technologies shared by all players in the sector, rather than solving the core technology issue that a single business can do. That is the biggest difference. Since our technology innovation centers are dedicated to solving shared industrial technologies, they should play a leading role of enterprises which refer to a slew of enterprises, particularly major enterprises in the field, rather than a single enterprise.

Now, we have a power battery innovation center to work as a pioneer in this aspect. To our knowledge, except for BYD, makers of new energy vehicles don't produce but purchase batteries. You all know, the progress made in power battery technology determines the performance, quality and safety of a car, so we work together with nine enterprises to establish a research institute or R&D platform with a fund of 500 million yuan (US$76.55 million). That is our plan this year. I will not go into details about other projects.

Anyway, we have detailed plans. In the near future, you will see the details after the document concerning the five major projects is released. You will then know which enterprises are undertaking the task, and which universities and research institutes are brought in. The information about foreign firms involved will also be disclosed.

NHK:

Two questions. First, the Chinese government has vowed to boost mass entrepreneurship and innovation. Didi Taxi can be considered as an innovation model, but there is some contradictory existed between Didi's service and government's traditional supervision. How does the Ministry of Industry and Information Technology (MIIT) view enterprises like Didi Taxi? Will they support those innovation-oriented enterprises in the future? The second question is about "zombie factories". In January, the People's Daily published a series of reports on "zombie factories", including Heilongjiang Longmay Mining Holding Group Co. Ltd. Although the local government and the group have released a reform program, some people still complain about the speed of its reform and recombination. What's MIIT's comment on that? How to deal with contradictions between central and local governments on the "zombie factory" issue? Thank you.

Miao Wei:

Mr. Feng, please answer the second question, and I will take the first one.

Companies like Didi Taxi are actually a new product emerging from the shared economy in the Internet era. Of course, the emergence of new things will surely have great impact and influence on tradition industry; for example, Didi has had great impact on traditional taxi operations. In fact, it is the Ministry of Transport that is partly in charge, while the MIIT also participates in the supervision, since it calls for some Internet technology application.

Generally speaking, we actively support those companies, and instruct them to draw on their advantages and eliminate disadvantages. For supervision, I noticed that the Ministry of Transport has already drawn up a range of management ideas and is seeking opinions from the public. You can contact the Ministry of Transport for further information.

Feng Fei:

Thanks for your question. I also read a related report on this. Actually, during the recombination process, there are three difficulties: staff resettlement, assets disposition and the willingness for recombination. To solve these difficulties, as I mentioned earlier, staff resettlement depends on a strong social policy and proper special compensation fund. When designing such policies, we mainly focus on incentives and guidance mechanisms, in order to let enterprises develop a will for recombination. The recombination should be promoted by market mechanisms rather than the government.

The government should focus on obstacles and difficulties existing in the market. Take recombination as an example: the government should provide support on perfecting the market environment through financial instruments, including annexation loans and involvement of the capital market and fund companies. During the recombination process, tax, especially capital gains tax, is another problem needing a more detailed and precise tax policy. Generally speaking, we should let market and enterprises play their respective roles, while government should focus on providing necessary stimulus and support. Thank you.

Hu Kaihong:

The last two questions.

CRI:

The backgrounder says we should accelerate the planning and the implementation of industrial restructuring with an overall plan to eliminate the so-called 'zombie enterprises.' What is the idea behind the plan, and how is it being carried out? Regarding the removal of zombie enterprises, what goals do we have for 2016?

Feng Fei:

Thank you for your questions. Pushing forward industrial restructuring and eliminating 'zombie enterprises' are requirements from the central authorities, according to which, the NDRC and the MIIT will jointly draft the actual implementation plans. In our general idea, the corporate sector will be placed in the primary position, the government will push forward the transformation, the market will play a guiding role, and the entire process will be conducted according to law. We pay more attention to using the market mechanism, economic measures and law-based approaches to steadily phase out zombie enterprises by means of mergers, acquisitions, debt reorganization and bankruptcy liquidations, although we favor more mergers and fewer bankruptcies.

Also in our general thinking, we should "tackle both the superficial matters and their fundamental causes to solve both immediate and chronic problems." In so saying, I mean that we should perfect the long-term market mechanism of phasing out enterprises. I've already defined "zombie enterprises" just now. First, local financial institutions should stop giving credit to zombie enterprise; they should apply differentiated approaches and stop issuing new loans. Second, we should step up law reinforcement on environmental protection, energy efficiency, quality control, safety and technologies in order to force out zombie enterprises through laws and regulations. Third, as I mentioned just now, we will use the market stimulation mechanism to encourage more enterprises to conduct mergers and reorganizations, and remove any obstacles to this for a better market environment.

This is our overall thinking, and we are accelerating the drafting of concrete plans. We also mentioned just now that we would seek to solve the two relatively difficult problems: resettlement of redundant employees and disposal of assets. Properly solving these issues will help maintain social stability in phasing out zombie enterprises. Thank you.

HK China Review News:

The next Taiwanese leader has put forward the "New Southbound Policy," in a bid to strengthen corporate cooperation, especially on OEM, with southeastern Asian countries. At the same time, in our plan "Made in China 2025," intelligent manufacturing is set as a main target for the development of China's manufacturing sector. My question is: how big is the room for cross-Straits cooperation among related industries? How do you view the prospect of cross-Straits corporate cooperation? And what industries will feature cross-Straits cooperation in the future? Thank you!

Miao Wei:

Since the Mainland and Taiwan signed the ECFA, the economic and investment activities have been constantly making new breakthroughs. The cross-Straits industrial cooperation are becoming increasingly frequent, its scale expanding, its mode seeing innovation and its level being raised. Practice shows cross-Straits industrial cooperation and exchanges have achieved a mutually complementary, win-win result, apart from raising the competiveness of the enterprises involved. Such cooperation has helped the Mainland learn from Taiwan some experiences in industrial development, and Taiwan shares the abundant market and development opportunities on the Mainland.

The both sides of the Taiwan Straits share a consensus on further deepening industrial cooperation. Last year, the first Cross-Straits Industrial Development and Cooperation Forum was held in Beijing. At the forum, up to 300 delegates from the corporate and science and technology sectors on both sides discussed future industrial development and cooperation. The industrial sectors from both sides fully realize that deepening cross-Straits industrial cooperation is essential, with a promising future.

As you all know, global industrial and science and technology cooperation is constantly accelerating, amid which the industrial sectors on both sides of the Taiwan Straits face shared opportunities and challenges. Strengthening cross-Straits industrial cooperation, especially on the innovation front, is necessary. Both sides favor the docking between the Mainland's "Made in China 2025" and the Taiwan's "Productivity 4.0" in that both sides could make the most of their respective advantages. The docking of plans will especially emphasize the cooperation on robots, green manufacturing, and industrial parks. We are set to move forward the docking and early start of a batch of projects, expand and deepen cross-Straits industrial cooperation, so that the industrial chains and value chains on both sides will have win-win results in common development. Thank you.

Hu Kaihong:

That marks the end of today's press conference. Thank you again, Minister Miao Wei, Vice Minister Feng Fei, Chief Engineer Zhang Feng, and all friends from the press.

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