CNBC:

First, I would like to know how the resumption of work and production of enterprises going in key development regions such as Shanghai and the Greater Bay Area? Second, in terms of chip R&D, what important progress has China made in recent years? In the next step, what are your plans for attracting talent and foreign investment? Third, what is the frequency of accidents in autonomous driving tests? From the policy level, how to balance the safety and commercialization of autonomous driving? Thank you.

Xin Guobin:

Thank you for your questions. You are concerned about many issues, mainly on the resumption of work and production, autonomous driving, and the development of integrated circuits. Let me first answer the questions about the resumption of work and production and autonomous driving.

The Yangtze River Delta and the Pearl River Delta are the most economically developed regions in China, and the resumption of work and production in these regions is our top priority during this period. In our work, we focus on key regions, key industries, and key enterprises, establishing a white list system for key industrial-chain and supply-chain enterprises, enhancing cross-regional and cross-departmental coordination, and are doing everything possible to support enterprises to reopen, stabilize production, and reach their target output. Positive results have been achieved so far. All 22,500 ministerial- and provincial-level whitelisted enterprises have resumed work, and the vast majority of enterprises have returned to their pre-epidemic production levels. In terms of the Yangtze River Delta region, industrial enterprises above designated size in Jiangsu, Zhejiang, and Anhui provinces have resumed work and reached production capacity better than expected. The work resumption rate of industrial enterprises above designated size in Shanghai also reached 96.3%, and the rate of reaching target output exceeded 70%. During the epidemic prevention and control course in Shanghai, key enterprises in the integrated circuit field have maintained a high capacity utilization rate of more than 90%, and the rate of reaching target output in the automotive field has been steadily increasing.

I made a point of checking on them this morning. SAIC Motor's production in early June achieved a year-on-year increase of nearly 60%, and Tesla has achieved full production. Looking at the situation in the Greater Bay Area, industrial enterprises in Guangdong province have basically resumed normal production. At present, the resumption rate of industrial enterprises has exceeded 98%, and key industries such as auto and telecoms, which were greatly affected by the epidemic in the early stage, have basically returned to normal. Many companies expressed their will that they would try to regain the output delayed in March and April through two months of efforts in May and June.

Next, we will follow the general requirements of "the epidemic must be prevented, the economy must be stabilized, and development must be safe," and encourage enterprises to shift from reopening to stabilizing production and reaching target output to ensure that industrial and supply chains are stable and unimpeded.

Regarding the question that you raised about autonomous driving tests, here I have the data of an Intelligent Connected Vehicle (ICV) test demonstration area, and I will introduce some information. In 2021, the total mileage of real road tests in autonomous driving modes in this demonstration area was about 3.08 million kilometers, and there were 21 accidents that were counted, with an average of one accident per every 147,000 kilometers. Such a number is also at an advanced level in the world.

Next, we will continue to coordinate development and safety, adhere to the bottom line of public safety, and make concerted efforts in management policy, technological innovation, standard systems, testing, and demonstrations, etc., and introduce important standards such as functional requirements and information security for autonomous driving. We will also launch market access pilots at the right time to promote the stable and long-term development of the ICV industry.

Vice Minister Xu Xiaolan will now answer your question about chips.

Xu Xiaolan:

I would like to answer the question about chips. China is an important integrated circuit market in the world. In recent years, thanks to the joint efforts of domestic and foreign-invested enterprises, the scale of China's integrated circuit industry has been growing, and the technological innovation capacity in the industry has been sharply enhanced. In 2021, the sales of the whole industry exceeded one trillion yuan for the first time. The compound growth rate from 2018 to 2021 stood at 17%, more than three times the global growth rate over the same period. Upholding the principle of open development, the Chinese government is committed to building global industrial chains and supply chains with close cooperation. In 2020, China issued a package of policies for promoting high-quality development of the integrated circuit and software industries in the new era, treating domestic and foreign-invested enterprises equally. We welcome integrated circuit enterprises around the world to set up R&D, production, and operation centers in China. We encourage more outstanding entrepreneurs and high-quality technical and management talents to come to China for development and share the benefits of the growing market demand. We will focus on policy implementation, step up talent recruitment and education efforts, deepen international cooperation pragmatically, strengthen intellectual property protection, create a fair and equitable market environment to promote high-quality development of the integrated circuit industry. Thank you.

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