China Business Guide 中 国 商 务 指 南 2009 （The Light Industry）

Figure 3 1 Major Goals for China’s Food Industry during the 11^th Five-Year-Plan Period

Category	Index	2005	2010	Annual Average Growth Rate（%）	Attribute
Speed and effectiveness	Total output (100 million yuan) Profits and taxes (100 million yuan) Ratio between output of the food industry and output of the agriculture	20345 3365 0.5:1	40900 6768 0.8:1	15 15	Expectation
Enterprise structure	Enterprises with sales revenue exceeding 10 billion yuan (number) production concentration of top 100 Enterprises (sales revenue, %)	>10 25.6	>20 >30		Expectation
Science and technology	Contribution rate of technical advance (%) Proportion of production equipment adopting micro-electronics and IT (%)		40 50		Expectation
further processing and Multipurpose utilization	Proportion of processed food in food Consumption (%) Proportion of output of the food processing industry and food manufacturing industry (%)	35 68	40 70	[5] [2]	Expectation
Public nutrition condition	Energy intake (1000 calories/day) Protein intake (g/day) Fat intake (g/day)	2250 66 76	2300 75 70		Expectation
Resource and environment	Decrease of energy consumption per Unit of output (%) Decrease of energy consumption per unit of industrial added value (%) Comprehensive utilization ratio of Industrial solid wastes (%) Decrease of emission of major pollutants (%)		20 30 >80 >10		restriction
Note: the total output as well as the profit and tax of the food industry is based on the prices of 2005, and the mark [ ] means the number is the accumulative amount of the five years。

Policies and measures defined for development of the food industry: to promote innovation in mechanism and system as well as enhance macro-control, planning and guidance; to make more investments in the food industry for technological advances to boost the motive force for development; to build production bases of high-quality farm produce to satisfy the demands of the food industry for raw materials; to speed up the readjustment on product portfolio and strive to foster renowned trademarks in the food industry; to foster and strengthen leading enterprises in the food industry to promote the upgrade of the industrial structure; to take positive measures to carry out the opening-up strategy to constantly expand development domain; to enhance the management on food standards and make more efforts to implement the standards; to diversify investment targets to investment more in the food industry through several channels; to play the role as an intermediary agent and enhance self-discipline of the food industry; to offer generous support to the development of the food processing industry during the transition period of the cities facing resource exhaustion and make the industry an important industry offering jobs for those from other industries. Additionally, the central government will provide necessary support in finance, tax and capital.

2. Plastic Manufacturing Industry

China has already become one of world’s giant plastic manufacturers. China’s plastic industry has gained noticeable achievements since the beginning of the 21st century, and the major economic indicators have witnessed two-digit growth. The total output ranks first in the light industry, export fifth. The industry has become the pillar for the sound development of China’s economy.

The goal of the plastic industry during the 11^th Five-Year-Plan period (2005-2010) is to optimize and upgrade industrial structure as well as strive to improve industry-related technologies. The annual growth rate of the output of plastic products shall reach up to 10%, and the annual growth rate shall be 8% from 2010 to 2015. Therefore, the total output of plastic products shall be 35 million and 50 million tons respectively in 2010 and 2015. The industry plans to double the total output of plastic products in 10 years.

The plastic industry plans to: maintain steady and rapid development during the 11^th Five-Year-Plan period; insist on the Scientific Outlook on Development; speed up structural readjustment and transform of economic growth mode; embark on a road to sustainable development; focus on independent innovation on the basis of scientific development; make more efforts on R&D of new equipment, new material, new technique and new product; insist on the people-oriented principle and readjust the development outlook; make greater efforts to foster large-sized enterprise groups; cultivate renowned brands and participate in global competitions; cut down on consumption of materials and energies as well as commit clean production through promoting technological advances and enhancing scientific management, making the plastic industry embark on the road for harmonious and sustainable development.

3 Papermaking and Paper Product Industry

The papermaking industry is one of the important industries providing elementary raw materials for the national economy. Consumption level of paper and paper board has become an important indicator measuring a country’s level of modernization and civilization. China’s output and consumption volume of paper and paper board rank second in the world, following the US. China has already boasted considerable influence in the competition of global papermaking industry. The major indicators and requirements on initial sizes of projects for China's papermaking industry during the 11^th Five-Year-Plan period are as follows:

Figure 3 2 major indicators for the development of China's papermaking and paper product industry

during the 11th Five-Year-Plan period

Category	indicator	2005	2010	Annual growth (%)	attribute
Development speed	Total output of paper and paper board (10,000 tons)	5600	7600	6.3	expectation
	Total consumption volume of paper and paper board (10,000 tons)	5930	8500	7.5	expectation
resource consumption	Comprehensive energy consumption per ton of pulp, paper and paper board (tce)	1.38	1.10	-4.4	restriction
	Average water consumption pert on of pulp, paper and paper board (cubic meter)	103	80	-4.9	restriction
environmental protection	Total emission of the major pollutant of COD to reduce by 12.5%				restriction

Major policies and measures include: to define development policies for the papermaking industry and regulate the order of market development; develop recycling economy and carry out plans and development policies defined for the papermaking industry; define and revise relevant standards and enhance resource saving and pollution control; play the role as an intermediary and improve self-discipline of the industry.

4 The Furniture Manufacturing Industry

Since 2000, China’s furniture manufacturing industry has gone through the rapidest development in its history. Furniture production has witness the trend of rapid growth. The goal of the furniture manufacturing industry during the 11^th Five-Year-Plan period is to: optimize industrial structure and achieve specialized division in the industry; build a complete industrial chain from production supply to product sale; form an industrial pattern with complementary product structure and specialized production and cooperation while large-sized enterprises playing a leading role and medium- and small-sized enterprises as the major players; improve the overall management of furniture manufacturers and the industrialization level of furniture production; strive to lower production cost and improve productivity in the furniture industry to catch up with those developed countries; furniture output to maintain an annual growth rate of about 15% and the output value of 2010 to be double of that of 2005; ensure domestic consumption of furniture and satisfy export demands to lay the foundation for becoming a giant furniture manufacturer; furniture export to maintain an annual growth rate of 20%; increase export volume, readjust structure of exported products, continue to explore international markets and improve added value of exported furniture; in line with the requirement to build a harmonious society with the people-oriented principle, pay more attention to harmonious economic and social development, further enhance self-discipline in the industry, attach importance to environmental protection and social responsibility, regulate the competition order and market order for the industry.

 The major measures adopted to achieve the goal including: insisting on independent innovation and improving management on furniture production; readjusting industrial structure and product structure to form an industrial development pattern in accordance with the requirements for a conservation-oriented society; carry out various exchange programs for furniture designs to encourage the establishment and development of furniture design firms and furniture design research centers; make greater efforts on quality standards, while encourage enterprises to commit ISO quality certification and improve their management on quality; enhance international exchange and cooperation as well as import internationally advanced technologies and management expertise; make positive efforts to organize successful international furniture exhibitions.

5 Leather, Furs, Down and Related Product Industries

As an important part of the light industry, China’s leather industry will continue to take on the tasks of enriching the light-industry product market, expanding domestic demands, increasing accumulation, earning foreign exchange through export, creating jobs for urban and rural labor force, promoting continuous and steady development of farming and animal husbandry, and building a harmonious society. China’s leather industry covers the main sectors of tanning, shoe-making, leather garment, leather items, fur and related products as well as supporting sectors including leather machinery, leather chemicals, leather hardware and auxiliary material. Playing an important role in earning foreign exchanges, increasing residents’ income and creating jobs, the leather industry has become a competitive industry in the global market with a complete industrial chain, higher consistency between upstream and downstream products.

The goal of the leather industry during the 11^th Five-Year-Plan period is to: put control on output growth and encourage improvement of products’ added value; maintain an annual growth of 10% in its total output value; put control on export volume and encourage increases of export prices; maintain an annual growth of 10% in the foreign exchanges earned by the industry through export; achieve significant increases in utilization rate of resources; reduce the energy consumption per unit of GDP by 20% compared with the end of the 10^th Five-Year-Plan period; put more effective control on environmental pollution and increase production without increasing pollution; foster 3-5 world-renowned brands by 2010 or even later. The core lies in two aspects. One is to improve the overall quality of China’s leather industry, and the other is to encourage Chinese leather enterprises to foster world renowned brands.

Measures and recommendations for the leather industry: ensuring quantity and quality of raw hide is the foundation for the sustainable development of the leather industry. During the 11^th Five-Year-Plan period, the leather and fur industries will continue to rely on domestic resources for supply of the raw materials needed by them. Improvement in capability of independent innovation will be regarded as the strategic foundation for the development of the industry, and play a key role in readjusting industrial structure and transforming growth mode; developing independent brands is the first step to readjust industrial structure and transform growth mode; leather identity and environmentally-friendly leather form the platform to foster brands for the industry, as well as the carrier for self-discipline of the industry; enterprises are the major players in building independent brands and implementing the guideline of “going globally”; areas with suitable conditions will be encouraged to bring aggregation effect into full play; competitive enterprises will play a leading role, encouraging other related enterprises to carry out cooperation and offer support to gain joint development and form industrial regions with the unique characteristics of the leather industry; industrial regions with the unique characteristics of the leather industry will become the leading force and major battleground for readjustment of industrial structure and transformation of growth mode; efforts will be made to save energies and reduce energy consumption and enhance environmental protection; new modes of tanning and fur processing will be figured out to build an environmentally-friendly and resource-conserving leather industry and embark on the road of recycling economy; new growth points will be identified on the basis of expanding domestic demands to achieve the transformation from relying on export-driven to being driven by coordination between domestic and foreign demands; active efforts will be made to foster diversified specialized markets home and abroad as well as lay the foundation for becoming a giant leather manufacturer. With the direction offered by the Scientific Outlook on Development and the 11^th Five-Year Plan, the industry should proceed with confidence and strive for innovation to initiate new prospects for the development of the leather industry and fulfill the ambitious goal of becoming a giant leather manufacturer as soon as possible.

3.17 Technical Environment

At present, China’s light industry has some problems in technological innovation, such as poor innovation capabilities, lack of funds for scientific researches and qualified technical personnel, and lag in technical equipment. Therefore, there is a huge space in technological innovation facing China’s light industry. The light industry is an important component of China’s manufacturing industry. The research on technological strategies for the major manufacturing sectors in the light industry is based on the nation’s medium- and long-term goals of “taking a new road to industrialization” and “building a well-off society in an all-round way”, with analysis on technology-related problems facing the major manufacturing sectors in the light industry. It offers technical support to define the national scientific and technological development plans during the 11^th Five-Year-Plan period, and also provides evidence for decision-making in defining guiding documents for the scientific and technological development of the light industry. The light industry is ill-equipped and has poor capability for technological innovation. Generally speaking, a majority of light-industry enterprises are equipped with the technical equipment of the level of 1980s or even earlier. There is a big gap from the world’s advanced level. Light-industry scientific research institutes and poorly associated with enterprises and market. Many medium- and small-sized enterprises nearly have not the capability for technological development, with a lack of technical personnel, facilities and funds for scientific researches. In addition, large enterprises fail to make enough investments into scientific research and development. The major manufacturing sectors in the light industry include the papermaking industry, the fermentation and enzyme making industry, the household appliance industry, the leather industry, the detergent product industry, the lighting industry, the battery industry, the plastic industry, the sewing machinery industry and the ceramics industry.

At the beginning of the 21^st century, economic globalization, new scientific and technological revolution and corresponding structural readjustment have become the three basic trends, playing a leading role in the development of global economy and exerting considerable influence on China’s economic development.

The economic globalization has accelerated and the economic pattern is undergoing violent changes. Economic globalization has expanded the capacity of global market, generating bigger space for economic development of all countries and bringing more opportunities as well as posing new threats and generating bigger risks. The IT-based new economy has gone through vigorous development and will promote profound readjustment to the global industrial structures. The new technological revolution, represented by information technologies, is underway across the globe, bringing fundamental changes to the global economic growth mode. Based on market, production factors are deployed within the whole world on a large scale, while the global industrial structure is undergoing significant readjustments. All these will provide historic opportunities for the readjustment and development of China’s economy, and speed up the structural readjustment and industrial upgrade of the labor-intensive light industry.

Chapter 4 Analysis on Development of China’s Light Industry in 2008

Generally speaking, the overall production of China’s light industry had maintained stable in 2008. However, the total output value of the light industry was on a declining curve in terms of growth of its total output value, no matter the figure calculated for the period or the accumulated number. The light industry has followed a course from high to low. Affected by factors such as the changing global economic and financial situations, growth of the light industry has slowed down, while some sectors and enterprises have been faced with difficulties. Year-on-year growth witnessed obvious declines. The year-on-year growth stood at only 10.7% in December, much lower than the annual average.

The added value of the light industry reached up to 2623.5 billion yuan in 2008, accounting for 20.3% of China's industrial added value, 8.7% of GDP. From January to December of 2008, the enterprises above the designated size in the light industry had achieved a total of industrial output value of 9389.8 billion yuan, a year-on-year increase of 24.45%. The growth was 4.67 percentage points lower than that of the same period of the prior year. The total cumulative output value of the enterprises above the designated size in the light industry accounted for 65.6% of the total output value of the light industry, while the enterprises below the designated size in the light industry had achieved a total of industrial output value of 4933.66 billion yuan. In 2008, the export of the light industry stood at US $309.2 billion, accounting for 21.7% of China’s total export and 3.4 times of that of 2000. The average annual growth reached 20.2%. The enterprises above the designated size in the light industry had a total of 20.42 million employees in 2008, accounting for 25% of that of the industrial enterprises above the designated size. With the enterprises below the designated size, the whole light industry employed over 35 million people.

Figure 4 1 Output Value and Sales Value of China’s Light Industry as well as Their Year-on-Year

Growth in 2008 Unit: 100 million yuan, %

Title	Cumulative output value	Year-on-year growth	Cumulative sales value	Year-on-year growth
200802	18840.53	23.50	18384.37	24.90
200803	30391.29	25.60	29600.33	26.30
200804	41819.45	25.20	40765.30	25.90
200805	53845.75	25.00	52501.33	25.30
200806	67578.37	25.00	65881.75	24.70
200807	79620.14	24.50	77690.18	24.10
200808	91829.12	24.00	89652.16	23.40
200809	104876.14	23.40	102390.11	22.60
200810	117213.80	22.70	114367.64	21.70
200811	130034.70	21.90	126568.15	20.60
200812	143234.59	21.00	139450.46	6.90