China Council for the Promotion of International Trade (ccpit) 2009 Preface

Role of Light Industry in National Economy and Social Life

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Role of Light Industry in National Economy and Social Life

As the major consumer goods industry, China’s light industry boasts the features of satisfying domestic demands, export orientation, pillar for employment and offering services for agriculture-related sectors. Light industry plays an important role in China’s national economy, the major component of the consumer goods industry. It is an important industry for the national economy, assuming the task of improving the quality of people’s life, boosting domestic market, enlarging the export and earning more foreign exchange, accumulating construction fund, creating jobs and promoting economic development. Light industry is a kind of consumer goods industry. Its products are closely related to people’s daily life. In line with the conventional classification of industries, China's light industry is classified into 19 categories and 45 sub-industries, including over 500,000 kinds of products. These products cover food, clothing, accommodation and transport, including food, papermaking, chemicals for daily use, leather, household electrical appliance, plastic, ceramics, furniture, stationery and sports goods.

China’s light industry has gone through some historic changes since the country was liberated, from small to big, from weak to strong. Its gross output had risen to 7604.1 billion yuan in 2008 from 117.7 billion yuan in 1978. The gross profit and tax had soared up to 524.9 billion yuan in 2008 from 18.5 billion yuan in 1978. The gap between the technical equipment of China’s light industry, which has reached up to the international level in middle and late 1990s, and the world’s advanced level has been narrowing. Resources in the light industry have realized market-oriented allocation. Enterprises have become the major participants of market competition. China’s light industry has rapidly adopted the rules on world trade especially since its accession to the WTO, surviving the transition period smoothly. The international trade volume has grown annually, acting as an important supplier in the global consumer good market. Its products have been exported to over 200 countries and regions across the world. The light industry has earned US $ 270.3 billion through export in 2007, becoming the major source of foreign exchange reserve. It is playing a significant role in the whole national economy and for social development.

Light Industry Serves as One of the Pillar Industries of National Economy

Light industry is a traditional competitive industry of China, an important component of the national economy. China’s light industry maintained rapid growth since the beginning of the 21st century. The added value of light industry achieved by the enterprises above designated size had increased by 5.2 times from 2000 to 2008, with an average annual growth of 22.9%. In 2008, the added value of light industry reached up to 2,623.5 billion yuan, accounting for 20.3% of China’s industrial added value, 8.7% of the GDP. 627.8 billion yuan of profit and tax had been achieved from January to November of that year, accounting for 14.8% of the total achieved by all industries. The export competitiveness has witnessed a significant increase as China is becoming an important manufacturing base for global light industry products. The gross export value reached US $ 309.2 billion in 2008, accounting for 21.7% of China’s total export value. The figure was 3.4 times of that of 2000, and the average annual increase stood at 20.2%. The trade surplus created by China’s light industry has accounted for over 76% of the total for several years. The light industry represents large proportions in terms of number of enterprises, gross output, total asset and involved employees. A quarter of the products of China’s light industry have been exported to over 200 countries and regions across the country, which has enabled the light industry to become an important force for China to participate in international competition and cooperation in this age of global economic integration. A group of brands, such as Haier, Gree, Bosideng, Maotai and Qingdao Beer, have gained great fame home and abroad. Outputs of more than 100 kinds of products including bicycle, sewing-machine, battery, beer, furniture, ceramics for daily use, lamp, air-conditioner, refrigerator, washing machine, shoes and piano rank first in the world. In particular, household electrical appliance, leather, furniture, down products, ceramics and bicycles account for over 50% shares in the global market. China has become a great power in terms of light industry, while its light industry has boasted innovative competitiveness.

Figure 1 3 Proportions of China’s Light Industry in China’s Industry in 2008

Unit: %

The output value of the new products of China’s light industry had risen to nearly 660 billion yuan in 2008 from 333.7 billion yuan in 2005, with an average annual growth of 34.2%. Industries such as household electrical appliance, plastic and leather products have imported technologies and key equipment from foreign countries, gradually gaining the strong capabilities for integrated innovation and the capabilities of independent innovation at some certain degree.

Light Industry Is the Foundation to Satisfy Consumption Demands of Residents and the Society

Light industry is the major player in the consumer goods industry, assuming the task of boosting market and improving the quality of people’s life. Therefore, as the consumption industry, the light industry covers those major industries related to people’s life. No matter it is the agricultural and sideline food processing industry, food manufacturing industry, beverage manufacturing industry with agricultural products as the primary materials or the stationary & sports product industry and the daily-use chemicals manufacturing industry with non-agricultural products as the primary materials, they all aims to offer consumer goods of certain quantity and quality and related services to consumers at different levels as well as gradually enrich and satisfy the consumption demands of residents and the society. China’s light industry has played a positive role in boosting market, offering consumption guide, expanding domestic demands, promoting rapid growth of GDP, earning foreign exchanges through export, creating more jobs for several years.

Since 1979 when China began to adopt the reform and opening-up policies, Chinese people’s consumption level and capacity have seen significant increases as their incomes are growing. It has provided the light industry with a huge space for development expansion. As of the end of the 20th century, the production system of the light industry, with a comparatively completed industrial structure and able to satisfy various consumption demands, had formed. The variety quantity of light-industry products has increased by over ten times and already reached up to nearly 300,000, which has significantly enrich the consumer goods market and satisfy the growing demands of Chinese people. Outputs of light-industry products have witnessed significant increases, and the whole industry has initially achieved the transition from a seller’s market to a buyer’s market. The supply-demand relation has gone through fundamental changes. Economic growth mode has begun to transform from being quantitative growth oriented to being quality and effect oriented. Outputs of some products such as air-conditioner, refrigerator, washing machine, microwave oven, clock, bicycle, sewing machine, furniture, plastic processing machinery, ceramics for daily use, lamp, battery, beer, piano, plastic product, mulching film, down product and leather shoes rank first in the world. China’s industry not only satisfies the demands from domestic markets but also plays an important role in world trade, making China a great power in terms of light industry.

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