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Report says China’s economic development must rely on integration between innovation and industrial production,  and work must be done to ensure that innovation progress was passed on to production.
Report says China’s economic development must rely on integration between innovation and industrial production,  and work must be done to ensure that innovation progress was passed on to production.

China Says Industrial Integration Will Add 12 Percent to GDP

For the country’s strategic emerging industries, such as new energy and advanced manufacturing, the report predicted that their output would account for about 10% of total GDP in 2017

China Says Industrial Integration Will Add 12 Percent to GDP

China's new economy will account for an estimated 12% of the country's annual GDP this year, according to a research report.
"China's development strategy of innovation and industrial integration is seeing some early success," according to a report released at a forum jointly held by the Renmin University of China, and China Chengxin Credit Management, Xinhua reported.
The new economic sectors have been growing at a quite steady pace, said the report. In 2014, about 8% of Chinese GDP was contributed by new sectors.
For the country's strategic emerging industries, such as new energy and advanced manufacturing, the report predicted that their output would account for about 10% of total GDP in 2017.
In the past three years, an average of more than 40,000 new market entities were registered each day, with about 70% active in business, the report said.
China's new economic sectors are going through a key stage where "quantitative changes" will lead to "qualitative changes", said Zhang Jie, a researcher with the Renmin University National Academy of Development and Strategy.
The report said that China's economic development must rely on integration between innovation and industrial production, and work must be made to ensure that innovation progress was passed on to production.
The Chinese government expects the combined output of emerging sectors to account for 15% of GDP by 2020.

$48 Billion Fund Seeks Investment
John Pearce has returned to Sydney from a week in Hong Kong beaming, with one clear message of where to invest his next dollar: China, Bloomberg reported.
The chief investment officer who’s in charge of A$60 billion ($48 billion) at Australian pension fund UniSuper Management Pty expects returns in Asian emerging market equities to beat developed economy peers, extending an outperformance that’s already underway. The main reason: Chinese firms are driving profit growth set to exceed that in mature stock markets as it’s coming from a lower starting point.
UniSuper is joining some of the world’s largest investors who say the two-year rally in emerging market assets has further to go. Franklin Templeton to BlackRock Inc. are among money managers betting that developing-nation stocks and bonds will continue to appreciate as they catch up from more than half-a-decade of underperforming US assets.
China’s management of its economy is also making Pearce more comfortable. He recently allowed his money managers to invest in mainland Chinese equities directly for the first time in the firm’s history.

Household Debt Growth
Chinese household debt is growing rapidly, outpacing broad credit growth every year since 2013 and reaching 38 trillion yuan ($5.7 trillion) by the end of the second quarter of this year. But household debt remains relatively low by global standards, at about 44% of gross domestic product, and the absence of a widely used standard of creditworthiness is keeping consumer borrowing from growing even faster, hampering access to credit for some 500 million potential borrowers.
That’s not good for China’s economy, as the government looks to consumer spending to provide more of the fuel for growth. And, as a rash of online lenders mushroom to fill the void left by state banks that won’t lend to most consumers, regulators say a viable credit-scoring system is increasingly critical as a safeguard against the risk of widespread defaults.

Rejects S&P Credit Rating
China’s Finance Ministry has criticized Standard & Poor’s downgrade of the country’s sovereign credit rating as “perplexing”. It said the downgrade focused on credit growth and debt, but ignored China’s distinctive financing structure, the wealth-creating effect of government spending and its support for growth, in addition to its sound economic fundamentals and development potential, Xinhua said.
The decision to lower the rating from AA- to A+ was a result, the ministry said, of “international rating agencies’ longstanding mode of thinking, and a misreading of the Chinese economy based on developed countries’ experiences.”
It said that S&P’s thinking was a “cliche”. The agency believes that “credit growth in the next two to three years will remain at levels that will increase financial risks gradually,” even though the government has been acting to constrain borrowings.

 

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