Experts weigh June and first-half data, stress more efforts to make chains resilient

China's industrial output, an important economic indicator, continued its rise in June, growing by 3.9 percent year-on-year, thanks to the auto industry's rebound, data from the National Bureau of Statistics showed on Friday.

But "continuous efforts" are still needed to boost the resilience of the industrial and supply chains so as to ensure sustained stabilization of the industrial economy, industry experts said.

NBS data showed the industrial output in June was higher by 0.84 percent from that in May. The total industrial output in the first half of this year also expanded 3.4 percent year-on-year. Among the 41 major industries, the output growth of 27 industries rebounded in June from May. In particular, the output of the equipment manufacturing industry increased by 9.2 percent year-on-year during the period, up 8.1 percentage points from May.

"The growth of the equipment manufacturing industry, especially the automobile industry, has played a prominent role in driving up the entire industrial growth," said Fu Linghui, an NBS spokesperson, while briefing media on Friday.

The output of the automobile industry increased by 16.2 percent year-on-year in June.

Sales of new automobiles soared nearly 24 percent year-on-year to 2.5 million units in June, according to the China Association of Automobile Manufacturers.

"Affected by the negative impact of the COVID-19 pandemic, the industrial chain of the automobile industry in the Yangtze River Delta region has been affected to a certain extent. With the gradual recovery of Shanghai and other cities and regions in normal life, the production of the automobile industry has accelerated," Fu said.

Wen Bin, chief economist of China Minsheng Bank, said rebounded infrastructure investment, still-resilient exports, and the narrowing decline in sales in the consumption and real estate markets also helped accelerate the recovery of industrial production.

However, Fu Baozong, a professor at the Academy of Macroeconomic Research, which is part of the National Development and Reform Commission, said the foundation for stable growth of the industrial economy is not yet solid, and more continuous efforts must be made to enhance the resilience of the industrial and supply chains.

Since June, several ministries have held intensive symposiums to better cope with industrial challenges for the second half of this year. The NDRC held a video symposium with experts on the economic situation on June 23 and 24. The Ministry of Industry and Information Technology also held symposiums successively with industry experts, industry associations, key enterprises, and small and medium-sized enterprises in late June.

"More efforts are still needed to smooth the circulation of products, logistics, people and capital, which are crucial for the industrial chain. Currently, some key enterprises in the industrial chain still face the risk of falling off the chain due to the negative impact of the COVID-19 epidemic," said Fu.

"Also, it is urgent to accelerate the exchange and mutual recognition of circulation policies between regions amid the epidemic, so as to ensure the smooth flow of goods. For enterprises that have been greatly affected by the epidemic, the government should continue to give timely support like tax reductions and exemptions."