China’s 10 ups and 10 downsYOU SANG-CHUL
The author is the head of the China Instituteat the JoongAng Ilbo.
As the year comes to a close, it is time to take a look back on 2021. What industries rose and fell in China this year? Chinese media Caijing 11 recently reported “10 declining industries” and “10 booming industries.” The magazine compared the first three quarters of 2021 to those of 2019 to check the rise and fall of each industry. The tenth declining industry was the interior and landscaping industry, a victim of the Chinese real estate market that was hit directly. The ninth was thermal power generation because of rising costs due to high coal prices. The eighth was the cinema industry affected by the Covid-19 pandemic. The seventh was the pig keeping and poultry industry after the price of feed went up.
The sixth place was the catering and lodging industry also affected by the pandemic, while the fifth was retailers and supermarkets as consumer behavior has drastically changed with online shopping. The fourth and third were tourism and airlines. But the second place was the private education market after the government implemented a policy to reduce homework and private education. The worst was the real estate industry as most companies are said to be in debt.
Some Chinese industries are cloudy but many others enjoy sunlight. The tenth booming industry this year was steel, thanks to rising steel prices. In ninth place was chemical raw materials, which benefitted from rising energy prices. The eight was the bio and pharmaceutical industry with exploding demand. The seventh is the passive electronic devices without “active functions” such as amplification or electrical energy conversion. It includes capacitors, resistors and circuits, and its future prospects are bright.
The sixth was non-ferrous metals, the fifth was solar power generation, and the fourth was medical devices. In third place was the lithium battery industry, whose demand is boosted by rapid development of vehicles running on new energy. The second was integrated circuits and chips — coveted items that were short in supply this year. The biggest growth this year was in the display industry. During the pandemic, non-face-to-face contact such as video conferencing increased. This year, Chinese industries were largely affected by the pandemic, a rise in raw material prices and new technologies. But it is worth noting that Chinese government policies can threaten the very survival of a certain industry, as seen in private education.
China recently convened the Central Economic Work Conference and finalized its economic stance for next year. It says, “Prioritize stability at the forefront and move forward in stability.” The language is gentle, but it contains a strong desire for growth. That suggests there is still room for economic cooperation with China.