On March 5, the first session of the 13th National People's Congress was held. Premier Li Keqiang delivered a government work report, summarizing the achievements of the past five years and outlining key priorities for this year. 2018 marked a significant year, as it was the first full year of implementing the spirit of the 19th Party Congress, the 40th anniversary of China’s reform and opening-up, and a critical year for building a moderately prosperous society in all respects and advancing the 13th Five-Year Plan. As such, discussions on the automotive industry during the session took on added importance.
The image above highlights key trends in the automobile industry from the perspective of the 13th NPC. Over the past five years, the government has made steady progress in various areas, leading to significant changes in both the economy and the environment, which have created a new development landscape for the automotive sector.
Economically, China's GDP rose from 54 trillion yuan to 82.7 trillion yuan, with an average annual growth rate of 7.1%. Consumption became a stronger driver of growth, with its contribution rising to 58.8%, while the service sector expanded to 51.6% of the economy. High-tech manufacturing grew at an average of 11.7% annually. The "Internet +" initiative spurred the growth of big data, cloud computing, and the Internet of Things, transforming traditional industries and promoting the rise of emerging sectors. The "Made in China 2025" strategy is accelerating the development of advanced manufacturing, including intelligent and green production. Innovation and new energy are reshaping economic growth patterns and daily life, reinforcing China’s position as a global innovator.
Environmentally, efforts to combat pollution led to a more than 30% drop in PM2.5 levels in key regions and a reduction in heavy pollution days by half. Over 71% of coal-fired power units now meet ultra-low emission standards, and clean energy use increased by 6.3 percentage points. These improvements highlight the government's commitment to environmental protection.
In response to these developments, the government emphasized the importance of new energy vehicles in achieving "Made in China 2025." It also called for higher quality standards, aiming to foster a "quality revolution" in Chinese manufacturing. Additionally, the report supported the development of artificial intelligence, pushing for smart industries and improved consumer experiences. AI integration in the auto industry is already transforming vehicle functions, making them more intelligent and convenient.
To further reduce emissions, the government set targets for a 3% decline in sulfur dioxide and nitrogen oxide emissions and continued efforts to cut PM2.5 levels. This sets the stage for greater emphasis on energy efficiency and new energy vehicles. Meanwhile, policies like extending tax exemptions for new energy vehicles and removing restrictions on used cars aim to boost market demand and support sustainable growth.
In international trade, the government sought to open up markets further, lowering tariffs on automobiles and consumer goods, and encouraging foreign investment. This will increase competition but also bring opportunities for joint ventures, especially in the new energy vehicle sector.
Beyond these, the report also addressed the sharing economy, state-owned enterprise reforms, and private sector development, signaling broader support for innovation and entrepreneurship. State-owned enterprises were encouraged to become more efficient and competitive, while private businesses received policy support to thrive in the market.
Overall, the 2018 NPC session highlighted a clear direction for the automotive industry: embracing technology, sustainability, and openness. With strong government backing and evolving market dynamics, the future of the auto industry looks promising and dynamic.
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