Frost & Sullivan insights On May 30, the Operation Monitoring and Coordination Bureau of the Ministry of Industry and Information Technology released the operating conditions of the Internet and related service industries from January to April 2022, showing that platform enterprises mainly providing life services (including local life, car rental, travel, financial services, automobiles, housing, etc.) saw a year-on-year business revenue decrease of 20.2%, with the decline expanding by 2.8 percentage points compared to the first quarter. Cai Jinfeng, Executive Director of Frost & Sullivan Greater China, was interviewed by South China Morning Post to discuss the reasons behind the widening revenue decline of Chinese internet companies in the life service sector. Nanhua Morning Post Q: 'The revenue decline of enterprises in the life service sector has widened. From January to April, the business income of platform companies mainly providing life services (including local life, car rental and booking, travel, financial services, automobiles, housing, etc.) decreased by 20.2% year-on-year.' What are the reasons behind the widening revenue decline? " Cai Jinfeng Executive Director, Greater China, Frost & Sullivan   Cai Jinfeng: There are actually three main reasons for the significant decline this year. On one hand, it is due to the recurrence of the epidemic in various regions at the beginning of 2022, which has had some negative impacts on these enterprises related to living services. For example, travel: In 2021, the overall epidemic control was stable, and national tourism demand grew rapidly, with related enterprises gradually easing their underestimation from 2020. However, in 2022, due to the sporadic and local outbreaks of the epidemic, especially in popular destinations such as Jilin, Shanghai, and Yunnan, weak tourism consumption dragged down the entire tourism economy, further putting pressure on these travel-related businesses. Enterprises related to car rental and booking are also restricted because in cities where the epidemic occurred, residents' daily travel frequency has greatly reduced, and travel/business trips have been limited, affecting the demand for car rental and booking. This is why the revenue of these enterprises has also shown contraction. The impact of the epidemic on certain cities has exacerbated the shortage of automotive chips and the reduction in automobile parts production, leading to a decline in both automobile production and sales. As a result, automobile brands have also significantly reduced their advertising and promotion expenses, affecting the revenue of these platforms.   Secondly, 2021 was a relatively stable year for China, and the overall consumer-related market actually rebounded significantly. As a result, the year-on-year data decline appeared quite large. Lastly, due to the suspension of the online education sector, which had been developing rapidly under this category, in mid-2021, the revenue from all lifestyle-related platforms also showed a significant decrease.

Under the pandemic, many COVID-related concept stocks have ridden on the wave, and sectors related to COVID's industrial chain, such as testing, drugs, and vaccines, have also seen significant growth. What is the current market situation? And which investment opportunities are worth paying attention to? 2022 year 5 month 27 On the day, the third session of the Big Health Cloud Afternoon Tea, organized by the New Shanghai Business Medical Industry Sub-association, was successfully held. The theme of this event was 'Investment Strategies and Layout in the COVID-19 Industrial Chain'.   Frost & Sullivan Frost & Sullivan Mao Hua, Partner and Managing Director of Frost & Sullivan's Greater China Region, was invited to attend and delivered a speech on the current market situation and development trends of COVID-19 vaccines. Mao Hua said that the global COVID-19 situation remains severe, with domestic outbreaks occurring at multiple locations. New strains are emerging with stronger immune evasion and transmission rates. The new wave of spread has intensified the urgent need to increase vaccine coverage and iterate vaccines. It is difficult to eliminate the novel coronavirus in a short period.   Establishing a herd immunity barrier through vaccination, slowing down the rate of virus mutation, and protecting high-risk groups are the most effective measures to deal with the normalization of the epidemic. The main technical routes for COVID-19 vaccines globally are showing a parallel trend with multiple approaches. Among them, the development of four vaccine types is progressing most rapidly, namely   Inactivated vaccines, viral vector vaccines, recombinant protein vaccines, mRNA vaccine   , bringing more possibilities to the vaccine selection for recipients. The vaccines already on the market in China use inactivated vaccines, viral vector vaccines, and recombinant protein vaccines, with heterologous technologies mRNA The domestic research and development of the vaccine is still in the clinical stage, and it is expected to fill the current gap in this type of vaccine in China. To meet the urgent needs of epidemic control, the development of COVID-19 vaccines has been proceeding at an unprecedented pace in vaccine history. According to Mao Hua, under normal circumstances, the development process of a vaccine is long, typically taking from antigen identification to market launch. 10 - 15 A year, while the COVID-19 vaccine has only been in use 1 Less than a year.   "The multi-stage acceleration and upgrade during development has facilitated the rapid market launch of vaccines, and the feasibility of efficient development will fully mobilize enterprises' enthusiasm for innovation," said Mao Hua. The vaccine industry chain is vertically integrated, involving multiple fields. It is characterized by wide coverage and numerous processes. The COVID-19 pandemic has driven rapid development in industries and enterprises with a high degree of association with the vaccine industry chain.   Mao Hua believes that the high-end R&D and industrialization of vaccines in China still heavily rely on imports for key instruments, equipment, raw materials, etc. Achieving high-quality domestic substitution will ensure the autonomy and controllability of the entire vaccine industry chain, enhancing the stability and competitiveness of the vaccine industry chain.   At the same time, the pandemic has promoted the overall development of the upstream and downstream of the vaccine industry chain: COVID-19 vaccine research and development are in full swing, with vaccines gradually coming onto the market and shipments increasing. This has driven demand for products such as cell culture media, CXO and related fields are developing rapidly. Data shows that there are already 38 The COVID-19 vaccine has been approved. Among them, subunit vaccines account for the largest proportion. 11 Including vaccines WHO Global List of Essential Medicines. Currently, China has 7 The COVID-19 vaccines approved for conditional marketing or emergency use are mostly inactivated vaccines. With mature technology and R&D production experience, the frequency of adverse reactions is relatively low. Mao Hua pointed out that the COVID-19 pandemic has driven vaccine exports. Before the outbreak, China's vaccine export intensity was low.   2021 In 2021, China's vaccine exports both in quantity and value increased significantly, with its COVID-19 vaccine exports ranking second globally.   China has become the main supplier of COVID-19 vaccines to developing countries , The export targets are mainly low-income countries in Central Asia and Southeast Asia, as well as South America and North Africa.   In addition, the COVID-19 pandemic has changed the competitive landscape of pharmaceutical companies: mRNA Vaccines have made their way onto the historical stage, with excellent protection rates. Two mRNA Vaccine sales far exceed those of other COVID-19 vaccines. 2021 year Cormirnaty Global sales reached as high as 410 Billions of dollars, and Pfizer has also used this to become the pharmaceutical company with the highest drug sales. According to a Frost & Sullivan survey, the global current situation is 75 country, targeted at 199 Vaccine candidates are being developed and rolled out 704 Phase clinical trial; 37% Research products entering clinical trials III Periodically, traditional subunit vaccines account for the largest proportion, followed by new mRNA Vaccine research and development is in full swing. China's pipeline of COVID-19 vaccines includes nebulized inhalation vaccines. mRNA Vaccines account for the largest proportion, among which Aibo Biotech has made the most progress, with its product entering clinical trials. III In the meantime, CanSino Biologics, which has already launched COVID-19 vaccine products, has also recently obtained mRNA Clinical approval document for COVID-19 vaccine. Currently, global regulatory authorities FDA , EMA , NMPA Policies have been introduced one after another, allowing COVID-19 vaccines to be approved for emergency use authorization or conditional marketing. Policy incentives and market demand will jointly drive breakthroughs in vaccine technology.   "In the future, COVID-19 vaccines need to make breakthroughs in vaccine protection efficacy, long-term protection capabilities, and large-scale production capacity. Solving these challenges will further drive the vigorous development of the industry," Mao Hua concluded. Subsequently, under the chairmanship of Dou Dan, co-founder and chairman of Shanghai Trace Investment Management Co., Ltd., Mao Hua, together with Li Bin, a specially appointed professor at the School of Medicine of Shanghai Jiao Tong University and deputy director of the Shanghai Institute of Immunology, Ye Feng, co-founder of Shanghai Xiading Investment Management Co., Ltd., and Ye Weitao, managing partner of Shanghai Lize Investment Management Co., Ltd., held a wonderful roundtable dialogue between scientists and investors focusing on three highly socially concerned issues: 'The scientific principles of viruses, the feasibility of vaccine drug research and development, and the socio-economic problems brought about by epidemic prevention measures.'

Frost & Sullivan insights In the first four months of this year, China's software business revenue increased by 10.8% year-on-year, making it one of the few industries that maintained a high growth rate despite the impact of the pandemic. On May 25th, People's Daily published an article calling on the domestic software industry to firmly grasp the initiative in innovation and development, enhance their sense of crisis, strengthen their confidence in innovation, and win broader development space by combining research with application. What is the reason for the rapid growth of the software business? Which sub-sectors have driven the rapid development of this industry in recent years? At present, which software technologies in China are subject to foreign control? How should governments and enterprises respond to gain the initiative? Dr. Wang Xin, a global partner at Frost & Sullivan (referred to as 'Frost & Sullivan') and President of Greater China, recently spoke with Nanhua Daily to discuss the current development status of the software industry.   Nanhua Morning Post Q: In the first four months of this year, China's software business revenue increased by 10.8% year-on-year. It is one of the few industries that have maintained a high growth rate despite the impact of the pandemic. Could you explain the reasons for this rapid growth?   Dr. Wang Xin: In recent years, the dividends of national policies have been continuously released. The high-quality development of the software industry has risen to a national strategy, and the independent innovation capabilities of local enterprises have been greatly enhanced, completing a transformation from scratch. Product performance has approached the international medium level. Against the backdrop of accelerating domestic substitution, the domestic software industry is entering a golden acceleration period from 1 to N. It not only occupies more market share in the domestic market but also gradually begins to go global, competing with overseas manufacturers in high-end markets.   On one hand, the pandemic has accelerated the digital transformation of enterprises and public sectors. Mature domestic operating systems, databases, and office software are widely used in government affairs, enterprises, education, and other fields. Online handling of government affairs and enterprise collaboration have become the new normal after the pandemic.   On the other hand, China possesses a vast and complete industrial system. The fierce competition in the global industrial chain has made the digital transformation of the industrial production side an urgent necessity. As the 'brain' of factories, industrial informatization software platforms can significantly shorten product delivery cycles and help enterprises effectively reduce costs and increase efficiency. In addition to the industrial sector, domestic software has formed large-scale and in-depth applications in fields such as energy, manufacturing, telecommunications, finance, retail, etc., jointly promoting the steady growth of the software market. Q: What are the main sub-sectors that have driven the rapid development of the software industry in recent years? Cloud services? Industrial Internet platforms? Which companies have performed outstandingly? " Dr. Wang Xin: With the continuous deepening of digital transformation in Chinese enterprises and the gradual improvement of related IT infrastructure, the cloud service industry in China has developed rapidly. The annual compound growth rate over the past five years has reached over 30%, and its proportion of total IT expenditure in China has been continuously increasing. Cloud service providers represented by Huawei Cloud, Alibaba Cloud, and Tencent Cloud have all achieved significant growth. On the other hand, as the world's largest manufacturing country, China has a huge market space for industrial software, with market growth rates significantly faster than the global average. The technological gap between domestic and foreign manufacturers is continuously narrowing, and their market share is gradually increasing.   Q: The People's Daily article 'Let More Domestic Software Show Their Skills' mentions 'Practice has repeatedly told us that key technologies cannot be obtained through purchase or negotiation.' What are some examples of how we have been turned away from Western key technologies?   Dr. Wang Xin: Taking the chip industry as an example, although China has numerous chip design manufacturers, the industrial software used for chip design mainly comes from abroad. For instance, leading global market share holders of EDA industrial software are all from the United States. If foreign companies stop licensing and using EDA chip design software, the R&D work of domestic chip design manufacturers will be severely affected.   Q: At present, which software technologies in our country are subject to foreign control? How should the government and enterprises respond to gain the upper hand?   Dr. Wang Xin: Although there are a wide variety of application software in our country, the basic software industry is relatively weak compared to developed countries and has long been in a state of 'being controlled by others'. Domestic basic software does not have a deep enough understanding of core technologies, and there are still certain gaps between its product performance, user experience, stability, and maturity with mainstream foreign products. Enterprises related to the ecosystem lack in-depth cooperation, making it difficult to form systematic application capabilities, and an industrial ecosystem that develops healthily has not yet been formed.   In this situation, the government needs to strongly encourage the development of professional talents, increase investment in basic software fields such as operating systems, databases, and middleware to fill the talent gap. At the same time, it is necessary to strongly support basic software R&D enterprises to help them overcome difficulties in research and development investment. On the other hand, enterprises within the industry need to be patient in gradually breaking through key technologies and developing into capable enterprises with unique competitiveness. Basic software technology has high technical barriers and requires substantial investment, necessitating long-term accumulation of technical experience. Therefore, both the state and enterprises need long-term joint efforts to create a virtuous cycle of 'government, industry, academia, research, and application' so as to truly gain the initiative in the field of software technology.

Frost & Sullivan insights According to recent data from the Shanghai Shipping Exchange, the Shanghai Export Container Freight Index has maintained a downward trend for 14 consecutive weeks. Moreover, two of the world's major shipping giants are bearish on freight rates in the second half of the year. Recently, Hapag-Lloyd hinted that spot freight rates may drop significantly in the second half; earlier, Maersk also expressed an optimistic attitude towards spot freight rates in the second half of the year during a corporate telephone conference following the release of its first-quarter financial report. What are the main reasons for the decline in container freight rates? What is the outlook for freight rates in the post-petroleum market? Wei Li, Executive Director of Frost & Sullivan's Greater China Region Recently, an interview with Securities Daily was conducted to jointly interpret the future trend of the container market. The freight rates for popular routes dropped by about 60%, and shipping giants pulled out of the market to protect their freight prices   Securities Daily The super-long cycle of container shipping, which has been on fire for two years, may have reached an inflection point. According to recent data from the Shanghai Shipping Exchange, the Shanghai export container freight rate index has maintained a downward trend for 14 consecutive weeks.   "Currently, the volume of cargo is decreasing. For the Asia to West Coast route, the spot freight rate for standard containers has remained at around $6,500, a reduction of about 60% compared to the peak of $20,000 last year," said an unnamed shipping industry insider to the Securities Daily on May 18th.   Moreover, the two global maritime giants are bearish on freight rates for the second half of the year. Recently, Hapag-Lloyd hinted that spot freight rates for the second half of the year may drop significantly; earlier, Maersk also expressed an optimistic attitude towards spot freight rates for the second half of the year during its corporate conference call following the release of the first-quarter financial report.   Has the demand inflection point arrived? The freight rates for popular routes dropped by about 60% The supercycle of consolidated transportation that had persisted for some time may have temporarily come to an end.   On May 16th, data from the Shanghai Shipping Exchange showed that the comprehensive freight rate (CCFI) for container shipping rose by 1% week-on-week last week (May 9th - May 13th, the same below), marking a cumulative decline of 15% since mid-February. Among them, the freight rate on the US West Coast route rose by 3% week-on-week compared to the CCFI (reflecting the settlement price of container shipping companies); SCFI (reflecting the booking price of container shipping companies) remained unchanged; and FBX (reflecting the clearing price of freight forwarders) decreased by 12%. To power Executive Director, Greater China, Frost & Sullivan Regarding the main reasons for the decline in container freight rates, Wei Li believes that Frost & Sullivan's Executive Director for Greater China has identified several aspects. "Since early this year, the epidemic prevention and control situation in some domestic regions has been unstable. The various control policies triggered by the escalation of the epidemic have posed a huge challenge to the supply chains of various industries, affecting manufacturing shipments and overall maritime trade volumes. This has changed the situation where 'containers are hard to find' globally since the second half of last year. During the prevention and control period, the volume of fixed containers decreased compared to previous years, affecting container freight rates. On the other hand, since the second half of last year, major shipping companies have continuously increased their fleet layout, opening more near- and far-ocean routes. With container capacity exceeding demand, prices have declined. Furthermore, changes in consumer behavior brought about by international situations and the ongoing inflation in Europe and America have also indirectly triggered maritime trade and freight rates." In terms of demand, since the beginning of the year, the volume of freight shipped by US liner services has declined from the high growth rate seen in 2019. This is because after the impact of the pandemic weakened the supply chain, fiscal stimulus may be reduced, and the inflection point of liner demand should have arrived. 'The congestion at US West Coast ports has improved somewhat, and the number of ships waiting to berth at Los Angeles Port has dropped from its high level in the past three months. As the impact of the US pandemic gradually weakens, it is expected that supply bottlenecks will also be gradually alleviated,' said the above-mentioned shipping industry insider.   Regarding the future market of the container shipping industry, Yue Xin, an analyst in the transportation sector at Guotai Junan Securities, believes that there are uncertainties about the market conditions in the second half of the year. "The impact of overseas epidemics is gradually weakening, and it is expected that the net profit margins of container shipping companies will continue to remain high in the first half of the year. However, there are risks of uncertainty regarding the high prosperity of the industry in the second half."   "On one hand, shipping companies have maintained their previous shipping schedules, but the export of goods from China to Europe and America has significantly decreased, reversing the supply-demand relationship. As a result, popular routes such as West Coast container shipping rates (standard containers) have fallen to around $6500, while the highest price on this route was as high as $20,000, a reduction of about 60% compared to the peak. Therefore, the three major shipping giants have recently started to withdraw ships to prevent a sharp drop in freight rates." The above-mentioned shipping expert added to the Securities Daily reporter.   According to the data disclosed by a listed A-share container shipping company, freight volume shows a downward trend. In the first quarter of 2022, the company's containerized freight volume was 6.1617 million TEUs, a year-on-year decrease of 9.17%, with a fleet capacity of 2.9419 million TEUs.   Regarding the future trend of container shipping, Galaxy Futures stated in their research report that in the short term, China's epidemic has not fully recovered, and with the active resumption of work and production in Southeast Asian countries, China's export demand is being diverted. It is expected that container shipping prices will continue to weaken in the short term. In the medium to long term, against the backdrop of geopolitical conflicts, global inflation and interest rate hikes are expected to suppress commodity demand, making it inevitable for container shipping prices to fall back from high levels.   Freight rates plummeted Shipping giant Asia-Pacific routes voluntarily suspended voyages "3 and 4th months saw immediate freight rates for group shipments continue to decline. Recently, shipping companies have withdrawn their ships, so prices have slightly warmed up a bit, and space has become a bit more scarce. However, overall it is very difficult to return to the state last year when one ship was hard to find. Last year, there were many goods but ships were stuck at foreign ports, forcing a reduction in schedules. This year's situation is just the opposite," revealed an unnamed freight forwarder from Shanghai to the Securities Daily reporter.   Not only is ocean freight falling, but Seaintelligence's latest data shows that the demand for sea container transportation has also declined for the fifth consecutive week.   Facing the continuous decline in freight rates and the continuous reduction in export cargo volume, the container transportation market is 'over-supplied'. In order to maintain high freight rates, international maritime giants have taken measures such as canceling some voyages and increasing empty flights to keep prices stable.   According to public information, the Maritime Alliance is preparing to cancel more than one-third of its Asian routes within the next few weeks. Mediterranean Shipping recently announced that due to persistent challenging market conditions leading to congestion in the entire supply chain and delays in shipping schedules, it will cancel routes from Asia to the US East Coast. Hapag-Lloyd has recently issued a schedule adjustment notice, stating that services on its Asian-to-Mediterranean route, including MD1, MD2, and MD3, will be cancelled for voyages calling at Shanghai Port, Ningbo Port, and Busan Port over the next eight weeks.   Maersk issued a notice on May 10th: The unprecedented severe port congestion globally continues to cause delays on several routes from Asia to the Mediterranean. To provide our customers with better visibility of schedules, after careful review of schedules, Maersk has decided to adjust sailings starting from the following voyages to match the actual number of weeks before departure for ships and services.   Even though the cancellation of ships is inevitable, it cannot stop industry insiders from being bearish on the container market in the second half of the year.   "Since 2022, despite the peak period of the container market, congestion problems still exist at some major overseas ports, which will continue to affect the maritime logistics supply chain and may lead to further declines in freight rates. At the same time, affected by geopolitical situations and the COVID-19 pandemic, the global supply chain continues to face immense pressure, which is expected to continue impacting container freight rates." Xiang Weili added to a reporter from Securities Daily. *This article is reprinted from 'Securities Daily', with reporter Shi Lu. The original title was 'Popular Routes' Freight Rates Drop by Nearly 60% as Shipping Giants Cancel Ships to Protect Their Prices'.

Frost & Sullivan insights On May 10th, the National Development and Reform Commission issued the '14th Five-Year Plan for the Development of the Bioeconomy', which is China's first five-year plan for the bioeconomy and also the first top-level design in the field of bioeconomy. The 'Plan' identifies four key development areas of the bioeconomy: biomedicine, bio-agriculture, biomass alternative applications, national biosafety risk prevention and control, and the construction of governance systems. What is the background for the introduction of this policy? Why was it introduced at this juncture? How should we understand the concept of bioeconomy? What is the current status of bioeconomy in China? Which sectors will benefit from this policy? Mr. Mao Hua, Partner and Managing Director of Frost & Sullivan's Greater China region, was interviewed by 21st Century Business Herald to discuss the development status of the bioeconomy sector in China and the impact that the 'Plan' will have on the sector after its implementation.   21st Century Economic Report "The bioeconomy has always been well-known in the industry and is not a newly emerging concept. The development of some core technologies and related technology applications are gradually forming industrial scale, such as agricultural breeding and super rice. The release of this 'Plan' is an even more proactive approach to facing up to the bioeconomy, but it is also because related industries are still in their initial stages and require further national planning to form an industrial discussion circle." Recently, Dr. Tian Shilin, Chief Scientist at Novogene, analyzed for reporters from 21st Century Business Herald.   The aforementioned plan mentioned is the '14th Five-Year Plan for the Development of the Bioeconomy' (hereinafter referred to as the 'Plan'), which was recently released by the National Development and Reform Commission. This is China's first five-year bioeconomic plan and the first top-level design in the field of bioeconomy. At present, China has achieved great success in the development of the bioeconomy, with the industrial scale continuing to grow rapidly. A complete and functional industrial system has taken initial shape, and a number of bio-industrial clusters have become new engines leading regional development. Important original breakthroughs have been made in basic research in the biofield, and innovation capabilities have been significantly enhanced.   Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China, explained to the 21st Century Economic Report that the bioeconomy refers to the sum total of all economic activities that produce food, energy, biotechnology products, and services through sustainable methods using renewable natural resources. However, there is still a gap in the top-level design and coordinated planning for the development of the bioeconomy. China's bioeconomy faces many challenges, including weak original innovation capabilities, key core technologies being controlled by others, the ongoing evolution of the global pandemic leading to the superposition of traditional biosecurity issues with new ones, relatively weak original capabilities in the biotechnology industry, and an incomplete system for the protection, development, and utilization of biological resources. Wang Xiang, Deputy Director of the High-Tech Department of the National Development and Reform Commission, also pointed out that China's innovative development in bioeconomy still faces many challenges. For example, original innovation capabilities are still relatively weak, with insufficient accumulation of basic life science theories, underlying key common technologies, high-end instruments and reagents, and bioinformatics resources.   The 'Plan' has identified four key development areas for the bioeconomy, namely biomedicine, bio-agriculture, biomass alternative applications, national biosafety risk prevention and control, and the construction of governance systems. It also proposes to strengthen original and leading basic research, emphasize accelerating technological innovation and industrial application, build a national strategic scientific and technological force, improve the mechanism for tackling scientific research challenges, accelerate breakthroughs in development bottlenecks, achieve self-reliance and self-improvement in science and technology, and enhance the security and stability level of the industrial chain and supply chain.   The underlying technology is mature and the industry has achieved scale. In recent years, major countries have increased their support for fields such as life sciences and biomedicine, continuously investing more in areas including genomics, brain and cognitive science, synthetic biology, precision medicine, biomedicine, high-end medical devices, bio-breeding, biomass energy, and biosafety. Especially affected by the COVID-19 pandemic, many national governments and major biopharmaceutical companies, including China, have increased investment in biosafety, vaccine, and drug research and development, objectively driving the bios economy into an accelerated development phase.   In response, Mao Hua pointed out that the bioeconomy will form the next economic growth point in areas such as human health, green agriculture, bioenergy, and biosecurity. The 'Plan' also focuses on selecting four major fields: biomedicine, bio-agriculture, biomass substitution applications, national biosecurity risk prevention and control, and the construction of governance systems. Tian Shilin pointed out to the 21st Century Economic Report reporter that the bioeconomy has formed a certain scale of industries in all the above major fields, and each industry has also developed a variety of mature core products to meet market demand, such as basic scientific research services, vaccine development, new drug research and development, tumor detection, molecular breeding, etc. For example, in the field of agricultural breeding, gene sequencing technology has catalyzed numerous molecular breeding products, completed the mapping of large numbers of economic crop genomes, discovered a large number of genetic molecular markers, and provided extensive resources for precise agricultural molecular breeding.   "Economy involves industries, the large-scale or directional application of certain technologies. For example, based on the discovery of the DNA double helix structure in 1953 and the decoding of the human genome in 2000, with the rapid development of modern biotechnology such as genetic engineering, biotechnology has deeply integrated with information technology, agricultural technology, etc. High-throughput sequencing technology, which has developed rapidly over the past 20 years, has broken through the Moore's Law curve in terms of cost, throughput, and industrial scale. Many talents and resources have been invested in this field, accelerating its formation and creating an economic scale. The development of technology has also brought about a rapid development period for the bioeconomy." Tian Shilin pointed out that the development of technology has gradually formed sub-sectors within industries and led to scaled development. For instance, in the field of gene sequencing, the technology service market serving basic life science research has already formed economies of scale. Jiang Jiang, a researcher at the China Academy of Macroeconomic Research, also gave an example. Ten years ago, the vast majority of pregnant women and patients were still skeptical about the effectiveness of genetic testing for fetal conditions and early detection of cancer; today, millions of consumers are willing to pay for it. Five years ago, people were confused about the utility of nucleic acid testing; today, nucleic acid testing has become the 'gold standard' for diagnosing COVID-19 infection. In addition, more and more non-renewable petrochemical-based products are being replaced by renewable bio-based ones, biomass energy has become an important part of renewable energy, and crops modified using modern biotechnology have seen significant improvements in both yield and quality.   The application of biomass substitution technology has also led to rapid development in related industries. Zhao Yan, Chairman and General Manager of Huaxi Biotechnology, cited hyaluronic acid as an example. Previously, 200 kilograms could produce only 1 kilogram of hyaluronic acid from a rooster's comb. At that time, hyaluronic acid was more than 15 times more expensive than gold; one gram of hyaluronic acid cost $100, while one gram of gold only cost $6. However, now through cell factory production, synthetic biology is not used, and the cost is less than 1% of the original chicken comb extraction method, and this efficiency is not as high as that of synthetic biology. This has also led to a rapid increase in hyaluronic acid production capacity and the continuous expansion of the industry's scale.   It is worth noting that biosecurity is also highlighted in the 'Plan'. 'In line with the new trend of shifting from passive defense to active assurance, we will strengthen the construction of national biosecurity risk prevention and control systems and governance frameworks to meet the people's new expectations for better biosecurity.' In this regard, Tian Shilin pointed out that within the four major areas of biomedicine, bio-agriculture, biomass substitution applications, national biosecurity risk prevention and control systems, and governance frameworks, the construction of these systems is actually aimed at providing assurance for the first three areas.   Strengthen basic research and accelerate transformation Although China's bioeconomy has developed rapidly in recent years, there are still issues such as weak original innovation capabilities and key core technologies being controlled by others.   Wang Xiang also believes that China's innovative development of the bioeconomy still faces many challenges. For example, original innovation capabilities are still relatively weak, with insufficient accumulation in basic life science theories, underlying key common technologies, high-end instruments and reagents, bioinformatics resources, etc. The technology innovation system, which is enterprise-oriented, market-driven, and deeply integrated with industry, academia, and research, is still not perfect. There are also relatively few internationally competitive enterprises, and adverse factors such as the impact of the pandemic on international openness and cooperation exist.   Wang Xuegong, Vice President of the China Pharmaceutical Enterprise Management Association, also pointed out that there are some problems in the field of biopharmaceutical innovation in China. For example, products mainly follow in innovation, R&D is highly homogeneous, and there are gaps between some cutting-edge technologies and international advanced levels. Basic research in life sciences and biotechnology is the driving force behind pharmaceutical innovation. Basic research findings give rise to breakthroughs in new drug discovery. It is crucial for China's biopharmaceutical innovation to focus on the future and be global-oriented, strengthen basic research, and enhance original innovation capabilities.   In this regard, the 'Plan' also proposes to strengthen original and leading basic research. For instance, it aims to target cutting-edge fields such as clinical medicine and health management, new drug development, brain science, synthetic biology, biotechnology breeding, prevention and control of emerging infectious diseases, and biosafety, by implementing major national scientific and technological projects and key research and development programs. It accelerates the creation of a national strategic scientific and technological force in the biological field, actively gathers large teams, resources, projects, and achieves significant breakthroughs.   Jiang Jiang believes that it is necessary to align with the world's cutting-edge scientific and technological advancements in the field of life sciences, increase investment in basic and applied research in life sciences, and continuously promote collaborative R&D among industry, academia, research institutions, and healthcare. Focusing on directions related to the world's scientific and technological frontiers in life sciences, support a number of major scientific and technological infrastructure and innovation platforms. Innovate in the methods of capital investment and operational management models. During the operation of facilities and platforms, introduce various methods and channels for hospitals, enterprises, third-party testing institutions, etc., to participate in testing and feedback. Closely connect with the urgent requirements of implementing the Healthy China strategy, especially addressing the 'bottleneck' issues that constrain the application and promotion of biotechnology, and accelerate the deployment and promotion of a new batch of biotechnological breakthroughs. Xu Ruiming, Director of the Institute of Biophysics at the Chinese Academy of Sciences, pointed out to the 21st Century Economic Report that the development plans of the state, the academy, and the institute all clearly require a deep integration of basic research with national needs. Only by fully supporting the deep integration of industry, academia, research, and application can we fight a tough battle for key core technologies and improve the overall efficiency of the innovation chain. The Chinese Academy of Sciences has many research achievements and basic research, and in the future, it also hopes to better transform these into industry applications.   Jiang Jiang believes that, similar to information technology, the economic attributes of biotechnology are innate, which means that providing biotechnology products and services will be profitable. To return to the economic attributes of biotechnology, it is necessary to start from multiple aspects to ensure that biotechnology enterprises engaged in research and development, production, and service can obtain reasonable economic returns. Whether biotechnology enterprises can accurately grasp market demand, especially in the ultra-large domestic market, is key for innovative enterprises in the bioeconomy field to achieve profitability and sustainable development, as well as for China's biotechnology enterprises to cope with the international scientific and technological innovation environment.   In Tian Shilin's view, the 'Plan' plays a guiding role in the development of the bio-economy. Enterprises gradually form markets through technological advancements, while government documents play a leading and regulatory role in the development of enterprises and markets. At the same time, the introduction of the 'Plan' has also made more people face up to the bio-economy, leading to layered discussions and an atmosphere of horizontal and vertical technological penetration and academic exchange within industries. This is also beneficial for the development of biotechnology companies and is a great boon for technology service companies including Novogene.   RinoGen's scientific research services and products can assist researchers in scientific exploration, providing 'tools' for more scientific research, including basic species genome research, animal and plant development and stress studies, crop and livestock breeding, single-cell omics research, biomarker omics research, and population cohort studies.   Frost & Sullivan Insight & Extended Readings   Q: What is the background for the release of the '14th Five-Year Plan for the Development of the Bioeconomy'? Why was this plan released at this time?   A: During the "14th Five-Year Plan" period, efforts will be made to elevate the total scale of the bioeconomy to a new level, with a significant increase in the number of enterprises with annual operating revenues exceeding 10 billion yuan. Previously, China's "14th Five-Year Plan" and the outline of long-term goals for 2035 also proposed to promote integrated innovation of biotechnology and information technology, accelerate the development of industries such as biomedicine, biological breeding, biomaterials, and bioenergy, and strengthen and expand the bioeconomy. Basic frontier research in life sciences continues to be active, and the wave of biotechnological revolution sweeps across the globe and accelerates its integration into economic and social development, providing new solutions to major challenges such as human life and health, climate change, resource and energy security, and food security. To systematically plan and promote the high-quality development of China's bioeconomy, the National Development and Reform Commission issued the "14th Five-Year Plan for Bioeconomic Development," which is also the first top-level design in the field of China's bioeconomy.   Q: How do you understand the concept of bioeconomy?   A: The bioeconomy refers to the sum total of all economic activities that produce food, energy, biotechnology products, and services through sustainable methods, utilizing renewable natural resources. It encompasses a wide range of fields such as biomedicine, bioagriculture, bio-manufacturing, and bioenvironmental protection. It is a strategic emerging industry with innovative vitality, broad coverage, and profound impact.   The bioeconomy is an economic form characterized by the development and progress of life sciences and biotechnology, based on the protection and utilization of biological resources, and extensively integrating industries such as medicine, health, agriculture, forestry, energy, and environmental protection.   The 'Plan' proposes five principles for the development of the bioeconomy: First, adhere to innovation-driven development; second, promote in a systematic manner; third, pursue win-win cooperation; fourth, benefit the people; and fifth, ensure controllable risks.   Q: What is the current status of the bioeconomy in our country?   A: China has identified scientific and technological innovation and industrial development in related fields of the bioeconomy as strategic priorities, driving significant progress in the bioeconomy. The scale of the bioeconomy's development continues to expand, and the bioindustry system is becoming increasingly complete, forming a complete industrial chain from research and development, manufacturing to application. China has become the world's largest exporter of bulk drugs, the second-largest consumer market for pharmaceuticals and medical devices, and an important exporter of pharmaceutical R&D services.   As one of the countries with the richest biological resources in the world, China has a complete range and system of biotechnology industries, which provides favorable conditions for accelerating the development of the bioeconomy. However, there is still a gap in top-level design and coordinated planning for the development of the bioeconomy. China's bioeconomy faces many challenges, including weak original innovation capabilities, key core technologies being controlled by others, ongoing global pandemics that continue to evolve and lead to the overlapping of traditional and new biosecurity issues, relatively weak original capabilities in the biotechnology industry, an incomplete system for the protection, development, and utilization of biological resources, and a lack of top-level design and coordinated coordination for the development of the bioeconomy.   Q: In which areas will this policy be beneficial for development? What impacts will it have on related industries and enterprises?   A: Areas of positive impact: The Plan clearly identifies meeting the people's new needs for 'medical care', 'food', 'quality of life', and 'security' as key areas for the future development of the bioeconomy. On the other hand, the Plan also specifies accelerating the widespread application of biotechnology to empower industries such as health, agriculture, energy, and environmental protection, promoting the deep integration of biotechnology with information technology, and comprehensively enhancing the diversification level of the bioindustry.   The bioeconomy covered extensively in the Plan includes four key development areas: First, to adapt to the new trend of shifting from 'treating diseases' to 'centering on health', developing biomedicine for people's life and health; second, to conform to the new trend of shifting from 'solving food and clothing needs' to 'nutritional diversification', developing bio-agriculture for agricultural modernization; third, to follow the new trend of shifting from 'pursuing capacity and efficiency' to 'adhering to ecological priority', developing biomass substitution applications for green and low-carbon purposes; fourth, to adapt from 'passive defense' to 'active assurance', strengthening the construction of national biosecurity risk prevention and control systems. Among these, the pharmaceutical industry is crucial to people's life and health and is an important focus for the development of the bioeconomy. It has also played a significant role in the prevention and control of COVID-19 and has received widespread attention.   Impact on the development of related industries and enterprises: The Plan proposes to guide innovation resources towards the concentrated development of Beijing-Tianjin-Hebei region, Yangtze River Delta, and Guangdong-Hong Kong-Macao Greater Bay Area. It aims to cultivate a number of world-class leading enterprises in fields such as biomedicine, bio-agriculture, and bio-manufacturing; support the formation of large pharmaceutical companies with a high degree of internationalization and global layout; and further increase support for biotech companies listing on domestic capital markets.   Q: The 'Plan' has identified four key development areas for the bioeconomy, namely biomedicine, bio-agriculture, biomass alternative applications, and the construction of national biosafety risk prevention and control systems. Why are these areas chosen as priorities?   A: "The bioeconomy" has also been included in the "14th Five-Year Plan" and the "Outline of Long-Range Objectives through the Year 2035." It aims to promote integrated innovation between biotechnology and information technology, accelerate the development of industries such as biomedicine, biological breeding, biomaterials, and bioenergy, and strengthen and expand the bioeconomy. During the "14th Five-Year Plan" period, China's industrial development trend will show four "more prominent" aspects: more emphasis on technological innovation and self-reliance in science and technology, more focus on expanding domestic demand and consumption upgrading, more emphasis on carbon peak and carbon neutrality, and more emphasis on urban agglomerations. Diversified financial resources and social capital will further flow into green bio-industries, generating a trillion-level market prosperity and promoting the development and growth of a new generation of bio-economy. The bioeconomy will form the next economic growth point in areas such as human health, green agriculture, bioenergy, and biosafety. Therefore, priority is given to selecting four major fields: biomedicine, bio-agriculture, biomass substitution applications, national biosafety risk prevention and control, and the construction of governance systems.   *This article is reprinted from '21st Century Economic Report', with the reporter being Zhu Ping. The original article was titled 'The Scaling Up of Mature Technologies at the Bottom Layer: What Are the Shortcomings in China's Bioeconomy?'

Frost & Sullivan insights As of May 10, this year, seven companies including Sany Heavy Industry, Guoxuan High-Tech, Leopu Medical, Shanxiang Co., Ltd., Keda Manufacturing, Fangda Carbon, and Green Energy Materials have planned to issue GDRs and list on the Ruixin Stock Exchange. What are the advantages of issuing GDRs compared to issuing stocks? What is the purpose of domestic enterprises issuing GDRs, and are they suitable for domestic individual investors to participate in? Compared with other national stock exchanges, why has the Swiss Stock Exchange become the preferred destination for most companies? Frost & Sullivan's Executive Director for Greater China, Mr. Wei Li, recently interviewed by Securities Daily to discuss why domestic enterprises are increasingly choosing to issue GDRs on the Swiss Stock Exchange for listing.   Securities Daily On May 10th, Wang Jianjun, Vice Chairman of the China Securities Regulatory Commission (CSRC), pointed out in an interview that the CSRC will introduce more practical measures to expand opening up. Among these, it was mentioned that 'promoting the issuance and listing of interconnectivity depositary receipts by listed companies'.   The reporter found that the process of domestic listed companies going public on the Swiss Stock Exchange (hereinafter referred to as 'Swiss Exchange') with Global Depositary Receipts (GDRs) has accelerated recently, with several companies disclosing their latest progress. On May 10th, Shanxi Antler Co., Ltd. held its annual general meeting of shareholders for 2021 to review multiple proposals regarding the issuance of GDRs and listing on the Swiss Exchange. Prior to this, from May 7th to 9th, three companies including Guoxuan High-Tech, Keda Manufacturing, and Green Energy Materials also disclosed their latest developments regarding the issuance and listing of GDRs.   Since the release of the new interconnection regulations this year, a total of 8 listed companies have announced their plans to issue GDRs and list overseas. Seven of them have set the Hong Kong Stock Exchange as their destination, aiming for a 'zero' breakthrough. Another company has set its target on the London Stock Exchange.   On February 11 this year, the China Securities Regulatory Commission (CSRC) issued the 'Regulatory Provisions on the Interconnection and Connectivity of Depository Receipts between Domestic and Overseas Stock Exchanges', expanding the scope of interconnection and connectivity depositary receipts to Switzerland and Germany. Since then, Switzerland has become a popular listing destination.   According to relevant announcements, as of May 10th, this year, seven companies including Sany Heavy Industry, Guoxuan High-Tech, Lepu Medical, Shanxi Tongguo Co., Ltd., Keda Manufacturing, Fangda Carbon, and Green Energy Materials have planned to issue GDRs and list on the RSE.   In terms of planning the GDR listing process on the Hong Kong Stock Exchange, Keda Manufacturing has made the most progress. On May 9th, Keda Manufacturing issued an announcement disclosing that its GDR application has been accepted by the China Securities Regulatory Commission (CSRC). In addition to the aforementioned Suntech Co., Ltd., the related proposals of Guoxuan High-Tech will also be submitted to the shareholders' meeting for review on May 23rd. The related proposals for the GDRs of Green Motion and Lepu Medical have been approved by the board of directors. Additionally, Sany Heavy Industry and Fangda Carbon also plan to issue and list their GDRs.   The reporter from Securities Daily noticed that Guoxuan High-Tech has disclosed the approximate time for the issuance and listing of GDRs. Guoxuan High-Tech announced on May 7th that "this GDR project is conducive to accelerating the company's international strategic layout, building an international brand and image, and meeting the funding needs for overseas business development. Therefore, the company plans to complete the issuance and listing by the end of July." Based on current circumstances, the listings of Keda Manufacturing and Shan Shan Co., Ltd. are progressing faster, with more than one enterprise completing their listings on the Hong Kong Stock Exchange by the end of July.   "By issuing GDRs to raise overseas funds, enterprises can broaden their financing channels, attract high-quality strategic investors, and also enhance their international profile," said Yan Kaiwen, chief strategy analyst at Huaxin Securities, to the Securities Daily reporter.   "Domestic companies issuing GDRs can improve their corporate governance level and further optimize the shareholder structure." Zhu Zhengqin, head of UBS Investment Banking in China, said in an interview with a reporter from Securities Daily that issuing GDRs allows companies to introduce internationally and domestically renowned investors as shareholders, making equity more diversified, improving the corporate governance mechanism, and stimulating innovation vitality.   According to Zhu Zhengqin, judging from the progress of overseas regulatory initiatives, exchanges such as Germany and Switzerland after the expansion have provided support and actively promoted it. Currently, the Swiss Exchange has taken the lead in implementing rules, which is why companies often choose Switzerland as their listing destination for issuing GDRs. Xiang Wei, Executive Director of Frost & Sullivan Greater China Xiang Weili, Executive Director of Frost & Sullivan Greater China, told the Securities Daily reporter that Switzerland has a long history in financial services. Swiss banks are at the forefront of the world in cross-border private asset management, and the Swiss market is highly open to overseas investors. "The planning of overseas GDR issuance by domestic enterprises is related to the company's own financing needs and market preferences. The RCEA is relatively fair in investor protection and regulation, making it attractive to domestic enterprises," said Fu Rao, executive director of the International New Economy Research Institute.   Frost & Sullivan Insight & Extended Readings   Q: Compared to issuing stocks, what are the advantages of issuing GDRs? What is the purpose of domestic enterprises issuing GDRs, and are they suitable for domestic individual investors to participate in?   A: GDR refers to Global Depository Receipts, which are publicly issued globally and are a type of depositary receipt. Issued by depository institutions, they can be traded in multiple markets and are a financial tool used to raise funds in US dollars or euros. GDR allows companies' stocks to be traded in countries where there is no stock market, thereby enabling investors to invest in the stocks of companies that are not listed on local stock markets. The main purposes for domestic enterprises to issue GDR are: 1. Overseas circulation of shares. By issuing GDR, domestic listed companies can allow the equity rights represented by their stocks to circulate internationally under conditions where the stocks are within the country's borders, expanding financing channels, raising overseas funds, and attracting foreign investors; 2. Enhancing the international visibility of domestic enterprises. For individual investors, the threshold for participating in GDR is usually higher.   Q: Compared to other national stock exchanges, why has the Swiss stock exchange become the preferred destination for most companies?   A: Although the Swiss stock exchange has a smaller trading volume, it benefits from the long history of the Swiss financial industry, its leading position in cross-border private asset management among banks worldwide, and its high openness to overseas investors. On February 11th, the China Securities Regulatory Commission (CSRC) issued the 'Regulatory Provisions on the Interconnection and Connectivity of Depository Receipts between Domestic and Overseas Stock Exchanges', which is an 'upgrade' of the 'Regulatory Provisions on the Interconnection and Connectivity of Depository Receipts between the Shanghai Stock Exchange and the London Stock Exchange (Trial)' and expands the coverage of interconnectivity depositary receipts to Switzerland and Germany, setting a precedent for the market. At the same time, China's financial system is further deepening exchanges and cooperation with the financial systems of the aforementioned countries to promote efficient and mutually beneficial integrated development.   Q: How do you view the regulatory authorities' repeated statements 'accelerating the implementation of new regulations for overseas issuance and listing of enterprises'? What positive impact does this have on promoting overseas listings of enterprises?   A: This represents that the China Securities Regulatory Commission (CSRC) will expedite the research and introduction of a new round of measures, steadily expand the scope of targets for the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, promote the expansion of the Shanghai-London Stock Connect mechanism, and steadily increase the two-way opening of financial markets. Accelerating the implementation of new regulatory rules for corporate overseas issuance and listing, as well as maintaining smooth channels for overseas listings, will help Chinese enterprises effectively utilize international resources and capital to achieve better development.   *This article is reprinted from the 'Securities Daily' news section, with reporter Xing Meng. The original title was 'Seven listed companies plan to issue GDRs to list on the Ruixin Stock Exchange, with the earliest possible listing before the end of July'.

2022 Huawei Global Analyst Conference 2022 year 4 month 26 day -27 day, the 19 The Huawei Global Analyst Conference was successfully held in Shenzhen. The global transition towards a low-carbon and digital society has become a major trend in future development. To assist with global sustainable development, Huawei shared its relevant plans at the Global Analyst Conference: In the future, Huawei will work with partners to help build a green, environmentally friendly, and intelligent world through digital means, and promote global sustainable development.   Frost & Sullivan Frost & Sullivan The analyst team from Frost & Sullivan's Greater China region was invited to attend this event. As a long-term strategic partner of Huawei globally, Frost & Sullivan will work with Huawei to help achieve the great goal of global sustainable development by helping enterprises transform and grow digitally. Hu Houkang, rotating chairman of Huawei Highlights of the conference   Seize the Two Major Opportunities of Green Intelligence   Mr. Zhou Hong, President of Huawei's Strategic Research Institute, kicked off the conference by sharing "Future-oriented Scientific Hypotheses and Business Visions". Humanity has gone through 18 The mechanized era of the century, 19 The electrical age of the century and 20 In the information age of the century, nowadays 21 The century belongs to the era of intelligence. Globally 233 Driven by the comprehensive needs of countries and regions, the growth rate of the global digital sector has been rapidly increasing exponentially, and it will far exceed current growth rates in the future.   Zhou Hong stated that on the path to realizing a digital and intelligent society, cutting-edge science and technology have not made significant breakthroughs in the past few decades and are at a bottleneck. However, driven by global demand, technological frontiers can seek technological breakthroughs in multiple fields such as artificial intelligence, biomedicine, software, communications, computing, materials, manufacturing, energy, and more.   Zhou Hong believes: 'Our current imagination about the future may be conservative, so we need to be braver. We hope to work with academia and industry to reconstruct fundamental theories, architectures, and software, and jointly explore and create the future.' Science and technology need to expand cognitive boundaries, including energy, matter, phenomena, and laws, as well as to push beyond the limits of human perception and explore new computational methods to transform 'cognition' into 'implementation'. Mr. Hua Houkang, the rotating chairman of Huawei, then delivered a speech on 'Continuous Innovation, Building a Green and Intelligent World'. Mr. Hua Houkang stated that Huawei will firmly seize the two major opportunities of intelligent development and a low-carbon society, continue innovation, and move towards the future society. The three main directions of Huawei's current development still mainly cover 'continuous innovation', 'deepening digitalization', and 'digital low-carbon'. Mr. Hu Houkang emphasized the importance of innovation for Huawei and society at the meeting, stating that 2021 The annual operating revenue has decreased by nearly 30% We continue to increase R&D investment under such circumstances. Mr. Hu Houkun stated, 'Only continuous innovation can bring about a never-ending source of development momentum, creating value for customers and society. We hope to work with more customers and partners to build a green and intelligent world.' Mr. Hu Houkang made a statement at the meeting regarding Huawei's current business situation, indicating that Huawei will survive with quality in a global business environment facing numerous severe tests. Huawei will prioritize ensuring customer service and product quality, do a good job in customer service, and at the same time, accept challenges from the future and human development while ensuring the quality of its R&D team and corporate operations. Huawei Cloud's strategic tenet of 'Everything is a Service' remains unchanged   Huawei Cloud Global Marketing At the meeting, Shi Jilin, President of Sales Services, stated that as of 2021 At the end of the year, Huawei Cloud has served 600 Multiple Government Clouds, China 6 Large countries have banks, major joint-stock commercial banks, and insurance companies. 30 Multiple smart airports, 40 Multiple Internet innovation centers, as well as 1.7 Ten thousand manufacturing enterprises have achieved digital transformation. Huawei Cloud is committed to building a multi-cloud ecosystem for governments and enterprises to meet the needs of different customers. During the meeting, the product department of Huawei Cloud further explained Huawei's global product layout and technical development direction, demonstrating that Huawei has always designed and developed products with "customer convenience" in mind to help customers better utilize cloud functions. 2022 In 2023, Huawei Cloud will continue its strategic tenet of 'everything is a service' and expand globally across regions and industries. Shi Jilin said: 'Huawei Cloud will build KooVerse A global network, building the best-in-class infrastructure as a service; focusing on four development production lines including digital content production and data governance; continuously deepening aPaaS Strategy: Open up more experiences and services; and through consulting services, work with enterprises to plan their cloud migration paths. At the same time, we will deepen innovation in cloud-cloud collaboration models to help enterprises create greater value; assist more Chinese companies in setting sail for overseas markets and exploring global opportunities. " Huawei Cloud Global Marketing Sales Services President Shi Jilin Based on the original intention of "Global Cloud", it builds a solid bridge for overseas enterprises.   The Frost & Sullivan team invited to participate in the conference had an in-depth discussion with Ms. Shi Jilin on global cloud overseas layout and the development of Chinese outbound enterprises at the meeting. 2017 year 3 Moonflower was established CloudBU Today, having become one of the five global clouds, Huawei Cloud's positioning as a 'global cloud' has never changed. Based on this original intention, Huawei Cloud adheres to the customer-first philosophy, deeply analyzes customer needs, and continuously increases R&D investment, using digital methods to explore an intelligent future for humanity. Ms. Shi Jilin further stated during the meeting that the global cloud's overseas layout is not limited to better assisting Chinese enterprises in going global, expanding their footprint, but rather to serve global customers more extensively and achieve deep cultivation globally. On this basis, Huawei will do its best to provide better services for Chinese enterprises going global, help them build good bridges, and ensure effective sharing between overseas branches and headquarters. For Chinese outbound enterprises, Ms. Shi Jilin also offered two suggestions on this occasion: 1 ) It is necessary to have a firm sustainability strategy and form its own operational model; 2 ) Make good market matching, comply with local regulations, protect corporate safety, and make good use of local resources. Ms. Shi Jilin said: 'The journey to go global sounds wonderful, but it is challenging to put into practice, yet it remains a very important path that must be taken. " Interpretation by Frost & Sullivan Analysts Regarding this Huawei Global Analyst Conference, the Frost & Sullivan team has the following views:   First, whether the company can firmly grasp the two major main avenues in the future is at the core of Huawei's construction of long-term competitiveness.   2021 In [year], although the smartphone business was affected by chip sanctions, net profit was able to show initial signs of recovery B The signs of stabilization in terminal businesses.   2022 In [year], Huawei needs to firmly grasp the two major opportunities for human social development: digitalization and low-carbonization, clarify its strategic direction, and build long-term core competitiveness to ensure stable net profit growth;   Second, 'technical intensity' + The improvement in talent concentration is expected to become a breakthrough strategy for Huawei's chip supply.   Due to the higher requirements for space volume and performance of mobile phone chips, Huawei's chip supply problem in the short term remains difficult to resolve. By focusing on technology and talent, it is expected to provide a certain degree of internal support for Huawei's chip supply chain;   Third, with a concentrated presence of senior executives, Huawei Cloud is priming itself for an explosive surge.   Currently, the digital transformation space in cloud industry ecosystems and sectors is far from reaching its peak. Many industries have just begun their digital transformation journey, leaving a vast global cloud service industry space. As an independent company operating Huawei Cloud, on one hand, it leverages its capabilities to internally connect various departments. On the other hand, it will continue to strengthen its presence in the global market from an external perspective. In the future, around Huawei Cloud CEO Zhang Ping'an's strategy of 'everything is a service' is reasonably expected to become an important highlight in Huawei Cloud's subsequent annual financial reports.

From the perspective of product strength, there are more and more enterprises with scientific and technological innovation capabilities. Technological innovation acts as a key driver for an industry, quietly changing the entire sector and potentially even subverting our lives in the future. This also marks the transition from 'Made in China' to 'Intelligently Made in China.' However, can new domestic products rest assured without core technology? How can they enhance their industrial influence after acquiring cutting-edge technologies and invention patents? Are new domestic products that lack core technology 'taking the lead' or 'copycatting'?   4 month 26 Today, Frost & Sullivan Frost & Sullivan, Dr. Wang Xin, Global Partner and President of Greater China at Frost & Sullivan, Founder of the original corporate in-depth research platform LeadLeo Technology Network, and a judge for the Golden Prize for Business Excellence, was invited to participate in the live broadcast room of 'The Golden Prize is Here'. Frost & Sullivan Wang Yuchuan, Chief Advisor for China and Chair of the Golden Prize for Technological Innovation Awards, joined forces with us to discuss the theme of 'Technological Innovation'. Starting from investment, they explored how to construct an innovative ecosystem in China and further integrate with advanced global technologies. Hello Dr. Wang Xin, we have watched one of your presentations where you interpreted the future from an industry perspective. 50 The development trends and opportunities for China's five core industries in the coming year, with consumption being at the forefront. You have presented a set of data: So far, approximately half of the people in China have never used an ordinary flush toilet. 10 Billions of people have never taken a flight. What do these numbers mean? Where do you think the core points lie in unlocking the potential of Chinese consumers and promoting consumption growth? Dr. Wang Xin: These figures indicate that there is still a broad potential consumer demand in China, and the future consumption market in China holds great potential, which is mainly reflected in the following aspects:   （ 1 China has a large consumer base and is 14 A super-large-scale market with hundreds of millions of people.   2021 China's GDP increased by [X]% year-on-year 8.1% The total economic volume reached 114.4 trillion yuan, accounting for more than 18% Chinese consumers have contributed more than 40% Electric vehicle sales 45% Fish and seafood sales 37% fresh meat sales 24% Wine sales.   In all consumer category markets globally, China's average share is close to 20% ;   （ 2 China has broad room for consumption growth.   2021 China's final consumption expenditure as a percentage of GDP GDP specific gravity is 54.5% , while the proportion in developed countries averages over 70% Among them, the United States and the United Kingdom accounted for more than 80% Therefore, China still has significant growth potential; 3 The momentum of consumption upgrading is strong.   2019 per capita in China in GDP It has exceeded 10,000 yuan, and consumption will enter a stage of rapid upgrading. At the same time, the development of urbanization has also given rise to new opportunities. The rural population accounts for about 40% of China's total population, but the proportion of rural consumption is still less than 15% . 2021 The urbanization rate of China's permanent population at the end of the year 64.72% For every one percentage point increase in urbanization rate, the urban population increases by approximately 1,400 Ten thousand people. If this 1,400 If the consumption per person increases by more than 10,000 yuan annually for every 10,000 people, total consumption can increase. 2,000 RMB 100 million or so, for just this one item in the future 10 In 2021, total consumption will increase by about 2 trillion yuan. To unleash the potential of Chinese consumers,   The core points for promoting consumption growth mainly lie in accelerating supply-side structural reforms, fostering the formation of new supply and industrial systems, to build a new development pattern where dual circulations promote each other, unleash the tremendous momentum of new consumption, and turn the potential for consumption growth into reality.   It can be implemented through the following three paths:       （ 1 ) Enhance innovation capabilities and boost new consumer demands.   Centering on consumer innovation trends such as new domestic products and new national trends, we are making significant investments in developing manufacturing. While continuously improving and enriching diverse service and industrial supply, we are further meeting the growing cultural, entertainment, leisure, and other new consumer demands of residents. This aims to expand the coverage of consumption areas in the new era and deepen the consumer base, thereby accelerating the release of tremendous consumer growth potential;       （ 2 ) Enhance technological capabilities and empower new consumption scenarios.   Promote the innovation of science and technology, realize digital empowerment of consumption channels, connect online and offline consumption methods, create new consumption formats, scenarios, and models, further integrate emerging technologies such as the internet, artificial intelligence, big data, and cloud computing with the consumer industry, and stimulate untapped consumption possibilities;   （ 3 ) Improve the urbanization rate and unleash new consumption potential.   Vigorously promote the improvement of a sound modern rural commercial system, perfect the construction of the agricultural product supply chain system, accelerate the pace of e-commerce entering rural areas, enhance the quality and scale of the rural consumer market, further promote the development speed of urbanization, and use a small step of urbanization to facilitate a big leap forward in Chinese consumption. Q You've made a prediction that by 2070 In [year], China will build the world's largest smart city cluster, integrating various industries with artificial intelligence to enhance productivity. In your opinion, which industries are already or will deeply integrate with artificial intelligence at present? Dr. Wang Xin: 2021 The year coincides with the global launch of Frost & Sullivan. 60 On our tenth anniversary, we held a celebration event in China. At the same time, as a token of gratitude to Frost & Sullivan 60 For the anniversary, we have prepared three white papers — "Leading Global Growth 60 Big Technology》, "Global Technology and Application Trends: Prospects and Outlook", and "China's Future 50 Annual Industry Trend Insights White Paper". "By 2070 In [a certain year], China will build the world's largest smart city cluster. This prediction is based on our China's Future 50 As mentioned in the 'White Paper on Industry Trend Insights for 2023'.   Artificial intelligence is an emerging strategic technology that leads the future, a crucial force driving a new round of scientific and technological revolution and industrial transformation, and an engine for the transformation and upgrading of China's economic structure and the shift of growth momentum.    As of 2021 At the end of the year, there were a total of 3322 Home received investment, accounting for the total financing of AI companies 55% , among which is smart finance 575 Home, intelligent robot 427 Home, Smart Transportation (Autonomous Driving) 420 Home ranks among the top three in the application layer.    It can be seen that the financial industry has been most extensively empowered by artificial intelligence technology.    This also reversely maps to the three basic elements of artificial intelligence technology:    Data, computing power, algorithms.    A large amount of high-quality data is the effective foundation for artificial intelligence models, while new algorithm iterations are relatively slower, and computing power improvements are more about breakthroughs at the physical level.   Therefore, whether artificial intelligence technology can be deeply integrated with a particular industry depends most importantly on whether the industry can generate or readily collect massive amounts of high-quality data. Of course, with the development of sensor technology, more industry data will enter algorithm training models in the future, leading to better prediction results. Overall, in addition to the further deepening of existing industry applications, we are also optimistic about the application of artificial intelligence in new drug research and development, basic scientific research, as well as important applications in the metaverse, digital twins, and other areas. Taking the metaverse as an example, the core of the metaverse lies in its ability to reflect and connect everything from the real world into the metaverse, as well as to enable interaction. In this process, artificial intelligence plays the role of connecting the real world with the virtual world. AI With breakthroughs in computing power, reconstructing and mapping the real world into the digital world, domestic SenseTime Technology has done very well in this area. SenseMARS It has become one of the largest metaverse empowerment platforms in Asia and is the first AI company to help mobile applications achieve interactive augmented reality and mixed reality effects. How does 'LeadLeo' achieve this? AI What about the application? Leveraging AI Technology allows us to acquire more knowledge in the shortest time, summarize this knowledge through big data, distill out many related contents, and form structured and standardized databases - what we call: ABCK （ AI-powered Blockchain-based KaaS ) cloud platform. On this basis, we have formed the final analysis data and report through the research and evaluation by professional analysts and a team. This can effectively improve the efficiency of knowledge generation and utilization, enabling analysts to transform from simple data transfer to more advanced research analysis and create greater value. Overall, against the backdrop of new technological and industrial transformations,   The deep integration of artificial intelligence with industries is an inevitable choice to unleash the digital multiplier effect, accelerate the development of strategic emerging industries, and build comprehensive competitive advantages.   Next, artificial intelligence will accelerate its penetration into various industries, promoting cross-border integrated development between emerging industries, between emerging and traditional industries, as well as between technology and society. Q There is a case that we care about particularly: 2018 In [year], Dr. Wang Xin became the world's first robot to obtain citizenship, produced by Hong Kong Hanson Robotics " Sophia " issued " Frost & Sullivan China New Economy Award " We are very interested in this event: " Sophia " What makes this robot special? What aspect of the robotics industry do you see as the most promising at that time? What role does China currently play in the field of robot design and manufacturing, and what unique advantages does it possess? Dr. Wang Xin:   First of all, we are very honored to be at 2018 In 2019, I got in touch with Hanson Robotics and presented to Sophia " Frost & Sullivan China New Economy Award    " .   2018    The year is auspicious    Frost & Sullivan enters the Chinese market 20 In that year, we held Frost & Sullivan 20 anniversary    At the celebration and customer appreciation event, Frost & Sullivan presented awards to many emerging economy companies at the banquet, with Hansen being one of the numerous award-winning enterprises.     As the world's first robot to obtain citizenship, Sophia's most distinctive feature lies in her ability to understand human emotions and form emotional interactions with them. Emotions are considered the highest level of artificial intelligence. Sophia can observe and identify information such as the movements and expressions of people around her through a camera, relying on machine vision, and respond accordingly, thereby mimicking the emotional resonance between humans. In addition, she can use bionic materials to create wrinkles by controlling components such as gears, achieving a facial expression that is highly similar to that of humans. Sophia is actually a microcosm of China's robotics industry. It can be said that China has the best robotics development environment in the world and is one of the leading players in the global robotics industry. In recent years, the demand for robotics in China has been growing rapidly. Taking industrial robots as an example, China is the leading country in the global industrial robotics market. 2013 Since the beginning of this year, it has been continuous 8 In 2021, it became the world's largest industrial robot market.   2021 In [year], China's industry The newly installed capacity of industrial robots exceeded 20 10,000 units, with a cumulative annual output reaching 36.6 10,000 units, with a year-on-year growth rate as high as 44.9% The world's largest robotics market - Asia market accounts for more than 2/3 .     Industrial robots come in a wide variety, characterized by high-risk operations, high production efficiency, strong stability, and high precision. With the introduction of various policies related to industrial robots and key special policies for intelligent robots, their application fields have continued to expand. For example, in the medical field, in recent years, Frost & Sullivan has served many medical robot companies that have successfully entered the capital market. Against the backdrop of an aging population leading to a significant increase in morbidity and surgical volume, China's current medical supply capacity cannot be rapidly and effectively enhanced in the short term. An effective means to solve the imbalance between medical supply and demand is to introduce surgical robots to improve surgical efficiency. Surgical robots can assist doctors in completing surgeries more efficiently and accurately, and they have advantages such as increasing the success rate of surgeries and reducing the area of trauma. "The difficulty and high cost of seeing a doctor" and the poverty caused or exacerbated by illness due to an obvious imbalance in China's medical resources have always been problems plaguing people. Combining virtual reality technology and surgical robot technology to achieve remote surgical treatment has become an effective way to solve this problem. Nowadays, utilizing intelligent sensing, human-computer interaction technology, and 5G Communication technology has gradually made it possible for doctors to perform precise remote surgeries and treatments on patients in distant locations. We know that the biggest difference between humans and machines lies in human perception, while the feedback generated by machine interaction is still not precise enough. In the future, research progress in human-machine interaction systems and intelligent sensing can further enhance the intelligence of surgical robots, which is beneficial for improving the operational precision of doctors during surgeries. In addition, robots have also played an important auxiliary role in remote office work, remote teaching, and remote production. For instance, in some 'dark factories', robots can operate continuously without lighting, saving energy and improving efficiency.    Therefore, I believe that robots will not take away jobs from humans, but rather replace repetitive and mechanical labor.    Once people's time is liberated, they will engage in more meaningful activities with higher added value.   China possesses more talent resources than other countries and regions around the world, and is also close to the world's largest robotics market. It has significant advantages in responding to customer needs and the completeness of its supply chain. China is continuously cultivating a large number of innovative talents for the robotics industry, and is promoting artificial intelligence with 5G We have made significant contributions to the integration and innovation of cutting-edge technologies such as big data, cloud computing, etc.   In the future, China will adhere to the principle of driving overall improvement through local advantages by focusing on key areas, and continue to promote the development of the robotics industry towards higher-end and intelligent technologies.   We will also serve as witnesses to the times, witnessing robots beginning to enter thousands of households. Q 2016 In VR The field has made predictions, “ VR The dawn is just ahead" VR Formal commercial products have been launched for over a decade, but no such " blockbuster " Birth. From your perspective, now is VR , metaverse, etc. " virtual world " Is it a good time? China does VR How can enterprises avoid something like VPL Companies are the same, with excellent creativity but 'born at the wrong time', suffering setbacks in commercialization? Dr. Wang Xin:   I want to achieve it VR The commercial development of devices cannot be achieved without a favorable technological environment and productivity. A mature application environment, an active user base, and a stable and efficient industrial chain all contribute to this. VR The development of the device has arrived at an appropriate timing. Overall, VR The equipment has initially acquired the technical and environmental conditions for use. 5G Networks, sensing technology, optical technology, etc., are VR The basic technology has been implemented, and a mature industrial chain ensures supply and low prices.   Web3.0 Build step by step, an active short-video and gaming industry, a booming metaverse social scene, home office work during the pandemic, VR The application scenarios of devices are gradually becoming richer, and the metaverse concept has received a boost in the capital market.    According to the calculation data in the 'Metaverse White Paper' jointly released by LeadLeo Research Institute and Tianfeng Securities, by 2025 year, China VR The market scale of devices will reach 479.9 RMB 10 billion, with an annual compound growth rate of 60.4%    , VR As an important cornerstone for the realization of the metaverse, devices are expected to become a popular consumer electronics product of the new generation. VR The upstream of the equipment industry chain is divided into 5 major sector 18 A key component of this segment is the chip and optical device. The localization level of the industrial chain is relatively high. 18 Among the sub-items 11 Each item has Chinese enterprises participating in the competition. High-quality domestic supplier companies have strong competitiveness in raw material supply. For example, Lianchuang Electronics, which has been successfully listed, is the world's largest sports camera lens supplier. 2020 The year has become internationally renowned VR The customer mass-produces and supplies projection lenses; Goertek has made long-term arrangements VR/AR Business, currently at the high-end VRAR The market share in the field of OEMs for complete sets of equipment is close to 80% . recent 5 over the years, globally VR The headset device market has shown a relatively rapid pace of market changes.   2017 In the year, the most in the market VR The device is a relatively low-end mobile phone case, all-in-one VR The proportion of devices is only 3.9% . 2018 Annual integration VR The proportion reached 26.2% , with a growth rate as high as 571.8% , and PC end VR Become the new market tyrant. 2019 In 2019, the basic market pattern remained unchanged. PC end VR The proportion is nearly 50% The all-in-one machine market has further expanded.   2020 In [year], with the phenomenon-level VR —— Oculus Quest2 With the launch, all-in-one computers have gradually demonstrated their superiority, with market share growing rapidly. 5 Looking at the data for the year, VR The equipment market is ever-changing, presenting both challenges and opportunities for enterprises. It is essential for companies to accurately capture industry dynamics in order to gain a foothold in market competition. Q Now, the term 'service' has gradually shifted from the traditional meaning of 'service industry' to the user experience brought about by services attached to goods. Teacher Wang Yucan mentioned an interesting phenomenon: Tesla currently provides complete vehicle support OTA The service value of the system and other services is one hundred thousand US dollars, and in the future, it will gradually account for a larger proportion of the vehicle price. This represents that the traditional manufacturing industry of automobiles is also gradually shifting its profit points from materials, manual labor, and technological accumulation to serving users. How do you view the increasing application of generalized services in physical goods? What are some specific cases of this trend? Dr. Wang Xin:   The apparent manifestation of the service-oriented transformation of manufacturing is the increasing application of generalized services in physical goods. The underlying reason is the significant trend towards ubiquitous devices. Ubiquitous computing, originally meaning that networks are everywhere, originated from the advancement of computer technology. Computers have fully integrated into people's lives, providing various services wherever they are. 2020 After a certain year, the connotation of ubiquitous computing continues to expand, referring to the ability for every visible object to be connected to the internet. From small items like light switches to large structures like reservoir dams, they play an increasingly important role under the influence of network connectivity. The service-oriented transformation of manufacturing accelerates, with significant effects from supply-side structural reforms. The industrial structure and product structure have been optimized, and both industrial quality and product quality have improved.   Consumption is gradually becoming a productive force, and the tertiary industry is GDP The contribution rate ranks first among the three major industries, indicating that it is an inevitable trend for manufacturers to increase the proportion of services in physical products. 2021 Year tertiary industry GDP The contribution rate to growth is as high as 53.9% .   As you mentioned OTA It's a typical case of service being applied to physical objects. In fact OTA Services were initially an important means for mobile phone manufacturers to enhance product competitiveness and profitability. Tesla was the first automaker to apply this concept to the automotive sector. OTA The value can not only be enhanced by upgrading to change the response speed of the car's on-board computer, but it can also increase the maximum range of pure electric vehicles to a certain extent and adjust the usage status of the car battery, thereby providing users with a better operational experience. Most importantly, automakers can also OTA Achieve differentiated features and pricing, build their own automotive brand ecosystems, enhance user stickiness, and increase the repurchase rate.   In the future, new energy vehicles will see increasingly smaller differences in range, acceleration, and even body design. Similar to how Apple's mobile phones rely on their app store to establish an unbreakable Apple ecosystem, manufacturers are increasing their efforts towards OTA The investment in system and ecosystem construction aims to enhance service value and build competitive barriers. Service applications in physical assets are not limited to the automotive industry but also occur during the transformation of other traditional manufacturing sectors. Taking Baosteel, a leading enterprise in the steel industry, as an example, Baoxin Software was initially its functional department providing information software services for automated production. With the advancement of automation and informatization in China, the demand from steel manufacturing enterprises has become increasingly strong. Baoxin Software was separated from the Baosteel department and operated independently. While serving within the Baosteel Group, it also provides services to other steel manufacturing enterprises.   Automated and information-based software services continuously create new profit points for them.

Frost & Sullivan's Insights The "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a Unified National Market" released on April 10th once again clarify that it is necessary to improve the multi-level unified electricity market system and study the timely establishment of a national electricity trading center. The electricity market is an important part of building a new type of power system, and an effective price mechanism is at the core of the self-regulation and healthy operation of the electricity market. Is there room for improvement in the current electricity market price mechanism in our country? Due to the inverse distribution of large wind and photovoltaic bases and load centers, more and more new energy is being transported across provinces, which will significantly increase the transmission costs and system stability costs. How should these costs be managed? With the improvement of the electricity market price mechanism, will the full guarantee purchase method by grid companies become unsustainable? Xu Biao, Executive Director for Greater China at Frost & Sullivan (hereinafter referred to as "Frost & Sullivan"), was interviewed by China Energy News to discuss the "breakthrough point" for the construction of a unified electricity market China Energy News Core Reading: The increase in the penetration rate of new energy power generation brings about an increase in grid system costs. On one hand, grid companies have strong cost control capabilities, and some costs can be absorbed through potential tapping by grid companies to better position the pipeline platform for power transmission; on the other hand, according to the principle of "whoever uses it shall bear the cost," scientifically and reasonably approved transmission and distribution prices to promote the transfer of auxiliary service fees to electricity market users.   The "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a Unified National Market" released on April 10th once again clarify that it is necessary to improve the multi-level unified electricity market system and study the timely establishment of a national electricity trading center.   “Since 2021, a number of policies have been introduced to promote electricity market reform, which can be described as unprecedented. Whether from the perspective of building a new type of power system or constructing a unified national electricity market, it is necessary to further improve the price mechanism at the core of the electricity market.” Recently, a relevant person from a power generation enterprise told reporters.   In fact, with the increase in the proportion of new energy power generation, the hidden costs such as grid system regulation costs, reserve costs, and capacity costs will rise significantly. Currently, most of these costs are borne by coal-fired power companies or grid companies, and their rationality has sparked widespread debate. In the industry's view, only by improving the electricity market price mechanism can hidden costs be straightened out and help build a new type of power system.   The electricity market price mechanism still needs to be improved   Xu Biao, Executive Director for Greater China at Frost & Sullivan, believes that in the process of continuously advancing electricity market reform in our country, the improvement and optimization of the price mechanism are core tasks.   Xu Biao said that currently, the power reform still faces issues such as the inability to transmit fuel costs, the impact of the "dual-track system" on resource allocation efficiency, an imperfect market trading mechanism, and immature market entities. There is great room for improvement in the electricity market price mechanism.   For example, the tight power supply situation at the end of 2020 was caused by a significant increase in fuel costs for coal-fired generating units and the absence of a coal-fired cost transmission mechanism. In response, relevant government departments introduced a series of measures to promptly manage and solve the problem. In the view of Mr. Jin, the person in charge of a certain power generation enterprise, on one hand, there are bottlenecks in managing variable costs such as fuel costs, resulting in most coal-fired power plants being unable to calculate their economic accounts; on the other hand, the recovery mechanism for electricity auxiliary service costs is not yet perfect. “If reliable flexible sources like coal-fired power are still evaluated for grid connection based on zero-sum game thinking, it will be unsustainable in the long run.”   The principle of "whoever benefits shall pay" should run through the whole process Due to the inverse distribution of large wind and photovoltaic bases and load centers, more and more new energy is being transported across provinces, which will significantly increase the transmission costs and system stability costs. How should these costs be managed?   Xu Biao believes that the increase in the penetration rate of new energy power generation brings about an increase in grid system costs. On one hand, grid companies have strong cost control capabilities, and some costs can be absorbed through potential tapping by grid companies to better position the pipeline platform for power transmission; on the other hand, according to the principle of "whoever uses it shall bear the cost," scientifically and reasonably approved transmission and distribution prices to promote the transfer of auxiliary service fees to electricity market users. Mr. Jin also said that the management of electricity market prices should fully implement the principle of "whoever benefits shall pay," with users paying a price premium for green electricity and grid and users reasonably sharing auxiliary service costs. “However, it is important to do a good job in supervision, avoiding using grid connection assessment to suppress power generation enterprises and also avoiding hindering the role of microgrids due to cross-subsidies.”   Jia Yu, Deputy Director of the Distribution Center at the China Energy Research Society, believes that the consumption of new energy requires cross-provincial and cross-regional transmission, which will inevitably lead to a significant increase in system costs. Therefore, building a unified national electricity market can achieve the management and balance of electricity prices between the sending end and receiving end, as well as different power sources. Promote the consumption of new energy with the price mechanism In recent years, new energy has seen large-scale development, and some regions have reduced the minimum guaranteed utilization hours on their own to promote the participation of new energy power generation in market transactions.   For a long time, grid companies have been the only buyers of guaranteed new energy purchases, and the guaranteed power generation volume that ensures quantity and price cannot exceed the scale of electricity they represent and guarantee for users. With the improvement of the electricity market price mechanism, will this guaranteed purchase method disappear?   Xu Biao believes that China's priority power generation and purchase plans are formulated and strictly implemented after coordination by the National Development and Reform Commission with provincial (regional, municipal) government authorities, power generation, and grid companies. There is generally no significant mismatch between priority power generation and purchase volumes.   According to the "Notice on Organizing the Agency Purchase Work of Grid Companies" issued by the General Office of the National Development and Reform Commission, the guaranteed power generation volume that ensures quantity and price should not exceed the scale of electricity guaranteed for residential and agricultural users and agency industrial and commercial users purchased by local grid companies. The insufficient part shall be procured by grid companies through market-oriented methods. This move is precisely to encourage more power generation enterprises and industrial and commercial users to directly enter the electricity market. In Mr. Jin's view, whether the guaranteed purchase of new energy is cancelled depends on the development level of the electricity market. “The so-called full guarantee purchase is more aimed at power generation enterprises that do not directly participate in green electricity transactions, while grid companies have no such obligation for those participating in green electricity transactions.”   The industry generally believes that with the further improvement of the electricity price mechanism, the consumption method of new energy will become more market-oriented, consumption channels will become more diversified, and the dependence on guaranteed purchases will also decrease. *This article is reprinted from China Energy News, with reporter Han Yifei. The original article was titled "Our Country Once Again Clarifies the Improvement of the Multi-level Unified Electricity Market System - Improving the Price Mechanism Becomes the 'Breakthrough Point' for the Construction of a Unified Electricity Market."

On April 20th, Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), stated that currently, the CSRC's requirement for disclosing ESG-related information is mainly based on a voluntary principle. Listed companies should actively disclose more ESG information. When the disclosed information is accurate and abundant, it is conducive to investors making an accurate judgment about the company's future development sustainability. Currently, what is the overall status of ESG information disclosure by listed companies in China? From the perspective of advancing the realization of the dual carbon goal, what is the significance of listed companies disclosing ESG information? Should ESG information be mandatory for listed companies? How should the ESG information disclosure system be further improved? Dr. Wang Xin, a global partner and President of Greater China at Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan'), was interviewed by Securities Daily to discuss the current situation of ESG information disclosure by listed companies in China and the future development of the ESG information disclosure system.   On April 20th, Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), stated that currently, the CSRC's requirement for disclosing ESG-related information is mainly based on a voluntary principle. Listed companies should actively disclose more ESG information. When the disclosed information is accurate and abundant, it is conducive to investors making an accurate judgment about the company's future development sustainability. According to the 'White Paper on ESG Development of Listed Companies in China' jointly released by the China Securities Association and CSI Index Co., Ltd., from 2009 to 2021, the number of A-share listed companies disclosing ESG-related reports increased from 371 to 1112, with the initiative of ESG information disclosure rising year by year. The interviewed experts believe that in recent years, regulatory authorities have taken multiple measures, highlighting the achievements of listed companies in ESG information disclosure. However, there are also shortcomings such as inconsistent disclosure standards. Strengthening ESG information disclosure is conducive to improving corporate governance levels, enhancing sustainable development capabilities, and further accelerating the achievement of the dual carbon goals.   Leading enterprises have a strong awareness of ESG disclosure Since the establishment of the basic framework for ESG information disclosure at the end of September 2018, the development of ESG information disclosure has entered a fast track. In recent years, the awareness of ESG information disclosure among leading listed companies on the A-share market has significantly increased. According to the research report data from LeadLeo Research Institute, the disclosure rate of ESG reports by listed companies on the CSI 300 has been increasing year by year over the past decade, rising from 50.7% in 2011 to 83.3% in 2021, far higher than the overall disclosure rate of 25.3% for A-share listed companies. "Advocating ESG is actually about using market mechanisms to address the huge challenges posed by sustainable economic and social development, guiding enterprises to implement corresponding sustainable strategies and plans. At the micro level, while maximizing corporate interests, this will ultimately achieve national industrial and economic goals at the industry and macro levels," said Wang Xin, Global Partner and President of Frost & Sullivan Greater China, to a reporter from Securities Daily. However, there are also some urgent issues that need to be resolved in the development of ESG information disclosure. 'ESG investment is an important part of green finance. Compared with international mainstream information disclosure standards, China has not yet formed a unified ESG disclosure standard system for its overall ESG development. The main problems are reflected in imperfect legal regulations and non-uniform disclosure standards,' said Chen Li, chief economist and director of the research institute at Sichuan Finance Securities, to the Securities Daily reporter. In Wang Xin's view, there are mainly three deficiencies in the domestic ESG information disclosure: the information disclosure system is not unified and its quality varies widely. Third-party audits need to be improved, with a low coverage rate of indicators. ESG assessment ratings lack systematicness. In addition, regarding ESG information disclosure, A-share listed companies mainly disclose voluntarily. Whether mandatory disclosure will become a trend has sparked heated discussions in the market. 'At present, domestic ESG information disclosure mainly follows the principle of voluntariness and has not yet reached the level of synchronizing with international ESG standards or mandatory disclosure,' Chen Li said. Considering that the current domestic ESG information disclosure system is not yet perfect, ESG disclosure should rely more on market forces to encourage enterprises to better comply with sustainable development requirements, thereby enabling society to achieve sustainable development. "Compulsory ESG information disclosure will become an inevitable trend. The severe climate change situation and the increasing frequency of extreme weather events have promoted mandatory disclosure, with overseas ESG information disclosure already being a common mandatory requirement." Wang Xin cited an example, stating that Germany introduced mandatory ESG reporting regulations for large enterprises in 2016, requiring non-compliant companies to provide explanations. In 2021, the U.S. Securities and Exchange Commission (SEC) proposed mandatory disclosure recommendations for key ESG areas. In the Asia-Pacific region, listed companies in Singapore, Japan, Indonesia, and Hong Kong are all required to disclose ESG information compulsorily.   ESG Empowers Corporate Business Value Meanwhile, regulatory authorities continue to urge listed companies to strengthen ESG information disclosure in order to further improve the quality of listed companies and promote the achievement of the dual carbon goals. On April 15, the China Securities Regulatory Commission (CSRC) issued the 'Guidelines for Investor Relations Management of Listed Companies', which state that 'in accordance with the requirements of implementing new development concepts, ESG information on the environment, society, and governance of listed companies should be included in communication content.' Chen Li analyzed that strengthening ESG information disclosure is beneficial in two ways. On one hand, it helps to encourage enterprises to pay more attention to environmental protection and internal governance, assisting in optimizing their own business and development strategies, thereby enhancing medium- and long-term sustainable development capabilities. On the other hand, as ESG standards become an essential reference for investment decisions, ESG empowers corporate commercial value. Listed companies with better performance will receive long-term support from the capital market, thus accelerating their pace towards becoming stronger and more efficient. When discussing the necessity of strengthening ESG information disclosure, Wang Xin believes that firstly, it promotes the transformation of listed companies. Regular ESG information disclosure will facilitate the optimization of energy structures in industries such as petroleum and chemical engineering, drive their efforts towards low-carbon emissions, optimize production processes, improve energy efficiency, and reduce pollutant emissions. Secondly, it enhances the sense of responsibility of listed companies. ESG information disclosure has a two-way promoting effect on enterprises and stakeholders, helping companies establish a stable interest ecosystem, boosting high-quality development, and regular information disclosure can force companies to strengthen their sense of responsibility and mission, thereby indirectly promoting the achievement of the dual carbon goals. Regarding how to further optimize the ESG reporting system, Wang Xin stated that listed companies can provide investors with more effective ESG-related information by increasing the release of quantitative information and improving the quality of disclosed information; establishing ESG databases for more efficient collection and management of ESG information and data; when listed companies in related industries participate in carbon trading or engage in green finance, they need to increase the quantity and quality of information disclosure on carbon emission data in their annual and semi-annual reports. Chen Li suggests that regulatory authorities need to establish and improve the rules and standards for ESG information disclosure by financial institutions, construct an evaluation system for ESG information disclosure, and further strengthen supervision over information disclosure by financial institutions to promote a comprehensive improvement in the quality of information disclosure.   *This article is reprinted from 'Securities Daily', with reporter Xing Meng. The original article was titled 'The initiative of listed companies to disclose ESG information is increasing year by year, and experts believe mandatory disclosure is an inevitable trend'. We would like to thank Lou Lei, Executive Director for Greater China at Frost & Sullivan, and Jiang Yu, Analyst, for their support in this interview.   Frost & Sullivan Insight & Extended Reading Q: What is the overall status of ESG information disclosure by listed companies in China at present? What are the deficiencies? A: Current Situation: 1. The disclosure of ESG information by A-share listed companies has increased, with a stable disclosure rate and significant room for improvement. According to statistics from Shenwan Hongyuan, since 2014, the disclosure rate of ESG reports for A-share companies in China has remained stable at about 25%. The number of disclosures increased from around 615 in 2014 to 1,159 in 2021. According to Wind statistics, in 2021, A-share listed companies in China disclosed a total of 1,159 ESG reports, accounting for 24.74% of the total number of A-share listed companies in 2021 (4,684). Among them, the proportion of ESG disclosures by listed companies on the Shanghai Stock Exchange in 2021 was 33.56%, while that by listed companies on the Shenzhen Stock Exchange was 18.56%. According to Zhitong Finance, as of December 31, 2021, the proportion of H-share listed companies that independently published ESG reports was 52.2%; according to Shangdao Zhongheng, as of July 31, 2021, the proportion of companies that had disclosed ESG information on the Hong Kong Exchanges and Clearing (HKEX News) was 93.8%. 2. The industry distribution of ESG disclosure is uneven. According to Wind statistics, the top five industries in terms of the number of ESG reports released in 2021 are pharmaceuticals, power and public utilities, basic chemicals, power equipment, and new energy and electronics. The number of disclosed reports is 90, 79, 74, 63, and 62 respectively. The high number of disclosures in the pharmaceutical industry is mainly related to the pandemic, while others are mostly concentrated in high-emission industries. In contrast, industries such as finance, food and beverages, and light industry have fewer disclosures. Deficiencies: 1. Third-party audits need improvement, with low metric coverage. According to China's ESG research, as of May 2020, only 12% of the ESG reports released within the CSI 300 had undergone third-party auditing. At the same time, the coverage rate at the indicator level disclosed in these reports is low. In 2020, the disclosure rates for social indicators and environmental indicators were 35.4% and 49.2%, respectively, with most social disclosures being qualitative descriptions. 2. The ESG information disclosure system is not unified, and its quality varies widely. The naming conventions for various enterprises are not unified, such as corporate social responsibility reports, corporate sustainable development reports, corporate impact reports, etc. The disclosure forms are published separately in some cases and integrated into annual or quarterly reports in others. There is no clear ESG information disclosure system or framework. 3. The ESG assessment and rating lacks systematicness. Currently, many foreign institutions are researching and developing ESG indicator systems, such as the MSCI ESG series indices, FTSE4Good series indices, The Dow Jones Sustainability series indices, etc. However, most of the research results in China focus only on individual factors within environmental, social, and corporate governance, lacking a combination with national conditions. At the same time, the indicators and weight settings of various institutions are not the same.   Q: In recent years, regulatory authorities have promoted listed companies to strengthen ESG information disclosure. What is the positive significance of this for improving the quality of listed companies? A: The rise of ESG has profound socio-political reasons. It encourages enterprises to take on more social responsibilities on the premise of minimizing government intervention, and demonstrates that enterprises have complete and adequate response measures in the face of increasingly severe challenges such as climate change, environmental pollution, and wealth disparity. The purpose of the ESG evaluation system is to internalize the 'externalities' caused by enterprises during their pursuit of profit maximization into their costs as much as possible, essentially redefining the boundaries between enterprises and markets. Advocating for ESG is actually about using market mechanisms to solve the huge challenges brought about by the sustainable development of the economy and society, guiding enterprises to implement corresponding sustainable strategies and plans. At the micro level, while maximizing corporate interests, it aims to achieve national industrial and economic goals set at the industry and macro levels. The positive impact of a company's ESG information on the value of listed companies is reflected in reduced systematic risk (such as the relative decline in the β coefficient in the CAPM model) and improved non-systematic risk conditions (such as enhanced profitability). Although the ESG framework emphasizes creating sustainable financial performance to a large extent, it also drives investors and businesses to focus on clear predictive adjustments or scenario analysis. By identifying or quantifying potential financial and non-financial factors, it mitigates various risks in the future.   Q: From the perspective of advancing the realization of the dual carbon goal, should listed companies be required to disclose ESG information compulsorily? A: At present, the China Securities Regulatory Commission (CSRC) requires ESG disclosure on a voluntary basis and has not yet implemented mandatory disclosure. However, mandatory disclosure is an inevitable trend in the future. 1. Overseas ESG disclosure has become a mandatory requirement. Germany introduced mandatory ESG reporting regulations for large enterprises in 2016, requiring non-compliant companies to provide explanations. The US Securities and Exchange Commission (SEC) proposed mandatory disclosure recommendations on key ESG areas in 2021. The UK has stipulated that starting from April 2022, more than 1,300 large companies and financial institutions registered in the country must disclose climate-related financial information, becoming the first G20 group country to mandate large corporations to make climate disclosures according to TCFD. In the Asia-Pacific region, listed companies in Singapore, Japan, Indonesia, and Hong Kong are required to disclose ESG information compulsorily. The Hong Kong Exchanges require listed companies to compulsorily disclose ESG-related reports after July 2020. In 2021, the Hong Kong Exchanges revised the 'Corporate Governance Code' and related 'Listing Rules', focusing on the corporate governance section, which includes aspects such as board independence, diversity, and corporate anti-corruption. 2. The severe climate change situation and the increasing frequency of extreme climate events have promoted mandatory disclosure. According to the conclusions of the IPCC's sixth assessment report, climate warming is caused by human activities, and the global climate system is undergoing rapid and widespread changes, some of which are irreversible. Under all emission scenarios, global temperatures will rise by at least 1.5°C. This forces countries around the world to take global climate change more seriously and mandates companies to conduct ESG climate disclosures.