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2017 is the significant year to implement the 13th Five-year Plan. On such a historic occasion the renowned National People’s Conference (NPC) and National Committee of the Chinese People's Political Consultative Conference (CPPCC) were convened. The issues like how to develop China’s economy and what is the development goal for the coming New Year are high on the agenda.

As a lighting insider, we could foretell the opportunities for LED sector by analyzing the buzzwords of NPC and CPPCC.

1.One- Belt-One-Road Strategy and International Cooperation

On March 5, Premier Li Keqiang of the State Council pointed out in the government's work report that effort would made to Adhere to the common construction of One belt one road initiative, to speed up the land economic corridors and maritime cooperation fulcrum construction, build along the big customs clearance mechanism. Deepen the international production capacity cooperation; promote China's equipment, technology, standards, and services to go out to achieve complementary advantages. Strengthen education, culture, tourism and other areas of exchanges and cooperation.

"Along the way all the way" along the emerging economies and developing countries, to Russia, Southeast Asia, represented by the emerging market is China's LED exports of new blue ocean, China's LED enterprises to enter Central Asia and Eastern Europe, an important gateway to the market. China's LED lighting exports in 2015, "one way" market is about 10 billion US dollars, an increase of 43%, accounting for the proportion of exports of LED lighting products around 38%.

With the implementation of the national strategy along the way, export all the way along the market growth rate will be higher than the national LED lighting products overall level of exports, 2013-2020 annual growth rate of about 58% by 2020 China LED lighting products export all the way To $ 53 billion, accounting for 50% of the country's share.

The two sessions once again referred to the "one way" strategy, "along the way" has risen to the national strategic level, China LED business "going out" ushered in the strategic window and the development of the golden period. In the face of opportunities, industry and enterprises must first practice internal strength, in the construction of foreign trade channels, independent brand management and other aspects of great efforts, started China's LED brand's international reputation.

2. Made in China 2025

The manufacturing industry is the main body of the national economy, the foundation and benefit of the country, and the power of strong nation. “Made in China 2025” is the first 10-year operation guideline of strong manufacturing national strategy of China. Premier Li Keqiang mentioned in the government report that strength the implementation of “Made in China 2025” concept and accelerate the big data, cloud computing and networking applications. Moreover, he also mentioned that China should aim the development of intelligent manufacturing as the main direction, and also promote the construction of national intelligent demonstration area and intelligent manufacturing industry centre. Which will implement the strong industrial base and promoting the high-end of China manufacturing.

Under the impetus of the nation, “made in China” is gradually transforming into “From China Intelligent”. Under this background, as one of the eleven major Chinese emerging industries, the transformation of LED is long and full of resistance. At present, the majority of LED manufacturing enterprises in China still rely on manpower. Equipment, machinery and production line are aging serious, such situation will also exist for a long time.

LED is one of China’s world leading industries. It is most effective way on the next generation of competition and it is the realization of intelligent production. From CIOE 2016, China’s LED industry chain has gradually realized the significance of the role of intelligent production. On the joint efforts of whole industry chain, we expected to achieve “Made in 2025”goal of China LED industry!

3. Smart City

With the continuous development of human society, cities in the future will carry more and more people. At present, China is in the accelerated developing period of urbanization. In some regions the "urban disease" problem is increasingly severe. To solve the urban development problems, and to achieve sustainable urban development, building smart cities has become an irreversible trend of urban development in the whole world.

According to the analysis of investment adviser industry research center, it is expected that in 2017, China's smart city market size will reach 6 trillion yuan, the annual compound growth rate in the next five years (2017-2021) will be about 32.64%, in 2021, the market size will reach 18.7 trillion yuan.

The construction of smart city has brought the LED lighting industry unlimited space of imagination. It is foreseeable that the comprehensive integration of LED lighting intelligent technology and smart city construction will change our lives step by step. The news, "The domestic market of smart city will reach up to trillions yuan." has already drawn the attention of lighting business. Nowadays, lighting companies not only conduct cross-border cooperation with the Internet conglomerate hand in hand, but also seek cooperation with the government to construct smart cities.

Now there are several main problems in the process of construction of smart city: from the application point of view, the application requirements and direction are not clear. From the perspective of solutions, the solutions on constructing a smart city are uneven and with slow response. Besides, the content of construction are monotonous. For big data, the sources of smart city data are monotonous. The range is also narrow. Further more, decision-making and linkage are limited.

However, people, who engage in the lighting industry, will also face a series of opportunities and challenges. The most important are the three major demands: First, the natural disasters caused prejudge of security problems and alarm demand; Second, the demand of timely release about safety and convenience information; Third, the informationization-service demand in the crowded activity area. In addition, there are three major potential dangers: First is the aging of public lighting system, which lead to a large energy consumption; Second is the potential problem of traffic, security and congestion; Third are the damage and aging of municipal electromechanical and civil engineering.

Although the trillion market of smart city aroused "jealous", the problems that lighting business is facing in the development of smart city, such as the long cost time, the various involved technical types, and the uncertainty of macroeconomic environment, industry cycle, and the subject of investment management, etc., make the market full of opportunities and risks. Therefore, the lighting enterprise access not only needs a good plan, but also requires the internal strength.

4 .Cost Down in Real Economy

During the two sessions of NPC and CPPCC, lowering costs of real economy has become a heated topic among members of the national committee of CPPCC. After some discussion, the remarkable result of “three reductions, one lowering and one bolster”, i.e. address overcapacity, reduce inventory, deleverage, lower costs and bolster areas of weakness,has been affirmed.

Margin is the source of life for enterprises. Income - Cost = Margin. When the cost is 10% lower, the margin will double. The enterprise’s managers only need to do two things: driving sales and controlling cost .

Due to the relatively low entry threshold of LED industry, its preliminary stage has witnessed large amount of capital been pouring in, leading to overcapacity and unhealthy price competition in the industry. With the deep implementation of the strategy of cutting overcapacity in China, outdated production capacity is sure to be closed down. How to carry out the national policy has become a problem worth thinking for all professionals in LED industry.

5. PPP

During the two sessions of NPC and CPPCC in 2017, ACFIC(All China Federation of Industry and Commerce) and Jiu San Society have advised to further enhance PPP policies and legislation, promote better participation of private capital in PPP, and to solve the problem of low level of validity of PPP laws and regulations, improve legal contents of PPP and clearly define a settlement mechanism for conflicts and disputes in PPP.

The vice minister of NDRC (National Development and Reform Commission)  Zhang Yong said that according to the statistics, since last year, 1400 projects with publicly-approved social-capital bid winners were invested through PPP model, the total amount of which reaching 2.4 trillion yuan. NDRC would further enhance the support to PPP model. Firstly, we hope that through the cooperation between government and private companies, private companies can enter into more fields. Secondly, there could be clearer judgment of the future. Thirdly,we can strengthen communication and learn management experience from each other.    

While the state is vigorously promoting the cooperation model between government and companies, many companies in the LED field have captured such opportunities. In recent two years, lighting project market is developing rapidly, and some lighting project companies have won big contracts of over hundreds of millions yuan. Among these lighting projects, some adopt the operation model of PPP. Currently, lighting project industry in China has come into an orderly development stage. From the launch of PPP model and smart city proposed by government to active reaction from enterprises, construction of city night landscape lighting  keeps developing, and more professionals in the industry are confident of the development prospect and future development model of lighting projects .

PPP projects have large sizes that are often calculated in the unit of hundreds of millions yuan. Although the size of PPP projects in lighting industry are relatively small, considered as small ones among large scale projects, the requirement to adopt PPP model for the company is still very strict in terms of enterprise scale, financing strength and service capability. Once the company succeeds in starting PPP projects, in return this will drive the development of the enterprise and the promotion of the company brand.

In the past two years, LED industry is in the process of constant consolidation, mergers and acquisitions, as well as starting the cross-industry integration, which lays exactly the foundation for the implementation of PPP projects. It is believed that enterprises that have stood the trial of merger and acquisition, if capable to win PPP projects and implement them will become leaders of LED industry in the future.