GuShiio.com 
Gushiio.com Gushiio AI Big Model Summary
The article analyzes the trend of industry expansion and contraction in the “Fifth Economic Census” report to help identify opportunities and risks. For contracting industries, different response strategies need to be adopted according to technological substitution, economic cycle or policy changes. The expansion industries include “in-system” fields (education, health), information services (B-end software), general equipment manufacturing and real estate property services, but some of them have hidden concerns, such as education and health in the future may intensify competition due to population decline and medical insurance pressure, while the decoration industry is “surface expansion”. At the same time, be wary of over-expansion industries such as wholesale and retail, entertainment, accommodation and catering, whose low thresholds are prone to involution. Regional employment trends show that the east is attractive and the population in the northeast continues to flow out. Finally, the article provides a three-dimensional method to evaluate the prospects of the industry: the degree of technological substitution, revenue growth and policy support, emphasizing a rational view of expansion and avoiding blind optimism.
The following is the main text
In the last class, we talked about the five shrinking industries shown in the “Fifth Economic Census” report, and also talked about how to identify the causes of the recession in such industries first, and then “prescribe the right medicine” to make the right decision: if the industry shrinks due to technological substitution, we should leave as soon as possible; if it is due to the economic cycle, especially the short cycle, we should choose to open up the “second growth curve” and survive the cycle; if it is caused by policy changes, we should discover and adjust our expectations in time.
In this class, we will continue to interpret the “Fifth Economic Census” report and talk about the five expanding industries to help you find opportunities. See which sub-industries have new opportunities? Which industries are expanding, but the competition is particularly fierce, and you need to be more cautious when entering the market? And which industries are just “surface expansion” and the long-term development prospects are still not optimistic? I believe that after listening to this lecture, you will have a clearer answer to these questions.
At the same time, I also hope that through the content of this lecture, I can answer a core question for you, that is, how to correctly view the expansion of the industry? An important principle is that in the face of an expanding industry, you must not be blindly optimistic. You must first judge the specific degree of expansion and distinguish whether it is “expansion” or “overheating”. If it is moderate expansion, it means opportunity, but if it is overexpansion, it is often a trap.
Four major industries with new opportunities
Okay, let’s get started. Let’s talk about the four major industries with new opportunities, namely “in-system” industries, information services, general equipment manufacturing, etc., as well as property services in the real estate field. These industry opportunities are relatively subdivided, so let’s talk about them one by one.
Let’s talk about the first one first. The “in-system” industry is growing rapidly, and the education and health fields are expanding significantly. Note that the “in-system” I am talking about here does not include central state-owned enterprises. It is mainly distributed in 6 fields: scientific research, water conservancy and environment, education, health, culture and sports, and public management, which add up to nearly 70 million people. In the past five years, these fields have added more than 8 million people. Among them, the largest number of new people are in the fields of education and health, with an increase of more than 20%. Of course, there is an exception here, which is the field of scientific research, which has shrunk. I will talk about it separately later.
These data show two things: on the one hand, the “in-system” industry is indeed expanding without a doubt, and it is still the first choice for a considerable number of high-quality talents.
On the other hand, education and health have become the largest areas of expansion in the system in the past few years, but the current two trends will become a hidden worry. First, there are fewer and fewer children, and the education department will inevitably become a reduced department in the future; second, because the medical insurance fund is not enough to cover its expenses, for example, Beijing has a current deficit in the resident medical insurance fund in 2024, that is, it spends more than it collects in 2024, as well as medical insurance reform and other issues. Now many public hospitals are in a difficult situation, and even some private tertiary hospitals can no longer operate, which will definitely affect employment. So I judge that in the future, the personnel in the two institutional fields of education and health may become more entangled or even backfire because of the expansion in recent years. I will talk about this topic in detail in the future. Therefore, if you want to choose these two fields, you need to be mentally prepared in advance.
“Scientific research” is the only field that has shrunk significantly, with nearly 300,000 fewer people. Of course, this does not mean that all scientists have changed their careers, but that more and more scientific research institutions have begun to transform from institutions to enterprises. For scientific researchers, this is a mixed blessing. The good news is that if you are a capable scientific researcher, your salary may be higher in the future, and you may even start your own company; the bad news is that the survival of the fittest in the field of scientific research will intensify.
The second industry that continues to expand is the information service industry, but the differences between specific sub-industries are obvious. Simply put, the software industry facing the B-end has added 4.31 million new jobs; in contrast, the Internet facing the C-end has only added 980,000 people. The reason behind this is closely related to policy trends. Starting in 2020, the country has strengthened supervision of platform-based enterprises on the one hand, and supported the development of the software industry on the other. At the same time, the State Council issued relevant documents, clearly proposing to “promote the software industry to become bigger and stronger, and enhance the innovation and supply capabilities of key software and hardware technologies.”
On the one hand, supervision is strengthened, and on the other hand, it is bigger and stronger, and the huge difference between the two industries has arisen. In contrast, the telecommunications and radio and television industries have lost 170,000 people, which means that traditional radio and television are declining under the background of technological replacement. As far as I know, many local TV stations can no longer pay salaries.
The third largest expansion industry, including general equipment manufacturing, special equipment manufacturing and mechanical equipment manufacturing, has added almost 4 million people in total. These industries are in a rising period. According to statistics, the revenue of industries such as machinery manufacturing and electronic equipment manufacturing has increased by 67% and 38% respectively. The result is naturally to recruit more people and expand production.
Returning to the policy level, the breakthroughs in key areas proposed by “Made in China 2025” include general and special equipment fields such as high-end CNC machine tools, robots, and power equipment. In the “National Strategic Emerging Industry Development Plan”, high-end equipment manufacturing is one of the nine strategic emerging industries. These are industries invested by the state with real money and silver. They are sunrise industries and naturally the focus of expansion.
The fourth one to talk about is the real estate sector. Although it is in overall decline, there are also sub-sectors that are rejuvenated. Here I will talk about two, such as the decoration industry. The report shows that in the past five years, the decoration industry has added nearly 3 million people, and the number of people selling decoration materials has also increased by 2.25 million, which is more than 5 million people. However, I would like to remind you to pay attention to the hidden crisis. From the perspective of the industry cycle, the decoration industry is “half a beat slower” than the construction industry, because the decoration will not start until the house is delivered. Therefore, the expansion of the decoration industry may not be really good, but just a performance of half a beat slower. At present, in 2024, even Dongyi Risheng, the “first home decoration stock”, is deeply in debt crisis, and it is still necessary to be cautious when entering the market.
For example, property services are also expanding, with an additional 2.17 million people, and the sustainability of this field is stronger. Because decoration is a “low-frequency consumption”, but property services are “high-frequency consumption”. Driven by the urban renewal policy, the renovation of old communities and the construction of smart communities are accelerating, and property services must also move towards quality, which will be an opportunity. Therefore, my basic judgment on real estate is that the industry will definitely not disappear in the future, but the industry’s incremental growth will shift from “building and selling houses” to “real estate services”, including high-quality property services.
Traps in the expansion industry: Which industries are “overheating”?
We have said before that no matter what industry, moderate expansion is an opportunity, but overexpansion may be a trap. Therefore, after talking about the four industries with opportunities, let’s talk about the fifth category, which may be a trap, including wholesale and retail, commercial services, entertainment, accommodation and catering. These industries are becoming extremely crowded due to expansion.
Among them, the wholesale and retail industry increased by 30.98 million people; and the number of people engaged in commercial services increased by nearly 15 million, an increase of more than 70%; at the same time, the entertainment industry added nearly 4 million people, an increase of 89% year-on-year. Why are there so many new additions at once? It may be related to the low threshold. For example, in wholesale and retail, the number of employees corresponding to each legal entity is only 5, and they are basically limited-scale mom-and-pop stores.
As for accommodation and catering, the internal volume is even more serious. The overall number of new employees in the accommodation and catering industry increased by 4.93 million, among which the most competitive is the homestay industry. In just five years, the number of homestay companies increased by 3.2 times, and the number of employees increased by 2.4 times. As a result, the tourism industry is still prosperous, but homestay companies are not doing well. According to the data, from the May Day holiday to the National Day holiday in 2024, the average price of homestays dropped from 499 yuan to 376 yuan, and the industry’s profits fell rapidly. Another rapidly expanding new industry, camping services, has seen an increase of 19 times and 7 times in enterprises and employees, respectively, and is now in the same awkward situation. The reverse side of rapid expansion is brutal competition and market clearance.
The five major expanding industries mentioned above, and industry changes will not only affect the market structure, but also profoundly affect the employment structure in various places. Therefore, after discussing industry trends, we will immediately look at employment trends in different regions.
From the perspective of regional distribution, the east still maintains a strong employment attraction. Data show that the east has added 8.12 million jobs, and Guangdong Province alone has added 6.75 million jobs, nearly 1 million more than the entire central region. The employed population in Northeast China continues to flow out, with an overall decrease of almost 3.4 million, of which Jilin has the most serious loss. The direction of the employed population largely reflects the quality of the employment environment. You should know where to go.
Well, up to here, we have basically analyzed the content of the report and the reasons behind it. In short, after saying so much, I hope you can pay attention to two points:
First, be careful of those “surface expansions” that lag behind the economic cycle, such as the decoration industry, etc. These industries will eventually enter a downward period, it’s just a matter of time.
Second, be wary of industries that are overly “bubbly”, especially industries where the scale of employment has expanded multiple times. Because rapid expansion in a short period of time will definitely lead to industry involution, and the result is elimination, with great uncertainty, such as the entertainment industry, accommodation and catering, etc.
How to evaluate the prospects of your industry?
Hearing this, some students may ask, Mr. Ma, I have listened for so long, and my industry has not been mentioned. How should I evaluate my industry? Here I give you a simple evaluation form, which contains 3 questions. You can score your industry according to the following questions.
The first question: Is your industry undergoing technological substitution?
Not started yet, get 1 point;
Just started, 0 points;
Has appeared on a large scale, deduct 1 point.
Regarding technological substitution, my advice is not to try to fight against it, and don’t think about surviving it. Maybe leaving is a good choice. Because the trend of technological substitution is difficult to reverse, even if you survive, there is a high probability that nothing good will happen.
The second question: Is your industry in a period of rapid expansion?
10% revenue growth, 1 point;
10% revenue contraction, 1 point deduction;
The rest, 0 points.
The overall operating income of the industry is a relatively certain observation perspective. Of course, there are many such perspectives, which we will mention later. The industry in a downward period is not completely without opportunities. The short-term downward trend may improve in the future. The key lies in the length of this cycle.
The third question: Is your industry a key industry supported by national policies?
1 point for those with policy support;
0 points for those without;
1 point for those who have a clear order to start rectification.
National policies can reshape an industry in a very short period of time, which may be good or bad. Therefore, my suggestion for national policies is that you must always pay attention to the dynamics of policies, and have a logical position, and it is best to understand the country’s next move in advance.
Finally, please add up the scores. If it is positive, it means that the industry prospects are not bad; of course, the higher the score, the greater the certainty. You are also welcome to share your scores in the message area. This evaluation form may not be the most accurate. Compared with predicting the future, I would like to provide you with a solution idea, which is to constantly dismantle the big proposition of life. “Is the work good?” is a big proposition, and it is difficult to have an idea at once. Then we will dismantle it into 3 small problems, and if the 3 are not good, we will dismantle it into more small problems until the problem is small enough for us to solve. You see, in this way, the idea is not opened up?
