All strength to China's industrial sector
BEIJING - China has mapped out a plan for the overall development of the industrial sector in the next five years, the State Economic and Trade Commission (SETC) says.
Bai Rongchun, director of the SETC's industry planning department, said at a press conference last week the plan, based on China's 10th Five-Year Plan for Social and Economic Development (2001-05), is aimed at promoting the restructuring and upgrading of the industrial sector. It is also a component of China's overall plan for development in the five-year period. The overall plan also includes an outline for social and economic development and special plans for major issues that are crucial to the national economy.
The five-year plan covers 13 industries, namely machinery, motor vehicles, metallurgy, non-ferrous metals, oil, petrochemicals, chemicals, pharmaceuticals, coal, building materials, light industry, textiles, and power.
"The plan is instructive, rather than compulsory," said Bai, adding that the leading role of the government is on macro-control and coordination, while enterprises comprise the bulk of the restructuring.
Earlier this year, China axed nine state administrations under the SETC to streamline the government, and announced that the administrative functions of the administrations would be transferred to the SETC. "The announcement of the plan is crucial to SETC's transfer of administrative functions," said Bai, who added that the commission is striving to change from a government organization mainly focusing on releasing files and granting approvals to one guiding enterprises with state policies.
The plan highlights the development of equipment manufacturing, the improvement of energy resources and raw materials, and the provision of consumer goods that will improve people's living standards.
China's industries will continue to rely on coal as their major source of energy, with the government making efforts to increase the efficiency of this traditional industry, by forming large enterprise groups, introducing advanced technology, producing environment-friendly products, and promoting exports.
During the next five years, China's coal demands are expected to increase by 20 million tons annually, while the government plans a 7 percent yearly economic growth in the same period. Currently, only 35 percent of coal is washed, but the proportion is expected to rise to 50 percent or more. China will also increase its coal exports to 80 million tons.
The SETC's five-year plan for the development of the chemical industry predicts the sector will keep an average annual growth rate of 7 percent during the period, on par with the national GDP growth rate.
Facing an impending entry into the World Trade Organization (WTO), the industry is to step up efforts to tackle such bottlenecks as outdated equipment and technique, small and scattered production pattern, inadequate funding and insufficient self-development capacity.
The development of chemical products for agricultural use, including nitrogenous fertilizer, phosphoric fertilizer and potassium fertilizer, will be given top priority, while development of effective and low-toxin chemicals will be stressed, according to the plan.
China will encourage foreign participation, in forms of establishing joint ventures or opening wholly-foreign owned firms in China, to develop the country's chemical industry with advanced technologies.
For the development of the building materials industry, the SETC make the following proposals:
1. Readjustment of product mix To bring the output of new dry-process cement to 120-130 million tons by 2005 or 20 percent of the total, boost the proportion of special-purpose cement to 3 percent of the total; and that of bulk cement, to 30 percent. To bring the output of float glass to 160 million weight crates, or more than 80 percent of the total, of which 50-60 million weight cases will be high-quality products, more than 30 percent of the total, and boost the deep-processed products to over 30 percent of the total. To produce walling materials amounting to more than 300 billion pieces of standard bricks, accounting for 40 percent of the total. To increase the output of pool-kiln drawn glass fiber to 230,000 tons, or 60 percent of the total and the proportion of machine shaped glass fiber reinforced plastic to over 40 percent.
2. Readjustment of technology structure To bring the technology and equipment of new dry-process clinker with a daily output of 2,000-5,000 tons up to the advanced world level of the 1990s. To develop large cement production line with a daily output of more than 8,000 tons and establish R&D systems. To strive for a major breakthrough in the quality floating glass production technology and management by raising in an all-round way the technical level of Luoyang floating process and bring the physical mass of products up to advanced world levels. To bring the technical equipment for glass processing and product quality up to advanced world levels.
3. Readjustment of organizational structure To increase the average annual production capacity of cement enterprises from the present 100,000 tons to 250,000 tons by 2005, and the production concentration of the top ten enterprises from the current 5 percent to 17 percent. To bring the average annual production capacity of glass works up to more than three million weight crates, and the production concentration of the top ten glass works up to 50 percent. To bring the production concentration of the top four glass fiber enterprises up to more than 60 percent.
Priorities in development
1. New dry-process cement Priority will be given to eight to ten large corporations and enterprise groups in starting up new dry-process cement production lines with a daily output of more than 4,000 tons, and in developing technology and equipment with a daily output of 8,000-9,000 tons. Large and medium-sized cement enterprises in East China, South China and along the Yangtze River are required to speed up readjustment of cement industrial structure, with the distribution of cement works better meeting the requirements of the situation after China's access to the WTO and the great Western China Development Drive.
2. New building materials.
3. Upgrading of Luoyang floating glass process.
4. Industrialization of non-organic and non-metallic new materials.
5. Deep processing and export of non-metallic mineral products.
6. Optimization of the mix of sanitary ceramics products.
Policies and measures
1. To retain new dry-process cement, new wall materials, and non-organic and non-metallic materials in the state technical transformation catalogue for continued priority support.
2. To effectuate protective exploitation of non-metallic mineral resources of strategic value and maintain state control over large high-quality mineral mines, and mineral resources with strong competitive edge on world market and resources of strategic importance.
3. To assist advantage key enterprises in accessing the capital market to effectively ease fund shortages.
4. To encourage comprehensive utilization of resources, granting tax reduction or exemption to enterprises using industrial residues, tailings, liquid waste and urban refuse as raw materials or fuel.
5. To timely update standards for products, energy consumption and pollutant discharge to restrict the development of energy-gobbling and heavily polluting products and products with a low utilization of resources, and step up the elimination of backward production technologies.
6. To provide seller's credit to enterprises exporting complete sets of large equipment.
The following are highlights of the SETC's five-year plan for the development of petrochemical industry:
Market demand The annual consumption of petrol and diesel will rise 4.3-4.6 percent and the total demand for petrol, kerosene and diesel oil will reach 136-138 million tons by 2005. The demand of ethylene equivalent will grow at an average annual rate of 8.5 percent to reach 15 million tons by 2005. The five major synthetic resins will grow 7-8 percent annually, and the demand for synthetic resin will reach 25-27 million tons by 2005. The synthetic rubber consumption will slow down, with an average annual growth at about 4 percent to reach 1.1 million tons by 2005. Raw materials for synthetic fiber will grow 5.4-8.3 percent annually, with the market demand to reach 10.813 trillion tons by 2005.
Main objectives To turn China National Petroleum Corp (CNPC), China Petrochemical Group (Sinopec), and China National Offshore Oil Corp (CNOOC) into large enterprise groups with their own name brand products and their own intellectual property rights. To shut or restructure loss-making and low-efficient small and medium-sized enterprises, making them develop toward specialization, with top-end, unique and new products that better match the production of large groups. To raise concentration of production and make industrial distribution more rational. To diversify investors, accelerate the use of overseas capital, strengthen capital operation, improve assets structure, and raise the quality of assets and investment returns; to allow enterprises that have suffered long-term deficits or have become insolvent, without any hope of turning the table, to go bankrupt. To make unified arrangements for the utilization of both the domestic and international markets and resources to realize diversification and multiple channels of import resources so as to ensure the security, stability and economy of crude oil import. To form comprehensive competitive advantages in product mix and raise the technical contents, meeting domestic demand not only in quantity but also in variety and quality. Expanding the market shares of synthetic resin, synthetic rubber, synthetic fiber, raw materials and main primary organic raw materials. Raising the proportion of special-purpose materials for making synthetic resins. To bring the overall oil refining capacity to 270 million tons, including over 75 million tons of sulfur crude. Also to build 8-9 oil refining bases each with a refining capacity of 10 million tons. To bring the ethylene production capacity to nine million tons, complete the Shanghai and Yangtze ethylene production bases and satisfy 60 percent of the domestic market demand for ethylene. To raise the proportion of synthetic resins in the three major synthetic materials to 65 percent, the proportion of special materials for synthetic resins production to over 40 percent, and the ratio of butadiene styrene rubber and polybutadiene rubber to 1.4:1.
Oil refining To adjust installations, optimize crude varieties, increase the output of diesel and naphtha, expand gasoline export, raise the output of fuel oil, provide more quality raw materials for ethylene production. And also to produce more high grade road asphalt, quality lubricants and paraffin.
Ethylene To optimize raw materials, raise concentration of production, and carry out technical transformation of existing ethylene projects to improve varieties, quality and returns of ethylene products. To accelerate the speed of the construction of joint venture ethylene projects so as to raise ethylene production capacity and market shares of downstream products. To complete CNOOC/Shell, Yangzi BASF and Shanghai BP/AMOCO joint venture ethylene projects and the Lanzhou ethylene project and to proceed with preliminary work for other large joint venture ethylene projects.
Synthetic resin To give priority to the production and technology improvement of PE, PPP and PVC, especially polystyrene and ABS, so as to increase their market shares and proportion in synthetic resins.
Synthetic rubber To raise the proportion of butadiene styrene and polybutadiene to increase variety, improve quality, reduce production cost and open up market.
Synthetic raw materials and polymers To accelerate the development of ethylene alcohol and refined terephthalic acid, transform the existing caprolactam installations. And also to build large acrylon installations and raise the concentrate polyester production.
Organic raw materials To construct a number of large and high-level basic organic raw material projects.
(Asia Times Online/Asia Pulse)