The State Council implements the plan for industrial rejuvenation and firmly controls the production capacity of steel and electrolytic aluminum.

At the beginning of the Year of the Tiger, the State Council held an executive meeting to study and deploy and further implement the plans for the adjustment and revitalization of key industries, so as to make arrangements for the transformation of the economic development mode and structural adjustment in the new year. The Securities Times reporter interviewed the industry experts at the first time, asked them to interpret the spirit of the meeting, and elaborated on issues such as the opportunities that investors are concerned about for the related industries.

On February 25, the Central Political Bureau of the CPC Central Committee held a meeting on Monday (22th) to fine-tune government work reports, stating that this year should continue to maintain the continuity and stability of the policy, and constantly improve the pertinence and flexibility of the policy in accordance with the new situation and new situation. Sex, accelerating the adjustment of economic structure and transforming the mode of economic development, Premier Wen Jiabao of the State Council presided over yesterday's executive meeting of the State Council, researching and deploying and further implementing the adjustment and revitalization plans for key industries, and fulfilling the spirit of the meeting of the Politburo of the Central Committee.

The executive meeting of the State Council pointed out that it is necessary to compress and channel excess capacity, speed up the elimination of backward production capacity, guide the healthy development of the industry, and start the construction of low-carbon technology demonstration projects in the petrochemical industry. Experts said that the adjustment and revitalization plan of the ten major industries introduced last year has played an important role in maintaining a steady and rapid development of the national economy. However, some problems have also emerged in the implementation process. For example, the development of the industry is still facing a severe situation. It is difficult to implement goals and tasks. Therefore, it is necessary to scrutinize the revitalization plans for the top ten industries in terms of policies and measures and further improve them.

Suppression of excess production capacity

The meeting proposed to compress and ease excess capacity, accelerate the elimination of backward production capacity, and guide the healthy development of the industry. Resolutely control the total production capacity of steel, cement, electrolytic aluminum, coke, calcium carbide and other industries. Strengthen the constraints of safety, environmental protection, energy consumption, quality, and other indicators, and increase the cost of energy, resources, environment, and land for enterprises and projects with backward production capacity. In addition, we must focus on promoting corporate mergers and reorganizations to increase industrial concentration and corporate competitiveness. Suppression of excess production capacity and increase of industrial concentration are commonly mentioned in the ten major industrial rejuvenation plans. However, one year after the implementation, the results were not satisfactory. On the one hand, due to local interests, most industries failed to form cross-regional effective mergers and reorganizations; in addition, excess capacity has not been compressed but has expanded.

For example, in 2009, Hebei Iron and Steel, Baosteel, Wuhan Iron and Steel, Saddleburn, and Shagang produced a total of 165 million tons of steel, which accounted for only 29% of the country's total output over the same period. This was in line with the “previous domestic rankings proposed by the Steel Industry Adjustment and Revitalization Plan”. The target gap between the five steel companies' production capacity accounts for more than 45% of the country's total is still far. At the same time, the production of crude steel for SMEs of non-steel members grew rapidly. In 2009, the steel output increased by 24.73%, while the steel association members only increased by 11.27%.

Experts said that increasing industrial concentration is the trend of industrial development. At present, the low demand in the international market is a good time to adjust the domestic industrial structure. It can be expected that the government will further increase its efforts to curb excess capacity and eliminate backward production capacity this year. In addition, mergers and acquisitions between companies are also worth the wait.

It is understood that the Ministry of Industry and Information Technology has submitted relevant proposals for the promotion of mergers and reorganizations to the State Council and is expected to be approved in the near future. This opinion has made some breakthroughs in balancing local interests and is expected to pave the way for cross-regional restructuring.

Petrochemical industry into a low-carbon economy practitioner

The meeting pointed out that it is necessary to establish a carbon emission assessment index system for the steel industry and an energy conservation management system for automotive products, and to start the construction of low carbon technology demonstration projects in the petrochemical industry.

Experts said that in the context of global warming, low-carbon economy has attracted more and more countries' attention. At present, governments of all countries have also reached an agreement that the implementation of a low-carbon economy is considered to be one of the effective ways to avoid catastrophic changes in the climate and maintain sustainable human development. For this reason, the Chinese government has also proposed that by 2020, the carbon dioxide emissions per unit of GDP will fall by 40%-45% compared with 2005.

As an important industry of the national economy, the petroleum and chemical industries have a pivotal position in China's accomplishment of energy-saving and emission reduction targets, and also have considerable potential. Of the 1,000 key energy-consuming enterprises announced by the National Development and Reform Commission, 340 are petroleum and chemical companies, accounting for 1/3 of the total.

Experts said that the advent of a low-carbon economy is a challenge and an opportunity for the petrochemical industry. At present, global carbon emissions are 28 billion tons/year, and the recycling of various carbon dioxide resources is about 250 million tons, which is less than 1% of the emissions. Therefore, carbon dioxide capture and storage technology is particularly important, and the recovery of carbon dioxide is not limited to physical methods. Both chemical and chemical methods are inseparable from the technical support of the petrochemical industry. Therefore, the low-carbon economy in the petroleum and chemical industries must have great potential.

Promote the transfer of some industries to the Midwest

The meeting pointed out that it is necessary to optimize the industrial layout, tighten market access, strengthen investment management, and do a good job of orderly transfer. Build advanced manufacturing bases and modern industrial clusters. Promote the transfer of electronic information, light industry, textile and other industries to the central and western regions.

Experts said that promoting the rapid transfer of electronic information, light industry, textile and other industries to the central and western regions reflects the country’s strategic intentions, that is, proceeding from the overall situation of national economy and social development, taking into account local comparative advantages, and promoting coordinated regional development.

It is understood that the government has already taken measures in this respect, such as the introduction of the industrial transfer demonstration zone plan for the Anhui Riverside City Belt, which was introduced recently. Experts said that the implementation of the above-mentioned strategy has already promoted an important change in the country’s growth pattern and changed the pattern of long-term growth in the East over the Midwest.