GMT+8( BJT)

Beijing issues latest industrial restructuring guidelines

After a six-year hiatus, China’s National Development and Reform Committee (NDRC), the country’s top economic planning body, has released its latest industrial restructuring guidelines, effective on January 1 2020, to direct the development of all the key 48 economic sectors including new energy, coal, steel, nonferrous metals and mining.

The version, posted on the Committee’s website on November 6, is the fourth since the very first in 2005, which was followed by the second in 2011, and the third in 2013. Yet over the past few years, both the country’s economy and industries have experienced stages of evolution, transitioning from quantitative to qualitative development, with the result that the guidelines set in 2013 can no longer serve today’s needs, NDRC explained when releasing the 132-page new edition.

The 2019 edition comprises 1,477 items, with 821 included in the category “promotion”, 215 under “restriction”, and 441 under “abolition”, and applied to no fewer than 48 industries. Some mining practices have been grouped under “abolition” for the first time, according to NDRC.

“China’s central government has been working on these items diligently, and all the items indicate the government’s resolve to achieve the industrial evolution and its growing consciousness of environmental protection,” a Beijing-based steel analyst commented.

Compared with the 2013 version, 69 items have been added, with 60 more put under “promotion”, eight fewer under “restriction”, and 17 more under “abolition”, and altogether 822 items have been revised to cater to the changes in the industrial sectors, the Commission added, with the revision taking a whole year to complete.

Besides, the 2019 edition has raised the bars for “restriction” and “abolition” and provides more detailed requirements in these two aspects to facilitate actual execution of its recommendations.

The guidance is of great importance to all the related industries, as all drafting and implementation of policies relating to financing, taxation, land leases and imports/exports for them are under the detailed guidelines, and enterprises with production or facilities that fall in the categories of “restriction” or “abolition” will not be granted as much support as those listed under “promotion”, the committee explained.

The latest revisions have highlighted the cruciality of high-quality development in the manufacturing sector, the necessity of nurturing and exploiting domestic needs in the aspects of infrastructure construction in rural areas, and encouraging retail consumption in areas such motor vehicles, electrical home appliances and electronics products, NDRC added.

Some details about the ferrous sector:

The latest edition is full of details regarding the facility size and production technology to minimize misunderstanding in the implementation of its directives, Mysteel Global noted.

Taking steel as an example, the facilities in the “restriction” category include sintering plants below 180 sq m, blast furnaces between 400-1,200 cu m or those above 1,200 cu m but which fail to meet eco-friendly and energy consumption standards, and converters at 30-100 t or those at or above 100 t but which similarly fall short in terms of environmental friendliness or energy saving.

The NDRC highlights steel products and small-sized mills that it wants to phase out. Hot-rolled strips below 1,450mm width, hot-dipped galvanizing lines of 300,000 tonnes/year capacity and below, and color coating lines at and below 200,000 t/y should be restricted.

As for graphite electrodes, investments in plants making electrodes below 600 mm and whose production capacity is under 20,000 t/y should be discouraged too, according to the document.

As for coke-making plants, those with capacities below 1 million t/y or 600,000 t/y for foundry coke should be restricted, and those that have yet to install dry-quenching technology should be eliminated.

As for mining, underground mines using timber for support or employing only horizontal supports, and those mines where electric cables, ventilation holes, and transfer belts are not fire-proof, should be abolished by the end of 2020.

The link to NDRC's complete documentation in Chinese:

http://www.gov.cn/xinwen/2019-11/06/5449193/files/26c9d25f713f4ed5b8dc51ae40ef37af.pdf

Written by Hongmei Li, li.hongmei@mysteel.com,Sean Xie, xiepy@mysteel.com, and Zhiyao Li, lizy@mysteel.com