Major Measures to Promote the Adjustment of Industrial Structure
The State Council promulgated the Decision of the State Council on Implementing the Interim Regulation on Promoting the Adjustment of Industrial Structure on December 7, 2005. On the same day, approved by the State Council, the National Development and Reform Commission (NDRC) issued the Guiding Catalogue for the Adjustment of Industrial Structure as a supplementary document to the Interim Regulation. On December 21, 2005, Mr. Liu Zhi, Director General, Department of Industrial Policy of the NDRC attended the press conference held by the State Council's Information Office and took questions from media.
During the period of the Tenth Five-Year Plan, the Chinese economy maintained rapid growth and the optimization and upgrading of industrial structure were accelerated. Nevertheless, unsound economic structure still remains a pronounced problem, and it has become an important factor that impedes the sustained, rapid, balanced and sound development of the economy. As clearly stated at the Fifth Plenary Session of the Sixteenth CPC Central Committee, accelerating strategic economic restructuring should be made a major line of work, with a view to achieving rapid development along with structural adjustment. When implementing the adjustment of industrial structure, the government should make a full play of the fundamental role of the market in resource allocation. At the same time, the government should provide guidance through economic, legal and necessary administrative measures. Relevant ministries under the State Council once promulgated and implemented a catalogue in industrial categories, i.e. the encouraged, restricted and the to-be-eliminated categories, but many contents are not in line with the current need of optimizing and upgrading industrial structure as well as macroeconomic control. A systematic and comprehensive guiding document is needed to guide the adjustment of industrial structure. Therefore, the government promulgated the Interim Regulation on Promoting the Adjustment of Industrial Structure and the Guiding Catalogue for the Adjustment of Industrial Structure. This is not only an important measure to carry out the essence of the Fifth Plenary Session of the Sixteenth CPC Central Committee and achieve the goals in the Eleventh Five-Year Plan, but also bears great significance to implementing the Scientific Concept of Development in an all-round way, strengthening and improving macroeconomic control, further changing the mode of economic growth, promoting adjustment, optimization and upgrading of industrial structure, and maintaining stable and rapid development of the national economy.
The Interim Regulation identifies the targets, principles, direction and priorities of the adjustment of industrial structure at present and for a future period, and it also provides the categorizing principle of the Guiding Catalogue, i.e. industries are categorized into three types: the encouraged, restricted and those to be eliminated. The Interim Regulation also specifies the supplementary policy measures to be provided by the Guiding Catalogue. The Guiding Catalogue is a document supplementary to the Interim Regulation, covering more than 20 industries that include agriculture, water conservancy, coal, power, transportation, information industry, iron and steel, nonferrous metals, petrochemical industry, building materials, machinery, light and textile industries, service industry, environmental and ecological protection, conservation and comprehensive use of resources, and etc. In total there are 539 articles in the encouraged category, 190 in the restricted category and 399 in the to-be-eliminated category.
The Interim Regulation on Promoting the Adjustment of Industrial Structure provides clear requirements for the encouraged, restricted or to-be-eliminated categories. Regarding investment projects falling into the encouraged category, they are subject to examination and approval, authorization or filing procedures according to relevant investment regulations of the state. Financial institutions shall grant loans to support these projects in line with credit granting principles, and these projects should also be supported by preferential taxation policies. Investment is prohibited in new projects falling into the restricted category. Departments in charge of the administration of investment must not take these projects into the examination and approval, authorization or filing procedures. Financial institutions should not grant loans to these projects and authorities in charge of land management, urban planning, environmental protection, quality inspection, fire-fighting, customs, industry and commerce shall not complete relevant procedures for these projects. With regard to enterprises possessing current production capacity that falls into the restricted category, they are allowed to adopt upgrading measures within a limited period of time. Financial institutions may continue to support them in accordance with credit granting principles. Investment is prohibited in projects in the to-be-eliminated category. Financial institutions shall stop providing credit support of any form and take measures to recover loans that have already been made. Local governments, relevant departments and enterprises concerned shall take effective measures to eliminate these projects within a set period. During that period, competent departments in charge of price can raise electricity tariffs for the projects. With regard to production processes and technologies, equipments and products that are to be eliminated according to state regulations, their import, transfer, production, marketing and use are strictly prohibited. As for those enterprises that fail to eliminate obsolete production processes and technologies, equipments or products in due time, local governments at all levels and relevant departments shall order them to stop production or close them in line with state laws and regulations.
The Decision of the State Council on Implementing the Interim Regulation on Promoting the Adjustment of Industrial Structure calls for relevant departments and local governments in all provinces, autonomous regions and municipalities to take the adjustment of industrial structure as a priority for reform and development at present and for a period to come. The policy system should be further improved to promote the adjustment of industrial structure while the organizing and coordinating work as well as supervision and inspection mechanism shall be established or reinforced. All parties concerned shall combine their efforts by conscientiously fulfilling their responsibilities and work closely with each other to make progress in adjusting, optimizing and upgrading industrial structure.
China to adjust industrial structure