China publishes detailed plan to adjust industry structure

By @ibtimes on

China's economic planning agency on Tuesday published a detailed list of industries that it would encourage, restrict or ban, a blueprint that could have a far-reaching impact on investment activity China over the coming years.

The National Development and Reform Commission said in a 111-page list that it would eliminate oil refineries with capacity of less than 40,000 barrels per day by 2013.

China will eliminate on-grid coal fired power generators of less than 100 mw and shut down coal mine shafts with capacity below 30,000 tons per year, according to the list on the agency's website http://www.ndrc.gov.cn.

China will also restrict construction of crude distillation units below 200,000 barrels per day.

It also vowed to restrict new projects for mining tungsten, moly, tin, antimony, and rare earths.

But China will also encourage nuclear power station construction and exploration of uranium as well as further development of advance nuclear reactor technology.

The list will serve as a guideline for Chinese regulators in making policies on tax, bank credit, land and trade, and will also be a reference for Beijing to decide which foreign investors are welcomed.

For projects in sectors listed as to be encouraged, investors often find it easy to obtain approval from the government, in addition to cheap bank loans and land as well as preferential tax treatment.

But for industries labeled as restricted or to-be-eliminated, investors will find it hard to get governmental approval for new projects and to maintain operations. For example, such projects would be the first to be cut off at times when electricity is restricted because of power shortages.

(Reporting by Tom Miles and Jim Bai; Editing by Jacqueline Wong)

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