21th Century Business Herald reported that Industrial Transformation and Upgrading Scheme during 12th five year plan ruled out by Ministry of Industry and Information Technology is set to be released in recent times with 7 special schemes and more than 40 trade schemes.
As an overall scheme made by MIIT, it aims to speed up industry structure transformation, substitute extensive development pattern for the intensive one and strengthen the value added products in face of the industrialization and urbanization during 12th five year plan. It also proposed that the limitless release of outdated capacities should be restricted and natural resources be reasonably utilized.
In addition, the industrial concentration ratio should be enhanced through M&A s and elimination measures. All above corresponds with the new industrialization path of Chinese characteristics and modern industry system development set out in 12th five-year program planning.
An insider from MIIT said China manufacturing enterprises have large scales but with weak profitability and inferior management. The domestic cement output for instance accounted for 50% of the total global volume while China National Building Materials Group Corporation a state owned enterprise only ranked 484th amongst Fortune 500 with the operational revenue of USD 19995.8 million and profits of USD 313.2 million in 2010. The domestic output of crude steel finished at more than 0.6 billion tonnes in 2010 whereas the industry sales profits slumped to 2.57% in 2010 from 8.1% in 2004, far behind the bank benchmark deposit rate of 3.5%.
To address the problem, MIIT also lay down seven missions including self innovation, strategic new industry development, green economic growth with low carbon emission, healthy development of small-and-medium sized enterprises, self-brand and intellectual property cultivation etc.
Curbing boundless expansion of capacities is also a focus on the scheme. Mr Kong Xiangzhong Secretary General of Shanghai Cement Association noted that the industry standard was expected to be elevated with new type dry process cement occupied over 95% up from 80% now. The concentration ratio of Top 10 cement enterprises may also be increased to 30% by 2015 from 26% by 2010 which seemed still far too low.
Mr Li Shijun Executive Vice Secretary General of China Iron and Steel Association held the view that the steel industry would enter a new phase output surging at a slow pace, product qualities and mix being perfected, energy conservation and emission reduction showing greater effects during 12th five year plan without a massive investment to drive the consumption. Therefore, it is a necessity for the steel enterprises, taking a customer-oriented approach to produce unique and high value-added products to avoid the competitiveness at a low level.
(Sourced from 21th Century Business Herald)
