Laws of the People's Republic of China

The State Economy and Trade Commission

Circular of the State Economy and Trade Commission on the Promulgation of the Guidance of Recent Development in the Industrial Sector

GuoJingMaoHangYe [2002] No.716

September 28, 2002

The economy and trade commissions (economy commissions) of all provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed on the State plan and Xinjiang Army Corps of Production and Construction, all associations directly under the State Economy and Trade Commission:

In order to carry out the spirit of the "Outline of the Tenth Five-Year Plan for National Economic and Social Development" and of the industry and sector planning of the Tenth Five-Year Plan, the State Economy and Trade Commission, upon the requirement of many enterprises and financial and securities departments and other departments, proposes after study the recent development directions for such industries as machinery, automobiles, metallurgy, nonferrous metal, petroleum, petrochemical industry, chemical industry, medicine, coal, building materials, light industry, textile, etc.. It aims to strengthen the macro-control, guide the direction of the investments with the fixed assets in the whole country, optimize the allocation of resources, reduce the repeated construction, and promote the healthy and stable development in all industries, and thus to improve the integral competitive power of China's industry.

The recent development of the industrial sector must adhere to five principles, namely, the principle of market orientation, that of giving prominence to the key points, that of technical progress, that of coordinative development and that of sustainable development. We should proceed from the market to give full scope to the basic function of the market mechanism in allocating resources, and shall, by taking the adjustment of product structure, technical structure and enterprise organizational structure as the point of penetration, focusing on the development of new products, improvement of product quality, technical progress and reduction of costs, and prevention of pollution, intensify greater efforts in technical renovations, improve the level of process and technical equipment, and thus to form independent intellectual properties and products of famous brand with key technology. We should give full scope to the integral advantages of industry, optimize the distribution of industrial productive forces and the regional economic structure. We should continue eliminating the outmoded equipment, technologies and process, compress the superfluous and outmoded production capacity of some sectors, and promote the optimization and upgrading of the industrial structure.

We have printed the Guidance of Recent Development in the Industrial Sector and hereby distribute it to you. Please abide by and implement it.

Guidance of Recent Development in the Industrial Sector

In order to carry out the spirit of the "Outline of the Tenth Five-Year Plan for National Economic and Social Development", it is proposed in the "Outline of the Tenth Five-Year Plan for Industrial Structure Adjustment Planning" that the overall development target is to improve the integral quality and international competitive power of the industry, and to strengthen the ability of sustainable development. During the Tenth Five-Year Plan, we should, taking the enterprises as the main body, the market as the orientation, the development as the topic, the structural adjustment as the motif, and the improvement of the competitive power as the target, reasonably direct the contribution of public funds and foreign investments, adjust the public investment structure, improve the efficiency and benefits of using funds, so as to promote the structural adjustment of the industrial sector, and guarantee the realization of the target under planning. It is both the requirement of promoting industrial optimization and upgrading, and the urgent need in enlarging the domestic needs and stimulating the economic growth. The recent development orientation of the industrial sector is hereby proposed pursuant to the industrial development direction clarified in the industry and sector planning of the Tenth Five-Year Plan for the sake of strengthening the macro-control, leading the acts of market subjects, and optimizing the allocation of resources.

The basic principles that we must adhere to, in the recent development of the industrial sector, are as follows:

I.

The principle of market orientation. Since 1990s, in respect of the market environment of China's economic development, the sellers' market has changed into the buyers' market, and the restriction by supply has changed into that by demands. The formation of the buyers' market marks that China's industrial economy is entering into an environment of an overall competition, and the economic development has transited to a new stage. Therefore, each industrial sector must strengthen the analysis on market environment, foresee the development trend of both domestic and international technology economy, and determine according to the demands on the market the key direction of sector development and structure adjustment.

II.

The principle of highlighting key industries and products. We should accelerate the development of the industries and products with rapid growth in market demands, those of great impact to the overall situation of the development of national economy, those whose domestic production is presently unable to meet the demands, those closely connected with the industry, those with strong impetus, or those that are potential new points of economic growth, and should regard them as the key points of the recent development. Meanwhile, we should firmly stop the unreasonable repeated construction, and should, by supporting the advantageous enterprises to the realization of a certain large scale, high level and high quality, promote the structure adjustment of products. We should rectify the market and economic order, set up and improve the mechanism of selecting the superior and eliminating the inferior, as well as accelerate the elimination of the outmoded production capacity which wastes resources and pollutes the environment.

III.

The principle of technical progress. We should adhere to the principle of combining independent innovation with introduction of technologies, and emphasizing hardware transformation and software transformation, and should support the joint development of common industrial technologies, key technologies and perspective technologies. We should strengthen the information-based management of enterprises and the construction of marketing network, accelerate the training of the contingent of talented people, increase the necessary input, and raise the management level of enterprises. We should accelerate the transformation and upgrading of the traditional industries by using hi-techs and advanced suitable technologies, and make greater efforts to transform the traditional industries with wide market demands. We should also optimize the product and technical structure, improve the labor productivity, give scope to the advantages of scale economy, raise the level of technical equipment, and strengthen the enterprises' ability of prompt reaction. We should not carry out the general transformation with the main targets to fill up vacancies and to enlarge production capacity.

IV.

The principle of coordinative development. We should give scope to the integral advantages of the industrial sector, increase the proportion of independently produced major equipment, and meet the demands in other manufacturing sectors in respect of reducing the cost of investment and raising the technical level; the reorganization and upgrading of energy industry and raw materials industry must aim at improving their international competitive power, and creating conditions for the downstream industries to participate in the international competition; we should make greater efforts in technical breakthrough and innovation, eliminate the "bottle-neck" restrictions in the industrial chain that impacts the integral competitive power; we should earnestly strengthen the geological prospecting, do well in the construction of mines, make full use of domestic and foreign resources, so as to provide guarantees to the continuing development of the basic raw materials industry and energy industry; we should give full scope to the comparative advantages, enable the industries in the eastern, the central and the western regions to develop coordinately, and assist the old industrial bases and western regions to accelerate their adjustment of industrial structure and industrial upgrading.

V.

The principle of sustainable development. We should give a prominent strategic position to saving the resources and protecting the environment, promote the technologies beneficial to saving energy, environmental protection and clean production. We should also adopt the strategy of controlling the source, reduce by a big margin the pollution caused by pollutants and poisons to the environment.

According to the above principles and upon study, we have proposed the recent development orientation for machinery, automobiles, metallurgy, nonferrous metal, petroleum, petrochemical industry, chemical industry, medicine, coal, building materials, light industry, textile, etc., which is offered to all investors and the financial, securities and public consulting departments for reference.

Recent Development Orientation for Machinery Industry

I.

Major Technical Equipment

(a)

Electric Power Equipment.

(1)

Industrialization of Cleaner Coal Generating Equipment.

We should give priority to developing projects of industrializing supercritical machine sets of 600,000 KW or more, re-circulating fluidized bed boilers of 300,000 KW and large gas turbines, and to transforming supercritical boilers of 600,000 KW to 1,000,000 KW and their auxiliary high-pressure heaters and valves, large re-circulating fluidized bed boilers, steam-gas cycle exhaust heat boilers, as well as productive technology conditions of gas turbines and process test equipment.

(2)

Improvement of Productive Technology Conditions for Large Hydroelectric Equipment.

We should, depending on the Three Gorges Project, improve the manufacturing capacity of large hydroelectric equipment, with the annual output to be 3,800,000 to 4,000,000 KW (including 4 machine sets of 700,000 KW for the Three Gorges Project), meanwhile carry out the economic and technical cooperation with foreign parties in respect of the pump storage groups, transform the manufacturing engineering of key components, and improve the processing capacity for large components.

(3)

Industrialization of Ultra-High Tension DC Transmission Equipment.

We should give priority to the localized manufacturing of convertor transformers, flat-wave reactors and convertor valves, improve the conditions for insulation processing and clean assembling of large products; we should accelerate the mass production of high-power thyristor elements of 8000 V and 3000 A with the diameter of 125 mm, and improve the reliability thereof; we should improve the means of digital board design under direct current system, add large digital timing analog devices; we should improve the experimental conditions, and achieve the ability of experimenting 500 KV convertor valves under high voltage and in operation.

(4)

Automation of Electric Power System and Industrialization of Intelligent Electricity Transmission Equipment.

We should accelerate the industrialization of the software and hardware for digital protection system and equipment, eliminate as soon as possible the control by high-pressure direct current convertor stations and valve systems, adjust the technical bottleneck; we should meet the demands in the indoor and outdoor dense and intelligent switching equipment for electric network rebuilding; we should accelerate the transformation of the production lines of composite fibre-optical aerial earth wires, and make great efforts to develop such new communication equipment in electric power system as photo-communication, etc.; we should promote the first and second strategic restructuring of enterprises in equipment production, improve the market share and service ability of intelligent, systematized and complete equipment.

(b)

Heavy-Duty Metallurgical and Mine Equipment.

(1)

We should, by depending on the construction projects of technical renovations, water conservancy and hydroelectricity, etc. in the industries of large metallurgy, non-ferrous metal, petrochemistry, environmental protection, coal, building materials, automobile and shipbuilding, etc., realize as soon as possible the localized production of a group of major equipment.

We should develop such mine machinery as large grinding machines, multi-rope elevators, underground scrapers, rotary cement kilns, large mine dumpers, etc. and extend their service life; we should, on the basis of further improving the quality of traditional metallurgical equipment, make great efforts to develop automation equipment and energy-saving process and technical equipment, and improve the capacity of producing whole sets of short-flow equipment; we should realize the industrialization of the 300000-saloon car production lines of punching structural components; we should develop such new artificial board equipment as equipment elaborately processed with non-metals, middle-density fabric boards and oriented flakeboards, etc.; we should improve the capacity of producing hydrogenation reactors of 500 to 1000 tons, large cranes, equipment for integrally molding high-speed railway locomotive wheels and solid garbage treatment equipment.

(2)

Making Great Efforts to Raise the Technical Level for Producing Large Cast and Forged Components.

We should develop large purified liquid steel vacuum pouring process, raise the level of forging precision and computer control; raise the level of automation of weighing and adding materials with electric stove, and encourage the adoption of advanced technical process and equipment for heat treatment.

(c)

Petrochemical Equipment.

We should, in response to the demands in the development of land and sea petroleum and natural gas, the West-East natural gas transmission project, the industrial sectors of large petrochemistry, electric power, metallurgy, large water power projects, environmental protection and news press, etc., develop a group of high-temperature, high-pressure, high efficiency and precise equipment, and improve the capacity of producing whole sets.

We should emphasize desert and sea petroleum equipment, natural gas gathering and transportation pipeline equipment, hydrogenation reactors, etc., and develop high efficiency power-driven drilling machines and top-driven drilling systems; we should develop deep-well oil extraction equipment, underground oil and gas separation equipment, gathering and transporting equipment and network forming equipment for oil and gas pipelines; we should develop valves for distance transportation of petroleum and natural gas with pipelines, large-caliber spheric valves, metal sealed plate valves, etc.; we should develop hydrogenation reactor of a thousand tons, key catalytic cracking equipment and other special oil refining equipment.

We should emphasize the development of ethylene cracking furnaces, such ethylene production equipment as large ethylene propylene spheric jars, etc., and such fertilizer process equipment as ammonia convertors, heat exchangers, etc.; we should continue developing the process compressors suitable for key projects and for the three chemical industries, such as new hydrogen compressors, circulating compressors, butadiene screw compressors, carbon dioxide compressors, hydronitrogen gas compressors, coal gas compressors, and meanwhile develop petroleum and natural gas compressors.

We should accelerate the development and application of high efficiency and energy-saving new products and new technologies, and improve the use efficiency of various pumps, fans, compressors, valves, refrigeratory air-conditioning equipment, space-division equipment, vacuum equipment and heat exchanging equipment.

(d)

Complete Environmental Protection Machinery.

(1)

New-Style Environmental Protection Machinery.

In respect of the equipment for the prevention and control of atmospheric pollution, we should support the development of equipment for dust elimination and desulfurization of flue gas from coal burning with large thermal power machine set. In respect of the equipment for the prevention and control of water pollution, we should emphatically develop the urban sewage treatment equipment with a capacity of treating 200,000 cubic meters per day, and raise the level of manufacturing such equipment as grilling, aeration, mud scraping and sucking, sludge concentration and dewatering, sludge methane generating equipment, etc.; we should develop complete sanitary sewage treatment equipment suitable for medium and small towns and small areas with a capacity of treating 100,000 cubic meters per day, and complete high concentration industrial waste water treatment equipment. In respect of solid wastes treatment equipment, we should emphatically develop complete house refuse burning and compost equipment, etc., closed poisonous and harmful wastes storage and transportation equipment, such complete monomeric or compound equipment as special high temperature oxidation burning equipment, industrial wastes collecting, selecting, washing, smashing, packing, transporting and recycling equipment.

(2)

Localized Demonstration Projects.

We should support the localized demonstration projects in such key areas as urban sewage treatment, high concentration industrial waste water treatment, thermal power plant desulfurization of flue gas from coal burning, urban house refuse treatment, etc.. We should solve antiseptic, automatic control, energy-saving and whole-set-forming technologies, and improve the single-machine as well as systematic reliability.

(e)

Large Construction Machinery.

(1)

Accelerating the Development of a Group of Products Urgently Needed in the Market.

Upon the needs in the "West-East natural gas transmission project", the "South-to-North water diversion" project, Qinghai-Tibet railway, the urban subway and urban and rural infrastructure construction projects, etc., we should emphatically develop such large earthwork engineering machinery as hydraulic excavating machines of 40-85 tons, wheeled loaders of 6-10 tons, caterpillar soil shifters of 320 horsepower or more; high-quality highway ground construction and maintenance machinery as complete road stone joint smashing equipment of 100 tons or more per hour; and such tunnel digging machinery as ground cranes and cross-country cranes of 25 tons or more; large shield machines with the diameter at 5-10 meters, tunnel entry-driving machines of 160 KW or more.

(2)

Improving the Reliability of Key Parts and Components.

We should make great efforts to improve the work efficiency, reliability and service life of dynamic power-shift gear boxes, hydraulic pitch controllers, wet-braking closed driving bridges, and braking friction plates; we should raise the technical level of planetary reducers and hydraulic element-controlled meters, and improve the comfortableness of the driver's cabs; we should extend the service life of such high-abrasive materials as mixing arms, lining boards and spouts in bucket teeth or concrete equipment, wear-resisting conveyers in ground machinery, and drill rods, drill bits, etc. in rock drilling and smashing machinery.

II.

Agricultural Machine

(a)

Stressing the Development of a Group of New Products with Great Market Potentiality and Good Future.

In respect of the mechanical equipment in the planting industry, we should emphatically develop wheeled tractors of 100 horsepower or more and the auxiliary operation machine for less or exempted cultivation or deep loosing, straw and stubble smashing and field returning machine, joint operation machines for precise fertilization and seeding, complete equipment for cultivating sprouts of and for planting rice, maize, cotton and oil crops in factories, plant protection machinery, joint reapers, cotton pickers and complete agricultural equipment, etc..

In respect of new-style water-saving and irrigating equipment, we should emphatically develop complete high efficiency equipment for sprinkling irrigation and drip irrigation, irrigating equipment prevention and control of sand, rain-collecting and irrigating equipment for arid and half-arid areas, distance automatic check and control system composed of looped network wells for well irrigation areas, key parts of water-saving and irrigating equipment and automatic control systems, etc..

In respect of complete equipment for extractive processing of agricultural by-products, we should emphatically develop complete equipment for processing high-grade flour, special flour and starch, complete equipment for processing long-staple cotton and machine-picked cotton, complete equipment for cleaning, classifying, sterilizing, storing and transporting fruit and vegetables and for retaining them fresh, complete equipment for cleaning, classifying, and drying foods, and complete equipment for disinfecting rapeseeds and cottonseeds, etc..

In respect of complete equipment for intensive breeding and grass lands construction, we should emphatically develop complete equipment for new-style breeding in hogpens and cattle farms of scale, and that for processing milk products, complete equipment for treating faecal and organic fertilizers in large breeding farms, equipment for harvesting, storing and transporting ensiles, complete equipment for reaping, bundling, piling, storing and transporting pastures, as well as the development of garden machinery.

(b)

Strengthening the Constructure of the Enterprises' Technical Development Ability.

We should strengthen the construction of technical centers in enterprises, encourage the manufacturing enterprises to cooperate with institutions of scientific research and institutions of higher education, and should develop products with independent intellectual properties. We should raise the technical level of such key products as tractors of 80 horsepower or more and their auxiliary farming tools, rice cultivating, planting and harvesting machinery, maize reapers, and equipment for harvesting cotton and processing machine-picked cotton, etc..

III.

Basic Machinery

(a)

Improving the Market Competitive Power of Products from Numerical Control Machines.

We should emphatically develop popularized type of numerical control machines, set up and improve China's platform and technical criteria for the open-end numerical control system by taking advantage of the open-end numerical control system which is greatly needed by popularized type of numerical control machine and which has independent intellectual property, and thus create conditions for networking of enterprises and accession to network by numerical control machines. We should further research on shunt processing technologies, integrated technologies, build up the industrialization base with numerical control systems of batch scale, and support the development of key auxiliary functional parts at the same time. We should improve the functions and quality of such key auxiliary functional parts as high-speed principal axis, tool magazine manipulators, numerical control cutter frames, dynamic chucks, high-speed ball-screws, high-speed prevention systems, numerical control cutting tools, numerical control systems and servo, etc..

(b)

Improving the Quality and Functions of Products of Mechanical Basic Parts.

In respect of the bearing industry, we should develop high-grade bearings and special bearings for automobiles (motorcycles), railway, high-power agricultural machines and engineering machinery, and precision equipment, etc., and support the projects of fine finishing of blank bearings and industrialization of such parts and components as bearings and rolling parts at the same time. In respect of the hydraulic airtight industry, we should set up development bases of hydraulic system products, and develop servo proportion technology, technologies integrated with mechanism, electron, and hydraulic-pressure, and bus control technologies, as well as raise the level of designing and manufacturing hydraulic and pneumatic devices. In respect of the general parts and components industry, we should give support to some important enterprises and enable them to improve their check conditions, to improve their product quality, and to develop a group of such products as high-speed hard face gears, high-intensity, deformed fixing components, etc.. In respect of the mould industry, we should develop the moulds, stamp dies and forging dies, and set up and improve the mould development system.

(c)

Vigorously Developing the Instrument Meter Manufacturing Industry.

We should, around the state's key projects and major technical equipment projects, emphatically support the products of digital, networking and intelligent technologies and the projects on improving the precision and reliability of products. In respect of the industrial automation area, we should emphatically support the master control devices of on-the-spot bus technologies and such products as intelligent meters, technical electric energy meters with a long service life, electric network control systems, etc.. In respect of scientific testing instruments area, we should develop such products as process testing and analyzing instruments, automatic testing systems and global positioning systems (GPS), etc.. In respect of office machinery area, we should develop such products as digital duplicators, digital cameras and their auxiliary developing and enlarging equipment, etc.. In respect of meter element materials, we should emphatically support the development of such meter elements as new-style sensors, etc. and of new-style compound materials. Meanwhile, we should enhance the setup of the research and development system.

(d)

Providing Dynamic Guarantee for Replacing Old Machinery and Automobile Products with New Ones.

We should develop low-emission and good-performance engines used for new-style vehicles, and develop such key parts and components as oil pump flow nipples (e.g., oil distribution pumps, electrically controlled injection systems, P-shape pumps, and so on), friction components and post-emission treatment components used in highly reliable large and medium horsepower diesel engines, diesel engines in economic-type saloon cars or minitype vehicles, environmental-protection diesel engines in new-generation agricultural transport vehicles in large tractors, joint reapers, engineering machinery and new-style diesel engines.

Recent Development Orientation for Auto Industry

I.

Saloon Cars

We should develop economical type of saloon cars complying with the regulations on state security, energy saving and emission as well as the requirements of private individuals on using cars, and should increase the proportion of economical type of saloon cars in the total output of automobiles. We should develop saloon cars of green environmental protection used as taxies. By the end of the Tenth Five-Year Plan, petrol engines must reach Euro-II emission control standard, while medium and high-grade products shall reach Euro-III emission control standard.

We should appropriately develop diesel engines of saloon cars, single fuel and gas engines and hybrid dynamic systems. We should give support to the advantageous enterprises and enable them to have the capacity of mass production by cooperating with foreign parties, and to make their products reach Euro-II and III emission standards.

We should encourage the advantageous enterprises to carry out the platform strategy by extending international cooperation, and to develop products in the series of economical type of saloon cars through combining joint development and independent development on the basis of utilizing present product platform. We should make use of such soft and high-efficiency manufacturing technologies as numerical control equipment and processing centers, etc. to transform and construct the production lines of new-style engines of economical type of saloon cars.

II.

Large and Medium Passenger Vehicles

We should develop the chassis of special large and medium passenger vehicles, and accelerate the development of low-floor chassis of urban passenger vehicles. We should emphatically develop hi-tech parts and components used for axle and suspension systems of large and medium passenger vehicles, engines of such gaseous fuel as liquefied petroleum gas (LPG) or compressed natural gas (CNG), multiple dynamic installation systems, automatic speed transmission systems of large and medium passenger vehicles, and so on.

III.

Cargo Vehicles

(a)

High-Powered Heavy-Duty Cargo Vehicles and Tractors

We should give support to the advantageous heavy-duty automobile enterprises and enable them to adjust their product structure, increase the proportion of their high-powered heavy-duty cargo vehicles among heavy-duty cargo vehicles, improve the functions and quality of present products by making use of the present basis and through joint venture and cooperation, so as to make China's heavy-duty automobile products achieve or approach the international advanced level. By the end of the Tenth Five-Year Plan, new heavy-duty vehicle products must be installed with anti-skid brake system (ABS), and their emission shall reach Euro-III emission standard. We should emphatically develop high-grade heavy-duty cargo vehicles and tractors of 300 horsepower or more, which are suitable for high-speed highway transportation, serialized driver's cabs of medium and high-grade heavy-duty automobiles, and heavy-duty special automobile chassis. We should extend the adoption of such devices as ABS and ASR, EBS, hydraulic decelerator, etc., and improve the safety, comfortableness and reliability of the products.

(b)

Heavy-Duty Automobile Engines

We should extend such technologies as high-speed direct injection, multi- spiracle, common rail and cooled EGR, etc., and should emphatically develop products in the series of new-style engines with the emission at 9 liters or more and the output power at 300 horsepower or more, which reach Euro-II and Euro-III emission control standards, so as to form the capacity of mass production. We should extend the product series, and appropriately develop engines fueled with electric sprayed single compressed natural gas (CNG) and liquefied petroleum gas (LPG).

IV.

Special Automobiles

We should raise the proportion of special automobiles among the output of cargo vehicles and the proportion of special heavy-duty automobiles among special automobiles. We should emphatically develop hi-tech and high value added products, which mainly include: heavy-duty semitrailers and special semitrailers suitable for high-speed highway transportation; urban environmental hygiene vehicles such as road clearing vehicles, garbage transport vehicles, sewer dredging vehicles and mud absorption vehicles, etc.; construction engineering vehicles, such as vehicles carrying cement in bulk, concrete mixing transport vehicles, concrete pump vehicles, heavy-duty crane trucks and various other engineering vehicles; urban services vehicles, such as aerial ladder fire trucks, ambulances, etc.; airport special vehicles, such as heavy-duty airplane fuelling vehicles, airport snow sweeping vehicles, deicing vehicles, etc.; special automobiles used in oil fields and deserts; multifunctional road maintenance vehicles, such high-grade highway management vehicles as emergency ambulances, etc.; various special high-level and high-quality national defense automobiles which meet the requirements in national defense modernization. Meanwhile, we should, by taking advantage of developing special chassis and special devices, emphatically develop good-performance, highly reliable and serialized special automobile chassis meeting the conditions for high-speed highway use. We should develop hi-tech special devices combined with applied electronic information technologies, sensing technologies, automatic control technologies, technologies integrated with mechanism, electron, and hydraulic-pressure or intelligent technologies.

V.

Automobile Parts and Components

We should improve the abilities to develop automobile parts and components, to provide auxiliary items and to supply modularized goods, and should try to make the functions of key products reach or approach the international advanced level. We should increase foreign exchange earnings from exports, and raise the proportion of providing auxiliary items to the international automobile market. We should raise the rate of localized auxiliary items for automobile products, and realize the simultaneous development with the host engine. We should support and encourage some advantageous enterprises to strengthen international cooperation, to make use of hi-tech to raise the level of products and the manufacturing level, and to enter the system of international auxiliary items. We should emphatically develop the following three categories of products:

The first category includes key parts and components of automobiles which are at their starting stage considered as a gap in China and represent the technical development trend of automobile industry, such as anti-skid brake systems, safety gas bags, electrically controlled fuel injection devices, exhaust purification devices, and automatic speed transmissions, etc..

As for the second category, China has attracted many investments and has formed a good basis, thus through efforts, we may have the advantage in automobile key parts and components, such as braking systems, steering systems, speed transmissions, clutches, compound meters, automobile electric machines, etc..

The third category includes the products for which China has comparative advantages, which are mainly material-intensive, labor-intensive automobile parts and components, automobile parts and components not convenient for long-distance transportation, and other automobile parts and components with comparative advantages, such as automobile wheel hubs, electric wire bundles, chairs, shaped blankets, and storage batteries, etc..

VI.

Motorcycles

We should emphatically develop updated motorcycles aiming at high reliability, durability, low-emission and low consumption of oil, which could help the large and medium cities meet the requirements of green environmental protection (such as electric spray vehicles with catalytic converter, double fuel vehicles, electric motor cars, etc.) and new-style engines. We should give scope to the comparative advantages, develop advantageous products, and enlarge exports.

VII.

Agricultural Transport Vehicles

We should improve the safety and environmental protection function of agricultural transport vehicles, try to reach Euro-I emission control standard by the end of the Tenth Five-Year Plan; we should also develop and research on, as soon as possible, low-emission, low-noise, new-style, single cylinder or small diameter multi-cylinder diesel engines which meet the national environmental protection standards, so as to meet the needs in the auxiliary production of agricultural transport vehicles; further improve the drive systems of three-wheeled agricultural transport vehicles, and promote the upgrading and updating of the products.

VIII.

Scientific Research and Development Ability

We should invest to establish and improve the national centers for technical development of automobiles, parts and components and motorcycle products. We should encourage the advantageous enterprises to improve their ability of product development by various means like joint development, technology introduction, cooperation with foreign parties, and purchase of foreign specialized development institutions, etc.. We should, on the basis of vehicle body development, strengthen the research and development of chassis matching technology, and lead the development of the parts and components towards systematic development.

We should extend and popularize such technologies as Computer Aided Design (CAD) / Computer Aided Manufacturing (CAM) / Computer Aided Engineering (CAE) / Computer Aided Testing (CAT), etc., and accelerate the establishment and improvement of databases, so as to form a network platform. We should encourage the joint venture enterprises in China to join the development network of large international companies, so as to shorten the development period. We should encourage and give support to the advantageous enterprise enable them to actively develop new technologies, new materials and new sources of energy urgently needed by automobile products.

IX.

Purchasing and Sales Service System

We should support and lead the advantageous enterprise and enable them to apply Internet technology, optimize purchase system and sales service system, and gradually set up new business relationships with their clients, dealers and suppliers, etc., as well as reasonably and effectively utilize resources, so as to provide the consumers with all-round services, and set up a sales system and purchase network basically integrated to the international practices as soon as possible. We should give support to the advantageous enterprises and enable them to utilize public resources and invest to set up brand automobile stores engaging in the sale of new vehicles, recycle of old vehicles, maintenance services, supply of parts and components as well as information feedback, to set up electronic commerce websites combining purchase and sales services and information for providing services to the whole industry and backbone enterprises, and to set up the sales service system with distributing, transport and management functions.

Recent Development Orientation of Metallurgical Industry

I.

Structural Adjustment of Products

We should develop such high value-added products as cold-reduced sheets, coated plates, cold-reduced stainless steel sheets, cold-rolled silicon steel pieces, etc., which need to be imported in a large number at present; and should, with respect to the technical renovations projects under national debts and involved in the said products, actively create conditions to put them into production on time.

We should give support to the qualified heavy and medium plate enterprises to carry out systematic transformation, get through a group of specialized heavy and medium plate production lines, eliminate a group of outmoded medium plate mills, so as to form intensive, large-scale and specialized production.

We should, in combination with the structural adjustment of special steel enterprises, and in compliance with the principle of dividing the work upon specialties in respect of such products as bearing steel, gear steel, spring steel, mould steel, long stainless steel materials, etc., carry out auxiliary improvement of process technologies and equipment by aiming at the real quality level of international famous products.

We should support carbon product enterprises to renovate large diameter and super high-power electrode and joint technologies, compress the output of common-power electrodes, and increase the output of super high-power electrodes as well as special graphite, millipore carbon bricks, and carbon fibers.

We should develop such rich resources in China as iron alloy varieties and various alloy powder and compound iron alloys, etc., increase such refined low-carbon, low-sulfur and low-phosphor products as chromium and manganese iron alloys, and compress the output of common iron alloys.

We should develop the high quality, energy-saving, long-life and green fire-resistant materials needed in such industries as metallurgical, non-ferrous metal, chemical, building materials and light industries.

At present, the iron-making and steel-making production capacities have exceeded the demands, so do that of the common large, medium and small section bars, common wire rods, hot-rolling narrow strip steel, common welded tubes and common seamless steel pipes. The projects of the above newly built or enlarged technical renovations must be approved strictly according to the procedures, and the financial institutions shall grant loans in compliance with the industrial policies.

II.

Clean Production

Recently, we should emphatically do well in the systematic transformation project on enterprises under experiment of demonstration of clean production. We should popularize the 40 advanced energy-saving and environmental protection technologies: thick material layer sinter, globular sinter, pelletizing sinter, dry coke quenching, blast furnace top differential pressure generation, blast furnace longevity, sintered waste heat recycle, coke-oven coal gas desulfuration and de-cyanogens, blast furnace oxygen-enriched coal spraying, prevention of splitting residues in converters, converter coal gas recycle, high efficiency continuous casting, continuous casting billet hot packing and hot delivery, formation in one heat, furnace regenerative burning, electric stove comprehensive energy-saving, metallurgical process automatic control, and general drainage treatment, comprehensive utilization of steel and iron residues, control of low concentration sulfur dioxide smog, etc.. We should stress the technical innovations with low investment and obvious effects, such as steel ladle dryer and segmentation rolling technologies, etc.. We should promote clean production thoroughly on the basis of uniform planning.

III.

Information Construction

We should, in light of the actual situation of the enterprises, strengthen the process control of present procedures, and form the production line management method for the new production lines under the computer uniform process control of two levels or two and a half levels. We should research on and establish a system of forecasting the functions of steel materials, accumulate data for the development of new products, lower the regular all-round testing rate, and shorten the product development period. We should set up enterprise information trunk network, local area network and work stations, and build up electronic commerce information platforms connected with international ones.

Recent Development Orientation for Non-Ferrous Metal Industry

I.

Copper Industry

We should support copper smelting enterprises' technical renovations aiming at environment improvement, and make great efforts to implement clean production. We should develop copper processed products with good market prospect, such as copper materials used in electronic industry, electrolytic copper foils with the thickness to be 18 micron or less and the width to be 1.2 meters or more, copper stripes used in transformers, internal screw thread copper pipes, water pipes made of copper, and so on. We should actively create conditions to develop domestic new mines. We should encourage enterprises to set up stable materials supply bases by concluding long-term purchase agreements, by investing to set up overseas mines and by other means. We should eliminate the small copper smelting plants with heavy pollution and low metal recycle rate in accordance with the relevant policies and regulations of the state. We should do well in the regenerative utilization of wasted copper materials.

II.

Aluminum Industry

We should accelerate the pre-baked transformation of aluminum electrolysis, and must combine the newly built and transformed large pre-baked aluminum cells with the elimination of soderberg electrolytic cells, and try to eliminate soderberg aluminum cells in 2003. We should accelerate the construction of high-level hot tandem rolled aluminum plates and belts production line, develop high-precision aluminum plates and belts, electronic aluminum foils, large industrial section bars and other varieties. We should stop repeated construction of electrolytic aluminum, and any newly built electrolytic aluminum project must be strictly subject to the approval formalities in accordance with the relevant provisions. We should stress the recycle and utilization of wasted aluminum materials.

III.

Lead-Zinc Industry

We should give support to the lead-zinc smelting enterprises and enable them to carry out technical renovations around energy saving and consumption reduction and pollution control by using advanced smelting process home and abroad and acid manufacture process with low-concentration sulfur dioxide. We should encourage smelting enterprises to invest in mine enterprises, and cultivate a group of advantageous enterprises in the lead-zinc industry that are integrated with mining, selection and smelting. We should support lead-zinc regenerative utilization enterprises and enable them to become strong. We should strictly control the enlargement of lead-zinc smelting capacity, and accelerate the elimination of outmoded lead-zinc smelting process and equipment.

IV.

Other Non-Ferrous Metals

We should encourage the development of deep processed products which have resource advantages in China and may be exported in batches, such as tungsten, tin, stibium, nickel, magnesium, indium, tantalum, titanium and rear earth, etc., and should emphatically develop powder materials, alloy materials, deep processed products, and high purity metals, etc.. We should continue implementing the protective policies on mining tungsten, tin, stibium and ionic rear earth. We should control the total amount in rear earth development, and make greater efforts to develop deep processed rear earth products and new materials.

V.

Development of Non-Ferrous Metal Resources in Western Regions

We should exploit the alumytes in Guangxi and Guizhou provinces, and enlarge the production capacity of alumina; we should develop the construction of large copper mines in Xinjiang, Qinghai, Tibet, Yunnan and Sichuan provinces, and increase the effective supply; we should accelerate the construction of large lead and zinc mining in Yunnan, Gansu, Sichuan and Inner Mongolia, the reserves of which having been explored; we should strengthen the comprehensive utilization of metal resources in copper, nickel, cobalt and platinum families in Jinchuan; we should support the technical research and industrialization progress on the comprehensive utilization of lithium and magnesium resources in Qinghai and Yanhu of Tibet.

Recent Development Orientation for Petroleum and Petrochemical Industries

I.

Petroleum Industry

We should strengthen domestic petroleum exploration, increase reserves, maintain a stable output in eastern regions and a rapid development in western regions, and sea areas. We should simultaneously develop oil and gas, extend cooperation with foreign parties, and try to expand overseas oil and gas exploration development business.

(a)

Crude Oil Exploration

We should aim at seeking high quality and usable reserves, give prominence to the realization of increase in reserves and output in Ordos, Junggar, Songliao, Tarim and Jiuquan Basins. We should strengthen the rolling exploration and realize reserves increase and stable output in Bohai Bay and Tuha Basin, and actively help Qaidam Basin prepare for the realization of a new breakthrough. We should, through improving injection-production well network, strengthen such measures as tertiary oil recovery, etc., maintain the stable output of old oil fields or decrease the degression speed of the output; and meanwhile do well in the transformation of the ground gathering and transportation systems restricting oil and gas energy generation, with outmoded and high consumption process technology and major hidden trouble in safety. We should actively implement the strategy of "walking out", and carry out risk exploration andcooperative development in foreign countries.

(b)

Natural Gas Exploration

We should, on the premise of meeting the lowest resource demands in the West-East natural gas transmission project, and by focusing on the palaeoid of Ordos Basin, the areas around the three lakes in Qaidam Basin, Kuche area in Tarim Basin, the eastern and western part of Sichuan Basin and the hollow in east sea and west lake, deeply appraise the scale of Sichuan Basin reserves so as to meet the market demands in the areas around the two lakes, and extend the scope of pre-exploration, and find reserves under control of scale, as well as try to have new major discoveries.

(c)

Production of Crude Oil

We should implement the strategic adjustment in crude oil output and composition, do well in the adjustments and exploitation of oil fields in eastern regions, and try to decrease the output degression; we should accelerate the increase in reserves and output of western regions and sea oil fields, and try to make up for the output degression of old oil fields.

(d)

Production of Natural Gas

We should, in light of the situation of downstream market and the pipeline construction progress, make great efforts to strengthen the pre-stage appraisal of gas field development, scientifically arrange the plans on energy production construction, avoid energy overstock and occupation of funds, and improve the integral benefits of natural gas development.

(e)

Construction of Crude oil and Natural Gas Pipelines and Gas Fueling Stations.

We should accelerate the construction of crude oil pipelines, adjust the transmission distribution and transmission methods, optimize the resource allocation, and reduce the costs of crude oil transport; we should guarantee that the construction of West-East natural gas transmission and natural gas pipelines in Zhongxian, Wuhan can be started and completed on time, and that they can be operated on time; meanwhile, we should carry out safety transformation with old pipelines, and settle the bottleneck problem in pipeline transport, so as to guarantee the normal production of oil and gas fields; we should transform and construct gas fueling stations and civil pipes and networks, etc. to realize "secondary value increase" of natural gas.

(f)

Technical Development Key Points

(1)

Oil and gas exploration: we should set up a system for rapid appraisal and decision on oil and gas exploration, and a system on research and appraisal of hydrocarbon generation mechanism of marine carbonate rock, deep oil and gas resource formation mechanism with the dynamic simulation technology containing an oil and gas system as the principal line; we should research on and develop technologies of drilling complicated structural wells, multi-branch horizontal wells and large displacement wells suitable for complicated geologic conditions; we should research on the technologies of imaging logging and nuclear magnetic resonance logging.

(2)

Oil and gas fields development: we should give priority to the development of post-stage wet oil pool description of water injection oil fields, monitor of remained oil, auxiliary technology for stabilizing oil and controlling water, polymer-driven industrialization applied technology, low-penetration oil pool, thickened oil pool, technology for increasing the recovery ratio of condensate gas pool.

(3)

Oil and gas storage and transmission: we should carry out the research on the technology of gathering and transportation of oil and gas in cold areas, and on natural gas high efficiency equipment for de-gritting, the research on pipeline risk management and pipeline system reliability technologies, as well as the research on underground gas storeroom design and building technologies.

(4)

Improvement of a group of technologies at an advanced level: we should improve the high-precision geophysical technology series with the mountain region, loess and deep-seated seismic prospecting as the principal line; improve complete three-dimensional or four-dimensional earthquake technology and oil pool dynamic economic appraisal technology; improve the marine platform design technology; improve the seabed pipeline structure design, laying and leakage monitoring technology; improve the underwater automatic production technology; improve the marine environment survey and forecasting technology; improve the auxiliary technology of wet oil field energy-saving consumption reduction system; improve the auxiliary technology of oil and gas water treatment process by tertiary oil recovery; and improve the auxiliary technology of complex oil field ground simplification process.

II.

Petrochemical Industry

(a)

Petroleum Refining and Sale

We should, according to the state's new standards on the quality of gasoline and diesel oil, highlight the structural adjustment of products, and give priority to the construction of secondary processing devices and oil refining auxiliary facilities which improve the quality of gasoline and diesel oil, including the transformation and construction of the reforming devices for increasing the gasoline octane value and reducing alkene and sulfur content in gasoline, the alkylation devices, methyl tert-butyl aether devices and hydrogenation devices; as well as the transformation and construction of the hydrogenation refining, hydrogenation cracking and delayed coking devices for increasing the cetane number in and oxidation stability of diesel oil and reducing the sulfur content, and increasing the proportion of gasoline to diesel oil. We should accelerate the transformation and construction of the installations for processing imported crude oil containing sulfur and the oil refining bases at the level of 10000 tons. We should emphatically set up the large oil refining bases of Zhenhai, Maoming, Guangzhou, Fujian, Jinshan, Gaoqiao, Jinling, Dalian, Lanzhou, etc.. We should develop the pipeline transmission of oil products, reduce the transmission costs, and improve the retail capacity of distributing oil products. We should, under the uniform planning of the state, set up the system of state petroleum reserves.

By January 1, 2003, the quality gasoline used in vehicles shall all reach the new national standard (GBl7930_1999), with the sulfur content within 0.08%, and the alkene within 35%.

The quality of light diesel oil shall all reach the new national standard (GB252-2000), with the sulfur content within 0.2%, the oxidation stability and general insoluable substance within 2,5 mg/100ml, and the cetane number within 45.

(b)

Ethylene and Synthetic Resin, Synthetic Rubber, Synthetic Fiber Materials

We should accelerate the transformation of the present ethylene and the construction of ethylene produced by joint ventures, coordinately transform polyalkene devices, adjust product structure, and raise the proportion of special synthetic resin materials, and raise the self-supply ratio of terpolymer composed of phenethylene, propylene and nitrile butadiene phenethylene; we should develop the material paraxylene auxiliary to synthetic fiber, extractive terephthalic acid and polyester, etc.. We should complete the technical renovation of the present ethylene devices. We should, in combination with the ethylene transformation and construction of joint venture ethylene project, transform and build large equipment for producing synthetic resin, synthetic rubber and synthetic fiber materials.

(c)

Technical Development Key Points

(1)

Oil Refining Technologies

Clean fuel production technologies: we should develop the catalyst which reduces the content of catalytic gasoline alkene and the technologies of catalytic gasoline selective hydrogenation desulfuration, catalytic light gasoline etherification, solid acid alkylation; we should produce catalysts for diesel oil with low-sulfur, low-arene, high-cetane number, gasoline detergent and diesel oil additive, etc..

Sulfur containing crude oil processing and technologies for increasing the production of diesel oil: we should develop such technologies as enlarging the ordinary decompression distillation device for sulfur containing crude oil, distillate hydrogenation refining and single-section hydrogenation cracking, medium pressure hydrogenation cracking, sulfur containing residual oil hydrogenation, and large sulfur recycle, etc..

Heavy oil deep processing technology: we should develop such technologies as treatment of inferior catalytic materials hydrogenation, ultra-short contact catalytic cracking, new delayed coking and the new generation of heavy oil catalytic cracking and heavy oil hydrogenation catalyst, compound process of residual oil processing, etc..

Production procedure optimization technology: we should, within the coming 2-3 years, complete the construction of enterprise resource plan system (ERP) structure, and gradually form the information integrated system supporting the decision-making group, the profit making group and the production cost control group, which could automatically deal with such information of the whole enterprise as management of finance, materials and equipment, production plans, sales and distributing activities, etc., and could provide the electronic commerce platform.

We should develop high-grade lubricating oil and high-grade bitumen production technology, and the technology of producing catalysts, additives and assistants auxiliary to oil refining.

(2)

Ethylene and Synthetic Resin Technology

We should develop advanced separation technologies, such as high efficiency energy-saving segregation and separation technology, catalytic rectification hydrogenation technology, mixed cryogen refrigerating technology; ultra- condensation gas-phase polyethylene, complete technology for localization of ring canal bulk polypropylene; such auxiliary technologies as copolymerization monomer, catalyst etc.; plastic recycle and re-utilization technologies; new synthetic resin products, as well as cracking furnaces of large capacity, high selectivity, high thermal efficiency and long operational period.

Recent Development Orientation for Chemical Industry

I.

Agrichemical Products

(a)

Nitrogenous Fertilizer Industry

We should continue doing well in the materials route transformation of large and medium nitrogenous fertilizer devices with fuel oil as the material by using cheap coal and advanced gasification technology, and settle the problem of materials localization of medium and small nitrogenous fertilizer with anthracite lump coal as the material. We should use pulverized coal gasification technology to make technical renovations in the enterprises presently using anthracite lump coal as the material. We should, when digesting, absorbing and localizing the introduced pulverized coal gasification technology, focus on the application of such localization technologies suitable for China's medium and small nitrogenous fertilizer transformation as pulverized coal gasification, polysulfuration bed gasification, etc..

We should, by adopting energy-saving decarbonization process, variable process, synthetic tower, hydrogen recycle process, and urea energy-saving process technologies, carry out technology upgrading for the present medium and small nitrogenous fertilizer synthetic ammonia and urea devices, reduce the consumption of energy, and appropriately increase the output. We should, by aiming at increasing 35%-65% of output, carry out energy-saving technical renovations for the large nitrogenous fertilizer enterprises with the necessary conditions and using natural gas as the material so as to enable them to approach the international scale, and improve the competitive power of their products. With respect to the medium nitrogenous fertilizer plants, the transformation of using natural gas or coal as the material should be carried out; and so should the transformation of increasing 50% of output for the enterprises with the necessary conditions. With respect to the small nitrogenous fertilizers, we should accelerate the structural adjustment of the material routes and products, actively extend and use the advanced reliable technologies such as producing gas with formed coal, etc., save energy, reduce the production costs, and promote the small nitrogenous fertilizer enterprises to transform towards fertilizer secondary processing and agriculture chemical services.

We should change the present situation of the nitrogenous fertilizer enterprises in China, that is, single variety structure, low output of compound fertilizer materials, and few varieties, and should, in combination with the requirements of agriculture chemical services, appropriately develop nitryl and other compound fertilizer, so as to increase the comprehensive economic benefits.

As to the medium and small nitrogenous fertilizer enterprises with the necessary conditions, we should extend the cogeneration technology, adopt new-style re-circulating fluidized beds, and burn the gas making slag, so as to realize the comprehensive utilization of energy sources and reduce the production costs.

(b)

Compound Phosphate Fertilizer

We should support the regions with rich phosphor, sulfur or nitrogen resources, and on the basis of the present enterprises, construct at a high starting point some large compound phosphate fertilizer bases.

We should support some medium and small compound phosphate fertilizer enterprises, which may meet the regional market demands, have basically fulfilled the material conditions, have achieved good economic benefits, and may produce equivalent products to the international products after the transformation, and enable them to carry out technical renovations. We should make greater efforts to support the phosphor mine enterprises with the necessary conditions, and increase the input into the phosphor mine enterprises for their technical renovations on output increase.

We should emphatically support a group of well-managed, high concentration compound phosphate fertilizer enterprises with technical and resource advantages.

(c)

Pesticides

We should develop the substitutable products and new-style drug form of high-poison pesticides, and assist the original enterprises to transform their production. In 2003, the output of high-poison pesticides shall be reduced from 30% of the present total output to 15%, and in 2005, it shall be reduced to 5% or less. The output of outmoded drug form of pesticides is 75% of the total amount, which shall be reduced to 60% in 2003, and 50% or less in 2005.

We should support the major backbone enterprises and enable them to carry out the comprehensive transformation aiming at raising the technical equipment level, developing economy of scale and improving the research ability, so that a group of backbone pesticide production enterprises with international competitive power may be formed as soon as possible.

II.

New Type of Materials in Chemical Industry

(a)

Organic Silicon

We should support the organic silicon production enterprises with the necessary technical basis and production scale to make use of their technical renovations in new technologies, to further reduce their production costs, enlarge their production scale and strengthen their comprehensive utilization and post-processing application.

We should support the enterprises with the necessary conditions to build new large advanced organic silicon production devices by such means as joint venture or cooperation, etc..

(b)

Organic Fluorine

We should develop polymers containing fluorine: fluorine rubber, fluorinated ethylene-propylene copolymer, kynar and high grade teflon. According to the "National Proposal on Eliminating the Substance Destroying Ozonosphere", China is in urgent need of stressing the development of HFC-134a and HFC-227, and the high-purity hydrofluoric acid, etc. auxiliary to electronic industry.

(c)

Nanometer Materials

We should make great efforts to promote the application of ultra-gravity technology in the area of nanometer material preparation, and should, when continuing improving the industrialized production of nanometer calcium carbonate, accelerate the application of ultra-gravity technology in such products as nanometer aluminum hydroxide, nanometer magnesium hydroxide, nanometer silica, nanometer barium carbonate, etc., so as to enable China to become a large and strong country in the world for producing these products.

We should strengthen the application and development of nanometer materials, enlarge the application areas and application level of domestic nanometer materials.

(d)

Other New Chemical Materials

We should accelerate the development of polyformaldehyde and polyterephthalic acid 1,4_butanediol ester, such products with domestic technical breakthrough as polyphenyl sulfide, polyether sulphone, polyether ketone and polyimide, etc. in the area of special engineering plastic, and the new-style environmental protection products which is a substitute for the traditional anionics such as polyaspartic acid, low formaldehyde emission urea-formaldehyde glue which meets the requirements in environmental protection and other similar products as well.

III.

Fine Chemical Industry

Feed additives: we should develop methionine, lysine, vitamin D3, vitamin H, calcium pantothenate, forage enzyme and antibiotics substitutes, etc..

Food additives: we should develop soybean protein, soybean isoflavone, propionate, fatty acid polyglycerol esters, lecithin, tea polyphenols, amino acid, natural pigment, ¦Â-carotene, kojic acid and nucleic acid products.

Papermaking chemical products: we should develop slackline and denatured starch products, and also develop various chemical products needed in waste paper recycle and utilization.

Oil field chemical products: we should develop chemical products in respect of high-grade drilling mud and cement additives, develop polypropylene amides used in oil fields, and meanwhile develop the chemical assistants needed in waste water treatment in oil fields.

Synthetic adhesives: we should develop environmental protection adhesive products, such as hot melt adhesives with low emission of formaldehyde, and adhesives needed in the large markets of construction, of automobiles and of shoemaking.

Industrial surface active agents: we should transform and improve the present equipment, give full scope to the potential production capacity, strengthen the development of built application technologies, and strengthen the application of technical services.

Biochemical industry: we should strengthen the industrial development and application of biological reactors, biological sensors and post-extraction technologies, and make polypropylene amides by biological process, L- lactic acid, microorganism amylose, hyaluronic acid and enzyme preparation, etc. so as to form the production of scale and become major products.

Dyestuff: we should develop new-style environmental protection dyestuff; increase the dyestuff and organic pigment merchandised processing technologies, increase the additional value of products, and develop various nitrogen heterocyclic compounds and mid-bodies.

Coating materials: we should develop various environmental protecting coating materials (of water nature, high solid, in the form of powder, radioactive solidification); develop construction coating materials for internal and external walls; substitute titanium residues for titanium iron mines to change the route of producing white titanium powder materials with sulphuric acid; we should actively promote the development of white titanium powder production by chlorination.

IV.

Meridian Line Tyres

We should accelerate the product structural adjustment of tyre enterprises, and continue developing meridian line tyres. We should accelerate the development of new varieties, and emphatically develop the 65, 60, 55 and 50 series with the rim diameter at 15-17 inches, and meridian tyres of high-speed serial saloon cars and high-capacity meridian tyres of low section without inner tyres; we should enhance the technical renovations of a few major enterprises, and form 2 to 3 large tyre enterprise groups with the annual production capacity reaching 5 to 8 million (with the annual consumption of raw rubber at 40,000 tons or more). We should appropriately support the backbone tyre enterprises in central and western regions, so as to enable the regional distribution of meridian tyre production to become more reasonable.

Recent Development Orientation for Medicine Industry

I.

Advantageous Raw Material Medicine

We should realize the industrialization of the medicine that has independent intellectual property in China and is firstly developed in China.

We should emphatically develop the medicine for first-aid treatment, cardiovascular medicine, medicine for diabetes, anti-tumour medicine, anti-virus medicine and medicine able to improve the immune function of the body, which are needed for clinical purpose but have particular curative effects.

We should produce 7-aminocephalosporanic acids by enzymolysis, produce 7-amino-3-aminodesacetoxycephalosporanic acids by fermentation method, produce vitamin C by "one-step fermentation method", so as to transform and upgrade such traditional exported advantageous varieties as the present antibiotics and vitamins, etc..

We should promote the application of such hi-techs as gene engineering technology, cell engineering technology, fermentation engineering technology, enzyme engineering technology and separation, extraction, crystallization and chiral synthetic technique in modern pharmaceutical industry in the production of medical products, further optimize the process, and improve the product quality and increase the technical and economic targets.

We should realize the artificial synthetic technique and industrialization of such natural medicine as ephedrine, etc..

We should promote the construction of Zhejiang Southeast Chemical Raw Material Medicine Exporting Base as well as the technical renovations of the old medicine industrial bases in Shijiazhuang, Shenyang, Zibo and Harbin, etc..

II.

Biological Technology Area

We should realize the industrialization of biological engineering medicines with independent intellectual property in China.

We should accelerate the application of biological engineering technologies in such respects as vitamin, antibiotics, and amino acid, etc..

We should accelerate planning the GMP (quality management criteria of medicine production) transformation of immune products, such as DTP, epidemic encephalitis B vaccine, and measles vaccine, etc..

We should develop new type of vaccines with a good market prospect, such as flu virus vaccine applicable to the whole people, polyvalent pneumotoxin polysaccharide vaccine, wheel-shaped virus vaccine, dysentery vaccine, tumour vaccine and AIDS vaccine, etc..

We should accelerate the development of diagnostic biological chips.

III.

Modernization of Chinese Herbal Medicine

We should support the regularized and standardized planting of Chinese herbal medicine materials.

We should realize the industrialization of Chinese herbal medicine extracts and the concentrated granules of Chinese herbal medicine slices.

We should extend the application of fingerprint atlas and other multi-component quantitative target control technologies in the production of Chinese herbal medicine.

We should promote the application of modern advanced technologies in Chinese herbal medicine production, such as supercritical carbon dioxide extraction, dynamic extraction, macroporous resin, film technology, spray drying, freeze drying, and ultramicro smashing technologies.

We should promote the application of advanced preparation technologies and auxiliary materials in Chinese herbal medicine production.

We should develop new types of convenient Chinese herbal medicine with high efficiency, rapid and long effect, small dose and poison, and few side effects.

We should accelerate the technical innovations and technical transformation of famous and high-quality products.

IV.

New Type of Preparation

New products and famous products with a good market prospect.

Products which cannot be produced in China and need to be imported.

Slow-release, controlled release, and rapid release preparation, target preparation, quantitative inhalant, nasal preparation, membrane agent and other new drug forms.

New types of high-quality pharmaceutical adjuncts, such as new type of adhesive, disintergration preparation, coat materials, solutizers and surface active agents, etc..

Such advanced technologies as microcapsule technology, clathrate compound technology, penetration pump technology, liposome technology, etc. in the preparation.

The pharmaceutical equipment which could meet the requirements in respect of diversification of varieties, serialized specifications, closed operation, electromachinery and GMP, such as ultramicro smashing equipment, dynamic extraction equipment and new-style biological reactor, etc..

Recent Development Orientation for Coal Industry

I.

Coal Mining

We should accelerate the construction of large and medium collieries, and complete the construction of a group of modernized collieries; we should construct a group of large and medium collieries in compliance with the coal development distribution principle of simultaneously constructing coal electricity in western regions, adjusting the national balance of supply and demands in the regions of Shanxi, Shaanxi and the western part of Inner Mongolia, and stabilizing the production scale in eastern regions; we should carry out the technical renovations on the present large and medium collieries, and realize the modernization of coal production and management; we should carry out the concentrative transformation in the lawful small collieries, reduce the number of production mines, enlarge the single-well production scale, improve coal mining methods and recovery process, improve technical equipment conditions, raise the mine recycle efficiency, and promote safe production; we should encourage the large and medium coal enterprises to transform some lawful small collieries with reliable resources into modernized mines by making use of their assets; we should support the large and medium coal enterprises and enable them to implement the upgrading and transformation of safety facilities and equipment in respect of collieries ventilation, gas control, dust prevention, fire prevention and extinguishments as well as prevention and control of water, etc., and to equip auxiliary safety information management systems.

II.

Coal Processing and Utilization

(a)

Coal Washing and Selecting

We should use the advanced technologies and equipment to transform the present productive technology for selecting coal, improve the equipment reliability, extent of automation and process flexibility, increase the product varieties, improve product quality, and give full scope to the production capacity of coal plants, and better meet the demands in market; we should, when constructing a group of advanced coal preparation plants in the main coal-producing provinces (regions), construct group coal preparation plants in the regions with concentrative medium and small collieries, so as to improve the proportion of selected raw coal and the quality of commercial coal.

(b)

Dynamic Coal Blending

We should support the construction of coal blending plants in coal transfer ports and distributing centers; we should support the present coal blending plants and enable them to enlarge their construction and their technical renovations; we should support the construction of auxiliary coal blending plants in the coal preparation plants with the necessary conditions, especially in the coal preparation plants with high sulfur even after coal washing.

(c)

Substituting Water Coal Fluid for Oil

We should encourage the regions where fuel oil is consumed in a large amount to build projects of substituting water coal fluid for oil, and support the construction of auxiliary transmission facilities in water coal fluid plants; we should support the development of key technologies and equipment in large production and application of water coal fluids.

(d)

Development and Utilization of Coal-bed Gas

We should select the advantageous regions from Shanxi Qinshui Coal Field, Hedong Coal Field, Lianghuai Coal Field in Anhui Province, Middle Liaoning (including Tiefa, Fuxin, Fushun and Hongyang Mining Areas) and Liupanshui region in Guizhou, etc. to construct demonstration projects of coal-bed gas development utilization.

III.

Concentrative Development of Coal Enterprises

We should support the large coal enterprises and enable them to build up large enterprise groups by merger or asset restructuring; we should support the large coal enterprises and enable them to carry out large and medium mine construction, technical renovation projects and trans-regional and transnational opening of collieries; we should encourage the large coal enterprises to carry out technical renovations on small collieries by merger, purchase, or association, etc., so as to increase the production scale of small collieries and raise their technical equipment level; we should support the large coal enterprises and enable them to carry out the construction of projects in respect of coal electricity, coal coking, coal chemical industry and coal building materials; we should support and guide enterprises in the field of coal, electricity, road, port and transportation, through joint restructuring, into particular large enterprise groups.

IV.

Joint Operation Integrated with Coal and Electricity

We should support the establishment of coal electricity companies, carry out uniform development and construction of collieries and power plants near coal mines, and construct large thermal power bases in areas with rich coal resource; we should support coal enterprises to realize operation integrated with coal and electricity through asset restructuring with electric power enterprises.

Recent Development Orientation for Building Materials Industry

I.

New Type of Dry Cement and Cement in Bulk

We should, with the enterprise technical renovation as the basic avenue, develop new type of dry predissociation kiln cement production lines with the output of 2000 tons of chamotte per day or of larger scale, encourage the enterprises to develop new type of dry cement production lines with the output at 4000 tons or more per day; we should construct large chamotte bases in the regions with rich limestone resource, and develop large modernized cement milling stations around the market; we should develop stations for mixing cement in bulk and commodity concrete.

II.

New Type of Materials for Wall

We should develop the concrete brick production lines with the single output at 50,000 cubic meters or more per year, and extend fixed shaping and chamber maintenance process; we should develop scale aero-concrete brick production line with the annual output at 100-200 thousand cubic meters, extend foam shaping technology and large mechanical cutters; we should use tunnel kilns to extend new techniques for heavily doped pulverized coal ash and complete coal gangue sintered air bricks, and develop the production line with the scale of 15 million or more of sintered products per year, among which the single line annual production capacity of such waste residue sintered products as the coal gangues, pulverized coal ash, shale, etc. is 30 million pieces or more; we should develop light bearing boards and light boards combined with decoration as well as compound boards, and light board production line with the annual output at 150 thousand square meters or more, and should also develop the new technologies and new techniques using crop straws as the main materials for production of environmental protection light boards.

III.

Inorganic Non-metal New Materials

We should develop large direct melting production line with the annual output at 30 thousand tons or more, and use such techniques as 4000-hole high efficiency fiber shaping technique, 1600-hole quartered puling technique, direct wet process, dry chopped strand, etc. to raise the equipment level and improve product quality, as well as increase the varieties.

We should develop the technology of producing non-woven glass fiber products in large breadth and large scale, and achieve a major breakthrough in such application fields as transport, electron, source of energy and construction, etc.; we should develop biological and medical fiberglass filter materials, industrial filter materials and their products, so as to meet the increasing market demands in biological purification and industrial dust elimination; we should develop various good -performance and multifunctional fiberglass products, including high quality and enhancement mode fiberglass yarn, felt and substitution products for asbestos, so as to meet the needs of automobiles and urban light rail means of transportation for various compound materials; we should develop various glass fiber fabrics including geotechnical fabrics (geotechnical grids, geotechnical cloth, etc.) to provide the permanent construction of sand control and earth fixing, high-speed highways, bridges, wharfs, etc. with high quality compound materials; we should develop fiberglass materials which can replace reinforcing steel bars and resist the corrasion of seawater and slat-containing moist air; we should develop multi-axis woven fabrics for naval vessel manufacture and wind generation blade production. The development of architectural industry also has an increasing demand in fiberglass, such as water-proof room glass fiber materials, glass fiber fabrics (net cloth and wall cloth) for wall, single yarn coating glass fiber window screening, etc..

We should encourage the enterprises to use glass fiber reinforced plastics mechanized shaping technique to carry out production of scale, and make the integral technical level approach or reach the international advanced level of mid 1990s; we should make great efforts to develop fiberglass reinforcing materials, emphatically develop FRTP, and actively develop such products as molding building boards made of glass fiber reinforced plastics, pultrusion doors and windows, high-pressure pipelines, sand inclusion pipelines, containers made of glass fiber reinforced plastics and high-pressure gas bottles, etc.; we should develop high quality artificial diamond synthetized with anvil-cylinder apparatus, special phototransistors, special glass and good-performance new pottery materials, so as to improve the product quality and promote the industrialized development.

IV.

Non-metal Mines and their Deep Processing

We should encourage the construction of large mineral product processing bases at a high starting level, develop high quality deep processed products of non-metal mines, and participate in the competition in the international market; we should develop superfine smashing, fine purification and surface modification technologies, and develop high-purity, micropowder and low-sulfur expandable graphites, graphite lubricants, graphitic absorption materials, and develop such mineral functional stuffing products as speckstones, calcium carbonates, kaolins, etc., and clay mineral environmental protection material products and non-metal mineral nanometer materials.

Recent Development Orientation for Light Industry

I.

Pulping and Papermaking

We should, by focusing on the structural adjustment of papermaking materials, increase the proportion of wood fiber materials to waste paper, and set up a production system with wood as the main fiber in respect of the structure of papermaking materials.

We should make great efforts to develop forest zone bases for artificial fast-growing papermaking industry, use modern technologies to transform traditional forestry, select and cultivate fast-growing, fertile, short-period, resistive improved wood varieties with high-yield of wood pulp, high natural whiteness and proper fiber length. We should, in combination with returning farmland to forests, accelerate the construction integrated with forestry and paper, and improve the production efficiency in woodlands.

We should, by using high-yield pulping technique, develop TMP, CMP, CTMP and APMP, etc. in a large scale.

We should, on the basis of adjusting the present structure of wood resource consumption, support and lead the present wood pulp enterprises to the restriction of the export of domestic wood pieces by transforming and increasing the uses of wood pieces, and sufficiently make use of the forest zones to cut and process the remains, tend and cut secondary and small firewood as well as medium and young growth, so as to enlarge the wood pulp production.

We should develop and utilize the waste paper resources by using foreign advanced pulping, screening, purifying, deslagging, washing, concentrating, heat dispersing, rubbing, flotation, void and bleaching techniques and equipment.

II.

Processing of Agricultural Products

We should, through the structural adjustment of agricultural product processing industry, accelerate the progress of agricultural industrialization. We should, putting the backbone foodstuff enterprises at the leading position, apply hi-techs and modern biological technologies, and on the basis of introducing, selecting and extending good varieties, deepening and widening the processing of large quantities of grain crops such as soybeans, maize, potatoes, wheat and cereals, and should improve the additional value of such products and raise the level of comprehensive utilization.

We should develop such new soybean foodstuff as soy milk, soy milk powder, separated protein, concentrated protein, organized protein, etc.; and accelerate the industrialization progress of traditional soybean foodstuff.

We should make great efforts to extend the technique of producing maize powder by maize dry de-germinating, and use the powder as the materials for producing starch sugar and fermented products; we should actively use maize de-germinating technique to develop maize oil serial products. We should emphatically support the production enterprises with an annual maize processing scale of 300,000 tons or more and enable them to carry out comprehensive utilization and reduce their production costs.

We should develop potato starch, special starch and denaturalized starch, and develop complete potato powder and various potato foodstuffs.

We should develop flour of multi varieties such as bread flour, all purpose flour, cake flour, and also special traditional foodstuff flour, and should strengthen the comprehensive utilization of wheat.

We should extend the rice processing techniques, develop new products processed from refined rice, develop the production of clean rice and nutrient-enriched rice, and enlarge the export of high quality rice. We should reasonably utilize rice bran resources, and develop new techniques for comprehensive utilization of rice bran oil and rice bran.

We should make greater efforts to adjust the structure of major sugar producing areas, promote the scale production of the sugar plants, and raise the level of comprehensive utilization.

We should develop high-nutrition, low-fat, non-harm and environmental protection meat, aquatic products, fruits, vegetables, dairy products and other green foodstuffs and drinks.

We should develop the techniques for processing, storing and transmitting agricultural products, and should strengthen the construction of facilities in respect of foodstuff safety and quality standard testing and inspection.

III.

Light Industrial Machinery

We should focus on the functions of pulping and paper manufacturing, plastic and foodstuff packing machinery, and in combination with the introduction of key technical equipment, raise the equipment's level of integration with light, machinery and electricity, and promote the automation of production process by depending on technical innovations.

Pulping and papermaking machinery: we should develop the complete chemical pulp and CMP equipment suitable for the scale with such fast-growing woods as poplar, birch, eucalyptus, etc. as the materials, the complete energy-saving equipment for rapid replacement and intermittent cooking; we should develop the waste paper treatment equipment (the non-void waste paper treatment system with the daily treatment capacity at 400 tons and the void waste paper treatment system with the daily treatment capacity at 250 tons) suitable for the scale with waste box paper, waste newsprint paper, waste magazine paper as materials; we should, for the sake of meeting the requirement of developing paper machines towards large, high-speed, wide, low-consumption and automatic ones, develop the medium and high-speed paper machines and paper plate machines with the breadth at about 5.5 meters and with the vehicle speed at 800-1200 meters per minute, and raise the localization level of the corresponding auxiliary pulp supply and beating systems and white water recycle equipment, coating machine, rewinding machine, soft press polish equipment, and controllable medium-high rollers, etc..

Foodstuff and packing machinery: we should develop the machines for processing large quantities of agricultural by-products, such as maize fuel alcohol processing equipment and starch production equipment with the annual output at 100,000 tons and its attachments (including separation machinery), etc.; we should develop aseptic cold filling technique, aseptic filling production lines (bottles, cans), aseptic soft package production lines and auxiliary aseptic systematic projects, high polymer materials technique integrated with bottle-making and filling, and large mechanical automatic production lines for packing dairy products, etc.; we should develop the manufacture of one-off green environmental protection tablewares and kitchenwares, including additive production, equipment manufacture, product production to replace expandable polyphenethylene plastic foaming tablewares and kitchenwares; we should develop full-automatic continuous honeycomb compound plate production technology and equipment, and medium and high-speed corrugated paper plate production equipment as well.

Plastic machinery: we should develop the new equipment for applied plastic processing in agricultural, packing, building materials, and automobile industry, develop and manufacture controllable functional shed membrane, new-style water-saving irrigation apparatus and machinery, new type of heat-resistant tubes, compound tubes, special shape materials and structural foaming material mechanical equipment; we should develop the techniques and equipment for rigorous blocking containers, packing materials, multifunctional thin membranes, water soluble thin membranes and degradable materials; we should develop gas auxiliary injection shaping technique, hot runner technique and plastic product recycle and regenerative utilization techniques.

Recent Development Orientation for Textile Industry

I.

Chemical Fibers and Chemical Fiber Materials

We should make greater efforts to transform the present advantageous enterprises, raise the production and centralization level, so as to form some large bases of chemical fibers and chemical fiber materials. We should promote the localization of complete set of precise terephthalic acid or mixed terephthalic acid (or medium purity terephthalic acid) devices, further raise the level of localized polyester devices, and develop high-capacity melt direct spinning technique, complete technical equipment for 50,000 tons or more of terylene short fibers, fine denier terylene filament melt direct spinning equipment, and should reduce the investment costs, so as to form the coordinative development of materials, polymerization and spinning.

We should raise the differential rate, and develop the highly simulated fibers, fine denier and superfine denier fibers, functional fibers and compound fibers, etc., which mainly include: fine denier and superfine denier fibers, fibers of abnormal fineness, abnormal section, abnormal materials or abnormal shrink, and multifunctional filament fiber blends and sea-island composite fibers with terylene filaments as the main body; develop fibers with such functions as antistatic function, high absorption of moisture, pilling resistance, fire resistance, etc.; develop koplon, high curling and hollow viscose staple fibers as well as fine denier, special shaped and multifunctional (fire resistance, antibiotic or else) viscose filament yarns, etc..

We should expand the area of using chemical fibers, and coordinately develop various hi-tech and good-performance fibers for the relevant industries, such as polyphenyl PBO fibers, aromide fibers, carbon fibers, ultrastrength and high-modulus polyethylene fibers, etc.; we should accelerate the research and development to industrialize such fibers and put them under market operation, so as to meet the needs in the development of industrial textile products as soon as possible.

We should develop and extend the new chemical fiber varieties and new techniques, such as polyterephthalic acid propylene glycol esters, melt polyammonia ester flexible fibers, polynaphthalene dioctyl phthalate glycol ester fibers, polylactic acid fibers, solvent cellulose fibers, ethylic acid filaments, soybean protein fibers, crust fibers and other new type of fibers.

We should promote the extended application of environmental protection technology, and strengthen the improvement of environmental protection. We should ensure the implementation of the environmental protection measures in respect of "disposal of waste viscose gas, liquid and residues" and "disposal of black serous fluids", etc., and encourage the application of new techniques and technologies of clean textile production.

II.

Cotton Textiles

We should, as required by the export of clothing, and around the development of plus materials, do well in the integral combination of the upstream and downstream industrial chains, so as to form the coordinate transformation of textiles and clothing. We should continue eliminating the outmoded production capacity, and accelerate the technical renovations. We should develop cleaning and combing machines, automatic bobbin winders and shuttleless looms. The enterprises with good conditions may, by automatic winder technique allocation, carry out planned development of such new spinning technologies as close spinning, air-jet spinning, revolving cup spinning, etc.. We should develop various blending plus materials of different fiber mixture proportion, interwoven plus materials, jacquard plus materials, etc., and reasonably allocate such devices as high-speed electronic multi-arm and high-speed electronic jacquards.

III.

High-Grade Plus Materials

We should use new type of post-dyeing neatening technology and equipment to develop wrinkle-resistant and non-ironing natural fiber plus materials, pure cotton supersoft plus materials, high count, light and thin wool spinning plus materials, high-grade ramee and flax plus materials, high-grade silk plus materials, comfortable knitted plus materials, etc.. We should research on the techniques and technical equipment for neatening and processing post-dyeing synthetic fibers, and develop different styles of chemical fiber plus materials, multi-fiber blending interwoven plus materials and high-grade knitted plus materials. We should make use of the supercritical carbon dioxide media dyeing technology, plasma technology, cotton fabric cold-rolled pile treatment and biological enzyme technology. We should realize clean production step by step, so as to make the dyeing process meet the requirements of green environmental protection. We should develop post-dyeing neatening technical equipment meeting the requirement of "small batches, multi-varieties, rapid delivery", such as computer color reading and matching, computer color separation and plate making, laser plate making, non-plate making printing, automatic measurement liquid supply system of dyestuffs, automatic temperature control system.

We should develop various decoration plus materials and functional neatened plus materials. We should mainly make use of the neatening technologies and equipment in respect of fire resistance, bacteriostat, antistatic, anti-pollution, ventilation, moisture, anti-ultraviolet, etc., and further expand the areas of uses of plus materials.

IV.

Clothing

We should raise the level of clothing designing and developing. We should promote the use of computer aided design system, make great efforts to train the designers, and create international famous brands. We should make use of such advanced clothing processing equipment and technologies as clothing plus materials automatic monitoring and appraisal system, automatic cutting machines, computer flush joint machines, clothing virtual figure systems, computer controlled multi-form suspensible transmission systems, stereo electric process-iron machines, product automatic stereo storage systems, product distributing centers, etc.. We should develop ecological and environmental protection clothing, and various functional clothes. We should develop clothing integrated automation systems, clothing structural digital systems, enterprise resource planning systems to raise the design, production, sale and management levels in the clothing industry.

V.

Industrial-Purpose Textile Products

We should develop non-woven cloth mainly by the spinning-binding method. We should develop tilt materials, waterproof building materials, framework materials, medical and hygiene materials, automobile internal decoration materials, membrane structural building materials. We should develop glass fiber fabric coated polytetrafluoroetyylene products; improve the quality of PVC products; further improve the post-neatening technology, and develop superfine fiber synthetic leather. We should develop agricultural textile products, especially thin non-woven cloth mainly by the spinning-binding method which can bear ultraviolet radiation, with the weight at 15-20 grams per square meter.

VI.

Textile Machinery

We should develop large, continuous and automatic complete equipment for manufacturing viscose rayon, acrylic fibers and terylene as well as the complete equipment for producing special fibers. We should develop a new generation of high efficiency and automatic cotton spinning complete equipment and electromechanical weaving equipment. We should develop a new generation of high-efficiency, short-procedure, environmental protection, energy-saving, highly precise and electromechanical pre-treatment, dyeing, neatening process technical equipment. We should develop large output, high-efficiency electromechanical tricot machines, weft machines, hosiery machines and other weaving machines, and raise the development level of general parts and basic parts of technical equipment in textile industry, as well as make a breakthrough of key parts and components, and key technologies.