Increased Supervision for Environmental Protection

About ten years ago, an importer of Northeast China was charged
with importing waste paper without any sterilization and primary
treatment, bringing some harmful insects into China. Judging
from that case, most people thought that the importer may have
committed commercial fraud or the importer was a traitor. People
in China hardly knew it was a money making business to help other
companies or organizations collect, bury and treat waste.
Recently, a similar spotlight scandal was reported by a UK
newspaper and discussed widely in the Internet before the
Chinese New Year (February 18). It was reported that United
Kingdom exporters sold more than 200 thousand tons of waste
plastics and 2 million tons of other wastes to China, making a
net profit of 460 million pounds. The importers in China also
made a huge profit from the business. Concerned government
departments immediately closed the trash receiving site in
Guangdong when the event appeared in the media. This event
reveals that people today pay more attention to the environment,
as does the government. Some government officials did, however,
continue to be blind. Media supervision is becoming more
important than ever before.
    Environmental protection storm continues to focus on newly
constructed projects. On February 13th, 12 projects were ordered
to close forever by the State Environmental Protection
Administration (SEPA). Two of them are of in the chemical
industry ?the third-phase vanillin expansion project of Jilin
Changbai Mountain Fine Chemicals Co., Ltd. and the 100 000 t/a
alkali salt mining and processing project of Tongbai Greenland
Trona Co., Ltd. that is located in Nanyang, Henan.
    In the environmental protection storm, the central
government strengthens controls on investment. From February
25th, the deposit-reserve fund ratio was increased by 0.5
percent points to 10%, signaling tighter credit. A source from
a bank estimates that the ratio will be increased to 11% this
year if fluid money remains in surplus, or the RMB/US$ exchange
rate will be changed.
    According to the latest statistics by the State-owned Assets
Supervision and Administration Commission (SASAC), the
petroleum and petrochemical enterprises managed by SASAC
completed a total investment of RMB395.58 billion in 2006,
exceeding the planned amount by 18.8%. An official from SASAC
comments the high growth rate of investment in the petroleum and
petrochemical industry was mainly driven by purchasing overseas
crude oil and natural gas business, and by exploring new oil/gas
resources, which is necessary for the future and is encouraged
by the government. Sinopec Group spent RMB44.85 billion in
purchasing overseas businesses including the POSA project in
Venezuela, the JDZ2 project in Nigeria and Atlantis of Tunisia.
CNPC spent more money in exploration and development.
    As compared with millions of companies, the number of
officials working in SEPA is thin. The supervision and
assistance from media and common citizens is becoming
increasingly important. Anyone, from abroad or at home, who is
keen on helping China to protect environment is welcome.
    After the long holiday (February 17-24), some bad news for
CCR subscribers is that the National Bureau of Statistics of
China will discontinue releasing the statistics on the output
of petroleum and chemical products as before. We regret sorry
the change terribly.


Zhong Weike
March 1st, 2007