Limitation or Push ?

A MOC official commented to the press July 11th that the growth
of exports is expected to slow down in the second half. The new
policy reducing the export rebate rate will start to show its
impact on exports. The cumulative trade surplus (exports
exceeding imports) climbed to US$112.5 billion, which is not
favorable for the Chinese government now. "China is encouraging
imports," he said.
    The National Bureau of Statistics of China recently
disclosed China's GDP for 2006 was found to be RMB21087.1 billion
after further refinement, representing a growth of 11.1%. It had
been reported as 10.7% in early 2007. The latest report shows
the GDP growth in the first half of 2007 is 11.5%.
   SEPA (the State Environmental Protection Administration)
announced eight regions that are required to stop any new
construction except environmental protection projects because
of serious pollution in these regions.
   'Limitation of clean production' is not only a pressure, but
also a pushing power for China's chemical industry, an analyst
remarked. With the rapidly growing economy in China, the
conflicts between environment and development are becoming
fiercer. Most chemical makers face more and more pressure from
environmental protection.
   "We place protection of the environment as the most vital
steps in the managing chain of our company," said the manager
of Zhongtai Chemical Company - a small chlor-alkali firm
publicly listed on the Shenzhen Stock Exchange. "Reducing
consumption, saving energy and cutting the emission of
pollutants will force chemical makers to upgrade technology,
further improving their competitive edge."
    Pan Yue, vice governor of SEPA, recently showed that the
investment market shall be 'green.' The green standard shall be
the benchmark for a firm to get funds from stock markets or get
loans from banks.
    The State Development and Reform Commission recently made
public a document ordering local governments to shut down
outdated and high pollution production units in four
manufacturing sectors - paper, alcohol, gourmet powder and
citric acid. In the papermaking sector production lines with a
capacity of less than 17 thousand t/a will be closed. In the
alcohol sector the government will shut down factories with
outdated processes and the units with a capacity of less than
30 thousand t/a. Gourmet powder production lines with a capacity
less than 30 thousand t/a are required to shut down. In the citric
acid production sector, the government ordered closure of all
companies that cannot meet environmental protection
requirements.
    Supported by brisk demand and skyrocketing stock prices,
most chemical firms posted good performance for the first half
of 2007. Such firms include Shanxi Sanwei Company, principally
a BDO producer.

   Zhong Weike
July 17th, 2007