NDRC Calls for Immediate Control on Heavy Energy-Consuming Industries

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Researched by Industrial Info Resources (Sugar Land, Texas). In order to prevent the blind development of heavy energy-consuming industries in some regions, The Urgent Notice on Quickening Industry Structure Adjustment and Controlling Blind Expansion of Heavy Energy-Consuming Industries was issued by the National Development and Reform Commission (NDRC) on May 25, 2007.

The Urgent Notice points out that the domestic energy supply, especially the contradiction between electric power supply and demand, has been alleviated since the beginning of 2007. However, heavy energy-consuming industries have been blindly expanding again in some regions. Some local governments even issued favorable policies encouraging the development of heavy energy-consuming industries and put heavy energy-consuming industries as the focal point in their invitation for business in breaching the stipulation of industry policies.

Due to the violation of some local governments and enterprises, production output has been increased more than 20% in the first quarter for most heavy energy-consuming industries. Among them, the output of crude steel increased 22.3%, iron alloy 44.4%, electrolytic aluminum 36.6%, coke 23.7%, and 34.1% for calcium carbide.

The tremendous investment growth for heavy energy-consuming industries has made it difficult to accomplish the country’s goal of energy-conservation and pollution reduction. Six tough measures are included in the Urgent Notice, which clearly point out that comprehensive measures combined with economic, legal means, even necessary administrative measures, will be applied to control the blind expansion of heavy energy-consuming industries without any hesitation.

The Urgent Notice also requires that related departments and enterprises at each level normalize investment actions on heavy energy-consuming industries strictly according to the Decision of the State Council Regarding the Reformation on Investment System. Strengthening project investment management according to related regulations and strictly controlling the construction of new heavy energy-consuming projects is also a goal of the Urgent Notice.

Various favorable policies encouraging the development of heavy energy-consuming industries issued in breaching of laws and regulations shall be banned. The local government shall not issue any favorable policies encouraging the development of heavy energy-consuming industries in breaching the state law, regulation and policy, and shall be abolished if any of those have been issued. Attracting business investment through various favorable policies such tax reduction or exemption without approval shall be strictly prohibited.

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