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China Rolls Out Refineries, Light Industry Plans

China has outlined plans for revitalizing and restructuring its light industries and often loss-making petroleum refining sector, in the government's latest effort to help create jobs and boost economic growth.

Chinese crowd a street as they wait for a visiting official in Xiangtan in China's central Hunan province Monday May 9, 2005. China on Thursday June 9, 2005, said it will expand aid to rural couples with only one child to promote family planning, but will not ease its three-decade-old one-child policy to limit population growth. China limits most couples to one child, but lets some poor couples have a second child if the first is a girl. (AP Photo/Greg Baker)
Greg Baker
Chinese crowd a street as they wait for a visiting official in Xiangtan in China's central Hunan province Monday May 9, 2005. China on Thursday June 9, 2005, said it will expand aid to rural couples with only one child to promote family planning, but will not ease its three-decade-old one-child policy to limit population growth. China limits most couples to one child, but lets some poor couples have a second child if the first is a girl. (AP Photo/Greg Baker)

The plans, issued by the State Council, or Cabinet, late Monday and posted on the government's Web site, are aimed at creating about 3 million jobs and helping manufacturers weather a sharp downturn in export demand amid the global financial crisis.

The measures are typical of the Communist leadership's penchant for grand, multiyear economic plans.

However, the government gave no specific dollar amount for the programs and it was unclear whether or not some costs are included in a 4 trillion yuan ($586 billion) economic stimulus package announced late last year, which focused on construction projects.

The outline for the refining sector calls for raising crude oil processing capacity by about 18 percent from last year to 405 million tons a year by 2011.

By then, China plans to build three or four major refineries in the Yangtze River Delta, near Shanghai, and the Pearl River Delta, near Hong Kong in southern China, the notice by the State Council said.

Each plant would be able to process 20 million tons of crude oil per year, it said. Meanwhile, existing refineries will be upgraded to become less polluting, with energy efficiency to be improved and discharges of waste water and sulfur dioxide to fall by more than 6 percent.

Chinese refineries processed more than 342 million tons of crude oil in 2008, while much of the country faced chronic shortages of diesel and gasoline, particularly before growth slowed late in the year.

Soaring global crude oil prices left major refiners with massive losses due to price controls that prevented oil companies from passing on higher costs for oil imports to end users.

The government's plans for the light industrial sector, also issued on its Web site, also did not include any financial details.

They call for upgrading technology and providing more support for small- and medium-sized businesses that dominate the sector but suffer from a lack of access to back loans and other financing.

Light industries such as home appliance, apparel, shoe, furniture and plastics products makers employ some 35 million people and once dominated China's export sector.

But thousands of such factories have closed amid the global downturn and many of those remaining need upgrading and improved environmental protection.

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"At the same time that our light industry has grown very quickly, some long-term, acute contradictions and problems have emerged," the plan said.

The plans mandate a nearly 30 percent reduction in waste water discharge and the elimination of excess production capacity for various industries, including 30 million units of low-efficiency refrigerators and 600 million units of incandescent light bulbs.

Although China is keen to shift export manufacturing to higher value-added industries, light industries provide crucial support for the country's rural majority, with roughly half producing agriculture-related products that provide a livelihood for some 200 million farmers and migrant workers.