The Tenth Five-Year Plan of the Petrochemical Industry and its Development
1. The Tenth Five-Year plan of the petrochemical industry

During the Tenth Five-Year Plan (2001-2005), the guidelines for the petrochemical industry are as follows: track the development trends of the global petrochemical industry and improve oil refining and develop the ethylene industry; focus on structural adjustments and competitiveness advances; boost industrial upgrades and transformation from extensive production to intensive production and from big producers to powerful producers through reform and opening up to the outside world; structural adjustments; technological innovations and market regulations; larger contributions to the sustainable, fast and healthy development of the national economy.

(1) Objectives

During the Tenth Five-Year plan, the total capability of oil refining will reach 0.27 billion tons, among which the processing capacity of the imported sour crude will be above 7.5 million tons, and eight or nine refining bases will be set up with a processing capacity of 10 million tons.

The producing capacity of ethylene will exceed 9 million tons and two processing bases with over one million tonnages will be set up in Shanghai. The self-supporting percentage of ethylene should arrive at about 60 percent.

Depending on the characteristics, technological and market advantages, China should step up the capacity of oil refining and develop the gross volume of ethylene, giving emphasis to polyolefin and polyester and cultivate the key products and operations of the country's petrochemical industry.

China should pay attention to reconstructions and new constructions, sole investments and joint ventures (JV) simultaneously and the principle of sustainable and fast development. The nation must optimize raw materials and concentrate the overall arrangements. The technological advancements for improving competitiveness should reflect the guiding principle of Varieties, Quality and Profitability for the ethylene industry. Meanwhile, China will also speed up its construction schedule for JV projects and improve the production capability of ethylene and its downstream units' market share. The country should, therefore, accomplish the following objectives:

a. Speed up the technological improvements in existing ethylene equipment.
China must finish the first- and second-round improvements at initial stages of the Tenth Five-Year plan and direct the equipment to a new standard in size, technologies, product quality, energy conservation and a decline in waste.

b. Speed up the process of large-scale ethylene JV projects.
The united devices constructed by JVs should meet advanced technological and management world standards. The development principles of Variety, Quality and Profitability should be embodied in the selection of its downstream-level products to promote a continuing improvement of standards and competitiveness of the ethylene industry in our country. Meanwhile, capable enterprises will be encouraged to speed up their working process of large-scale homemade ethylene projects for the nationalization of relevant ethylene technics and its related equipment.

c. Optimizing raw materials of ethylene
Take advantage of integrative petrochemical businesses, focusing on economic benefits and optimizing the raw materials of the ethylene industry. Domestic and foreign resources should be considered simultaneously and the proportion of diesel oil should be reduced.

d. Speed up the construction of industrial zones for the ethylene industry
Encourage enterprises to adopt different types of investments to set up large-scale ethylene devices in the same region and make up industrial zone, enabling resources such as ethylene and propylene to get optimal provisions from each other and collective uses of the byproducts of ethylene devices; set up economically sized downstream units.

(2) Main Policies and Measures

a. To carry out thorough reforms and persistent reorganizations
Carry out thorough reforms in petrochemical enterprises and accomplishing the construction of a modern corporation system; improve the structure of juridical persons at corporations; set up and improve useful prompts and restrictive mechanisms. Following the overall reorganization, systematical changes and listing on stock markets, China should continue to restructure inside and between the petrochemical industry's corporation groups.

Establish systems of management, administration and supervision, with a specified division of work, and reinforce the external supervision over the managing entities of the nation's capital assets.

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