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China may enact refining, chemicals stimulus by March
Updated: 2009-02-04 17:09

China, the world's second-biggest energy consumer, may enact a stimulus plan for the oil refining and petrochemicals industry before a gathering of the country's legislature to help spur the slowing economy, an official said.

Government departments are currently discussing the stimulus proposal, an official at the China Petroleum and Chemical Industry Association said today. The plan may be unveiled before the annual meeting of the National People's Congress next month, said the official, who declined to be identified.

China's economy expanded at the slowest pace in seven years in the fourth quarter of 2008, cutting consumption of fuels and petrochemicals. Refineries posted a loss of 149.3 billion yuan ($22 billion) in the first 11 months of last year, the Ministry of Industry and Information Technology said Tuesday.

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The stimulus package, to cover three years of project spending, needs to have an "immediate effect" to bolster the industry, the official said. The planned expenditure may include 100 billion yuan to upgrade refineries and 400 billion yuan for petrochemical projects, the Shanghai Securities News reported today, without saying where it got the information.

"It is good for the industry because the plan will mean a coordinated effort in project construction, avoiding wasteful investments," Yin Xiaodong, an analyst with Citic Securities Co., said by telephone in Beijing.

Stimulus measures

China is considering additional measures beyond a 4 trillion-yuan spending plan to support its economy amid the global recession, the Financial Times reported Tuesday, citing an interview with Premier Wen Jiabao in London. The steps have to be taken preemptively before an economic retreat, Wen said, according to the newspaper.

"Some taxation incentives are also likely to be included in the stimulus package to help boost domestic demand," Yin said.

China Petroleum & Chemical Corp., the nation's biggest oil refiner, gained 1.5 percent to close at HK$4.17 in Hong Kong trading today.

The National People's Congress convenes every March, with almost 3,000 lawmakers congregating at the Great Hall of the People in Beijing. Last year's conference ran from March 5 to March 15.