China's top economic planner may issue a policy suggesting more petrochemical equipment be made locally, China Daily has learned.
"There is a guiding policy under draft by the industrial authority, requesting that 75 percent of major petrochemical equipment be produced by Chinese companies during the 11th Five-Year Plan (2006-10)," Zhao Zhiming, executive vice-president of the China Petroleum and Petrochemical Equipment Industry Association, said yesterday.
The Shanghai Securities News reported that the National Development and Reform Commission (NDRC), China's top economic regulator, has finished a draft of the document, which has been distributed to major petrochemical producers, such as CNPC and Sinopec, for their advice. The NDRC was not available for comment yesterday.
An anonymous source from Sinopec has confirmed with China Daily that they received a policy draft for consultation.
"Once major petrochemical equipment can be available locally, we will not be in an underdog position any more while seeking cooperation with potential overseas partners," the source said.
The cost of purchasing equipment will also be substantially less, said the insider with Sinopec, Asia's top refiner and China's leading petrochemical maker.
China-made major petrochemical equipment costs one third to half of foreign-made equipment, according to Zhao.
The market size of the petrochemical equipment-manufacturing sector is huge, with investments reaching 100 billion yuan in China each year, Zhao said.
Cooperation with foreign partners is still necessary, especially concerning the construction of large-scale petrochemical crackers, Zhao said.
"That is why the NDRC adopts a gradual approach to push the localization of major petrochemical equipment manufacturing. Currently we have made breakthroughs in 1-million-ton petrochemical crackers manufacturing, although we still need international cooperation in this regard," Zhao said.
According to the draft of the NDRC document, equipment that can be produced locally should be made by Chinese companies, while the joint construction of the equipment that requires international technology and expertise must be based on win-win cooperation, Shanghai Securities News reported.
At present, most refining equipment and petrochemical crackers can be produced locally, and breakthroughs have to be achieved regarding 1-million-ton plus petrochemical crackers.
China's petrochemical production is increasing with more capacity planned and major projects either under construction or awaiting government approval.
Source:China Daily
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