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China supports private investment in petrochemical industry

Updated: Sep 28,2018 3:09 PM

Premier Li Keqiang decided to change the established route to an island after learning of the latest progress on the Zhoushan green petrochemical base project, while visiting Zhejiang on Sept 27.

With a projected total investment of $25 billion, the Zhoushan green petrochemical base project is under construction on the 26-square-kilometer Yushan Island, which is located in northwest Zhoushan, East China’s Zhejiang province.

Between its hills and coastlines stand giant petrochemical production facilities, tower cranes and dense prefabricated houses, and 37,000 people are busy with construction.

In 2014, Premier Li personally urged the implementation of the project. Now, it is not only the largest single-industry project in the world, but also the largest private investment project in China.

Zhejiang Petrochemical Co, which manages the investment and construction of the project, has 71 percent in private capital.

“The construction project is a dose of ‘stabilizer’ to the market,” Premier Li said, “and the government will introduce more policies to ensure private enterprises a more stable market expectation.”

In 2014, the State Council made a clear statement that the petrochemical base refining and chemical integration project determined by the State plan is open to social capital, which immediately received a warm response from private capital.

The person in charge of the project told the Premier that the project has received a total investment of 78.1 billion yuan since 2005, and it plans to achieve a refining capacity of 20 million tons by 2020, mainly for fine chemical production.

The project has purchased equipment from several foreign companies, and introduced automation and information management methods, and an integrated refining and chemical base with a projected capacity of 40 million tons per year.

The third phase of the project highlights an upgraded petrochemical industry, which fits in well with emerging industries, featuring modern manufacturing, new energy resources, and life sciences. That will usher in a world-class comprehensive and modernized industrial base for the petrochemical industry.

Premier Li greatly values the privately operated project’s contribution to stable investment, and pressed people in charge of the project to firmly stick to safety, international standards, and first-rate benchmarks for environmental protection.

Referring to the Premier’s instruction, the person in charge said that the project will do all it can to meet the requirements of safety and environmental protection by virtue of a reliable supervision system and the experience drawn from cooperation with international petrochemical giants.

As Premier Li made his way to the construction site, a worker said that Yushan Island had ascended to become a world-class petrochemical industrial base within only two years.

The Premier said that the construction process should embody China’s speedy development as well as China’s high-quality production on the premise of foolproof safety.

Prior to the inspection tour to Yushan Island, the Premier co-witnessed the signing of protocols between China and BASF SE, with German Chancellor Angela Merkel, during his visit to Germany in July. BASF SE decided to establish a solely invested integrated industrial base for fine chemical engineering in China, with investment of $11.63 billion.

In September, Premier Li met with Darren Woods, CEO and chairman of ExxonMobil, and facilitated a solely invested petrochemical project in Guangdong, with a $10 billion capital injection.

The Premier said that the Chinese government provides a fair environment for enterprises of all patterns of ownership, be it domestic or foreign-owned, which boosted Woods’ confidence in the project.

According to related experts, against the backdrop of an exceedingly exacerbated economic downward pressure and sluggish increase in investment, three large-scale petrochemical projects propelled by the Premier, invested by two international conglomerates and a domestic privately owned corporation, mirror China’s steadfast commitment to reform and opening-up and signal a bright economic prospect.