IV. Energetically Optimizing and Improving Industrial Structure

Readjusting and improving industrial structure is the key to the strategic restructuring of the economy. We must stress the following aspects.

Enhancing traditional industries with high, new and advanced technologies. We need to pay close attention to the restructuring and reform of traditional industries. In these industries enterprises are the main entities, and they should be directed by the market and supported by technological advances. The following measures should be taken. First, we need to increase product variety, improve product quality, save on energy, reduce waste, prevent and control pollution, and increase productivity. These measures are most important in the energy, metallurgy, chemical, machinery, automobile, building materials, construction, textile and light industries. Support should be given to a number of key enterprises for technological renovation to improve their technology and equipment. Second, we need to speed up development of universal, key and accessory technology that can stimulate structural advancement by depending on both domestic innovation and imported technology. We need to stimulate equipment manufacturing and design and build complete plants of large, advanced and highly-efficient equipment urgently needed in China. Third, in major industries, we need to encourage the establishment of a number of large companies and enterprise groups through stock listing, merging, association and reorganization. Such companies and groups need to have their own intellectual property rights, core products and a strong central leadership, and they should become key players and pillars in industrial readjustment and advancement. Fourth, we need to support and promote renovation of old industrial bases, fully utilizing their strong foundation and concentration of talent to raise their production levels. At the same time, we need to take economic, legal and necessary administrative measures to continue closing down plants and mines that produce shoddy goods, waste resources, cause serious pollution, or operate under unsafe conditions. Outmoded and surplus production capacity needs to be abandoned or reduced. Relocation and reconstruction of these outmoded facilities will be prohibited. Enterprises that have been in the red for long with little hope of recovery and whose debts surpass assets should be allowed to go bankrupt, and mines with exhausted resources should be closed. We should take the initiative to facilitate and gradually standardize the channels for encouraging such enterprises to quit the market.

Developing new and high-tech industries, and using information technology to stimulate industrialization. In accordance with actual situations, we need to selectively stimulate development of new and high-tech industries such as information technology, bioengineering and materials science. We need to lend support to important high-tech projects, such as high-speed, wide-band information networks, key integrated circuits and new-type carrier rockets in order to strengthen China’s new and high-tech industries on an overall as well as individual basis. We need to expand the manufacturing of information technology products, develop the ability to manufacture all components of integrated systems, and enhance our capability for independent development. We also need to develop the software industry, strengthen the development of the information infrastructure, and apply information technology extensively throughout society, so that industrialization and the information revolution go hand in hand.

Intensifying construction of water conservation, transportation, energy and other infrastructural facilities and attaching great importance to strategic issues concerning resources. Lack of water resources is a serious limitation on the economic and social development of our country. We need to put water conservation high on our work agenda, establish a rational pricing mechanism, comprehensively adopt water conservation technologies and measures, develop water-efficient industries, and raise the entire society’s awareness of water conservation. Prevention and control of water pollution should be strengthened. We need to expedite the planning and building of projects to divert water from the south to the north. In transportation, we need to build highways, railways, ports, channels, airports and pipelines in order to establish a comprehensive modern transportation system that is unimpeded, safe and convenient. Energy, oil in particular, is of strategic importance. Domestic development and production of oil can no longer keep pace with the needs of the country’s economic and social development, resulting in an increasing imbalance between oil supply and demand. Therefore, we need to take all possible measures to conserve oil, accelerate exploration and exploitation of oil and natural gas resources, and make effective use of overseas resources. We need to institute a system for preserving strategic resources such as oil as soon as possible. We need to vigorously carry forward the renovation of large coal mines, construct highly productive and efficient mines, and place special emphasis on the exploitation of clean coal. While making full use of existing power-generating capacity, we need to develop hydroelectric power and build large-scale thermal power plants near coal mines, reduce small thermal power stations, and moderately develop nuclear power. Emphasis should be placed on the development of all types of new energy. We should further reform the power management system, gradually allow power plants and grids to operate separately, and institute bidding for the power supply.

Accelerating development of the service industry. This is an important avenue for stimulating economic restructuring and increasing employment. Actively developing modern services, such as information services, banking, accounting, consulting and law, will help raise the overall quality of the service industry. Up-to-date management and technology should be applied to renovate traditional service sectors, such as internal and foreign trade, transportation and municipal services, to improve their quality and efficiency. Services for urban consumers, such as real estate, community services, tourism, catering services, entertainment and fitness services need to be expanded. We need to deepen reform and adopt necessary policies and measures to create an environment favorable for the development of the service industry.