Fixed assets investment in China's petroleum and chemical industry rose by 36.3 percent in the first half year with surplus production capacity emerging in some sectors, said an executive with the China Petroleum and Chemical Industry Association (CPCIA) on Thursday.
Yang Weicai, deputy director with the CPCIA said at the China petroleum and chemical economic forum held in Taiyuan, capital of north China's Shanxi Province, that the growth is six percentage points higher than China's total fixed assets investment growth in the first six months and higher than the already sharp industrial growth of 34.9 percent in 2005.
According to the data released by the National Bureau of Statistics (NBS) last month, China's GDP grew by 10.9 percent in the first six months, 0.9 percent higher than the same period last year. A major factor was the investment in fixed assets which rose 29.8 percent, up 4.4 percent year on year.
Investment in oil exploration and development was 67.1 billion yuan (US$8.4 billion), up 25.6 percent from the same period last year, and investment in oil processing rose by 88.7 percent year on year to 25.3 billion yuan in the first half of the year, said Yang.
Risks of surplus production capacity have emerged in some sectors including rubber, pesticide, fertilizer and fiber manufacturing, which had reached a basic balance of demand and supply but saw a sharp rise of investment since the beginning of this year, said Yang.
According to statistics of CPCIA, investment in rubber, pesticide, fertilizer and fiber manufacturing rose by 66.5 percent,48.1 percent, 45.9 percent and 171.1 percent respectively in the first six months.
Excessive investment may put pressure on China's ongoing move to enhance energy efficiency, strengthen environmental protection and improve the industrial structure, said Yang.
According to statistics of the NBS, energy consumption by the petroleum and petrochemical industry in the first half year rose by 8.7 percent, while energy consumption in the chemical industry dropped by five percent. The total rise in energy consumption of the petroleum and chemical industry was three percent.
Considering the current situation, Yang said it is difficult for the petroleum and chemical industry to realize the annual goal of cutting energy consumption by 4 percent.
(Xinhua News Agency August 11, 2006)