Innovation Indicates Future Orientation of the Chinese Chemical Industry    

By Peter Zong

"The Chinese chemical industry used to develop under a mode of depending on lower gross margin and foreign technologies heavily. The environmental pressure caused by high consumption and heavy emission is aggravated today," said Zhang Jing An, Chairman of the Science & Technology Daily Press at the "2008 China Chemical Industry Self Innovation Summit" held on July 31st, 2008. "It shows that such mode can not remain a sustainable development and must be modified. Imports can only narrow the gap. Only self-innovation can help China chemical industry to determine the future by itself. China chemical industry should make clean development. Only 'green' competition is the vitality for the sustainable development. China needs development with beautiful landscape."
    "China chemical industry still has a gap compared with the world advanced," said Pan Derun, Standing Deputy Director of China Petroleum and Chemical Industry Association at the summit. "The extensive development mode of relatively low technical level, irrational industrial distribution, high energy consumption and high pollution has inhibited the further development of China chemical industry in quality. In such case, achieving a fundamental transformation in the chemical industry through self innovation and industrial restructuring is the only way and method to upgrade the competitiveness of China chemical industry. China chemical industry must take a way with the growing mode of low consumption, low pollution and high effect through the efficient and cyclic utilization of resources."
    Zhang Xinda, Chairman of Shandong Jinhe Industrial Company Limited, said at the forum that Shandong Jinhe, as a player in the development of the sodium hydrosulfite sector through self innovation, has renewed its sodium hydrosulfite production process several times and created quite a few low-cost records in the sodium hydrosulfite production. Shandong Jinhe now owns five invention patents in China in key technology and is at the world leading level. It has got the pass to the world sodium hydrosulfite market through its own intellectual property right. The company is a pioneer in the shift from "made in China" to "invented by China". It has also changed the industrial mode of the sodium hydrosulfite sector in the world and enabled Chinese brands to have a voice in the global sodium hydrosulfite sector."
    According to the questionnaire survey made by the State-owned Assets Supervision and Administration Commission of the State Council of China, the R&D input in Chinese enterprises increased at an average annual growth of 24.5% between 2001 and 2005. The R&D input in China reached RMB300 billion in 2006. What should be noted is that private enterprises have become an important force in the R&D input. According to statistical data from Zhejiang Department of Industry and Commerce, in the first three quarters of 2007 the input made by private enterprises for technical renovation was RMB30.29 billion in Zhejiang province, an increase of 26.44% over the same period of 2006 and the input for new product research and development was RMB5.788 billion, an increase of 10.19%.
    Experts and scholars attending the forum all think that the core of the reform in China is institutional innovation. Self innovation is the core of the overall economic development strategy of the state and is also applicable to the chemical industry. Although the Chinese petroleum and chemical industry has maintained a rapid development in recent years and has an extensive potential in future, the international environment is complicated and changeable and problems of extensive operation, irrational distribution, weak self innovation and prominent resource environment gap still exist in the development of the chemical industry. The future development of the Chinese chemical industry will therefore face severe challenges.