China to Control Overcapacity in Some Industries   

At the end of September, China's ten governmental departments including the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Land and Resources, the Ministry of Environmental Protection, the People's Bank of China jointly suggested a proposal of controlling overcapacity in some industries. Recently the State Council of China approved this proposal. The involved industries include iron and steel, cement, flat glass, coal chemical, polysilicon, wind power equipment, electrolysis aluminum and ship making.
    In recent years, some local governments of the rich-in-coal regions developed blindly coal chemical industry in order to pursue a high growing rate of local economy, without considering the bearing capability of ecology and water resource, the immature technologies of modern coal chemical industry and transmission efficiency of energy. These ten government departments stated in the proposal that China's capacity of traditional coal chemical industry (coal to ammonium and coal to methanol) has already surpassed the domestic demand by approximately 30%. In the first half of this year, the average operation rate of methanol production units was around 40% in the country. At present, the demonstration projects of coal to oil and coal to olefin are still in the stage of trial run in China, however, many companies and local governments are eager to program modern coal chemical projects.
    Polysilicon is a basic material for the information and photovoltaic solar industries. It also consumes energy heavily and brings more pollution problems. The proposal reported that China now has 20 000 t/a of polysilicon production capacity, with an annual production of 4 000 tons in 2008, and the new projects under construction together have a capacity of 80 000 t/a. Total supply exceeds local demand a lot. 98% of solar batteries made in China have been exported, which is equivalent to export energy that is short of supply locally.  
   Similar problems happened in the electrolysis aluminum, nitrogenous fertilizer and phosphate fertilizer industries.
   According to the proposal, China will use combined policies to control sternly the newly added capacity in the iron/steel, cement and flat glass industries. The governments will no longer approve the expansion of coking and calcium carbide projects, will ban the construction of coking and calcium carbide projects that do not meet the permit, and will not approve, in principle, any demonstrative project of coal to oil or coal to olefin.
   New polysilicon project must have a capacity of larger than 3 000 t/a, and meet other limitations in land use, power consumption and recovery of tail gas.
   The government will not, in principle, approve new construction or expansion of electrolysis aluminum projects and will eliminate 800 000 t/a of outdated facilities by the end of 2010.
   The measures to be used include stricter permits, checks, loan constraints and environmental impact assessment.