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Policies for Development of Iron and Steel Industry

The iron and steel industry is an important basic industry of the national economy, a supporting industry for realizing the industrialization and an intensive industry in technologies, capital, resources and energy, and its development requires a comprehensive balancing of all kinds of external conditions. China is a big developing country with a comparatively big demand of iron and steel in the economic development for a long time to go. China's production capacity of iron and steel has ranked the first place in the world for many years. However, there is a large gap in terms of the technological level and material consumption of the iron and steel industry compared with the international advanced level, so the focus of development for the future shall be put on technical upgrading and structural adjustment. In order to enhance the whole technical level of the iron and steel industry, promote the structural adjustment, improve the industrial layout, develop a recycling economy, lower the consumption of materials and energy, pay attention to the environmental protection, raise the comprehensive competitive capacity of enterprises, realize the industrial upgrading, and develop the iron and steel industry into an industry with

international competitive capacity that may basically satisfy the demand of the national economy and social development in terms of quantity, quality and varieties, we have formulated the policies for development of the iron and steel industry according to the relevant laws and regulations and the domestic and international situations that the iron and steel industry faces so as to guide the sound development of the iron and steel industry.

Chapter I Aim of the Policy

According to the requirement of our country's economic and social development and the situation of resources, energy and environmental protection, the production capacity of iron and steel shall maintain at a reasonable scale, which may be specifically resolved in the relevant planning. The comprehensive competitive capacity of iron and steel industry may reach to the international advanced level so that China may become a large country in iron and steel production and a great power country in world-wide competitive.

By the year 2010, through the means of structural adjustment of products, the proportion of good iron and steel products shall be elevated considerably, the majority of products shall be basically satisfied the development requirements of most industries in the national economy such as construction, machinery, chemical industry, auto-mobiles, household appliances, vessels, traffic, railway, military industry and new industries.

We may elevate the industrial concentration by means of organizational and structural adjustment of the iron and steel industry, and expand the scale of those backbone enterprise groups with comparative advantages by means of amalgamate

and reorganization . By 2010, the number of iron and steel smelting enterprises shall be considerably reduced and the production capacity of the iron and the output of steel enterprise groups that rank top 10 in the domestic market shall be reached to 50 % and above of the national total production capacity; by 2020, the proportion shall be reached to 70% and above.

By means of layout adjustment of the iron and steel industry, by 2010, the unreasonable layout shall be improved; by 2020, a comparatively reasonable industrial layout that complies with the supply of resources and energy, allocation of traffic and transportation, supply and demand of the market and environmental capacity shall be formed.

According to the concept of sustainable development and recycling economy, we should elevate the comprehensive level of environmental protection and resource utilization, and should save energy and lower consumption. We should elevate the comprehensive utilization capacity of waste gases, water and rubbishes to the largest possible extent, strive for the goal of realizing \steel factories of the recycling type. The iron and steel enterprisesmust develop the business of generating power by using reclaimed heat and energy. An iron and steel associated enterprise with the production scale of more than 5 million tons shall strive for the goal of having more than enough power to support itself and providing the surplus to outsiders. By 2005, the comprehensive energy consumption for each ton of steel shall be lowered to 0.76 ton of standard coal, the comparable energy consumption for each ton of iron shall be lowered to 0.70 ton of standard coal and the water consumption for each ton of steel shall be lowered to less than 12 tons in the whole industry; by 2010, the corresponding index shall be lowered to 0.73 ton of standard coal, 0. 685 ton of standard coal and less than 8 tons of water, respectively; by 2020, the corresponding index shall be lowered to 0.7 ton of standard coal, 0.64 ton of standard coal and less than 6 tons of water, respectively. That is, in the coming

10 years, the iron and steel industry shall, on the precondition that the total consumption of water resources decreases and the total energy consumption increases by a small margin, and realize a proper development in total quantity.

Before the end of 2005, all the wastes as discharged by iron and steel enterprises shall have been met the standards of the state and local provisions, and the total discharge volume of major wastes shall have been met the controlling index as verified by the local environmental department.

Chapter II Industrial Development Planning

The state shall guide the iron and steel industry to develop in a sound, sustainable and harmonious manner through the development policies and the mid- and long-term development planning of the iron and steel industry. The mid- and long-term development planning of the iron and steel industry shall be formulated by the National Development and Reform Commission (hereinafter referred to the NDRC) in collaboration with other relevant departments.

An enterprise group with a production capacity of more than 5 million tons in 2003 may, according to the state mid- and long-term development planning of the iron and steel industry and the overall planning of the city where it is located, formulate the planning of its own, which shall be implemented upon the approval of the State Council or the NDRC after making necessary cohesion and balancing efforts. The specific construction projects of the planning shall not be required to be subject to the examination and approval or verification of the NDRC, but shall be organized and implemented by the enterprise itself after such formalities for examination and approval of land, environmental protection, security and credit have been handled, and shall be reported to the NDRC for archival filing according to the relevant provisions.

The development of any other iron and steel enterprise shall also meet the requirements of the development policies and mid- and long-term development planning of the iron and steel industry.