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Nation seeks strategic industries' development (2)

By Lan Lan  (China Daily)

08:04, July 24, 2012

Policymakers must transform ways of thinking, as the successful development of emerging industries won't rely solely on new building, as was the case during the development of the chemical industry in the past decade, he said.

Also, overcapacity has emerged in emerging sectors such as wind power.

At the same time, the government must position itself well in the development of emerging industries, he added.

Public investment should mainly focus on key common technologies that could be shared among companies. The government could also play a positive role in creating a favorable investment environment and launch pilot programs to help shorten the time it takes new products to be accepted in the market.

"The government should play only a limited role in the development of emerging industries. To make these industries really competitive and mature, market mechanism should play a decisive role," Wan said.

Strategic emerging industries are targeted to maintain an average annual growth rate of more than 20 percent, and the government will provide favorable fiscal and financial policies to boost their development.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said the planning showed the central government's preference for future investment, and local governments will follow suit to get their projects' approval.

Some provinces have announced a series of subsidy measures to support strategic emerging industries.

Companies in strategic industries can expect significant subsidies from the central government and local governments, experts said.

The central government has set up a 7.5 billion yuan ($1.17 billion) investment fund this year for strategic emerging industries, said Lin.

Reuters reported at the end of 2010 that China was considering investing up to $1.5 trillion in the seven strategic industries by 2015.

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