China's Liaoning to fight oil prices with technology

01 December 2006 11:30  [Source: ICIS news]

SINGAPORE (ICIS news)--China's Liaoning provincial government is encouraging the local petrochemicals industry to upgrade its technology to help deflect effects of high crude oil prices on the economy, the country's National Bureau of Statistics (NBS) said on Friday.

 

Citing a report by the Chinese Academy of Sciences, the Bureau said in a statement that mid-level technological advancements could prevent any adverse effect to the country’s gross domestic product (GDP) if crude oil prices increased by up to 20%.

 

It added that more advanced technologies could secure the stability of China’s GDP even if crude oil prices doubled.

 

Besides improving technologies, the Liaoning government has been consolidating the state-owned enterprises, causing the number of large firms to fall by 3% between 2000 and 2005, the NBS said.

 

The number of small enterprises was reduced by 3.8% in the same period.

 

SOEs are an integral part in Liaoning’s petrochemical industry. They hold 67.5% or yuan (CNY) 46.9bn ($6bn) of the total petrochemical assets in Liaoning even though only 11.2% of the companies are state-owned, the NBS said.

 

Liaoning, home to Huajin Chemical, Fushun Petrochemical and Dalian Petrochemical, has the most SOEs compared with provinces such as Jiangsu, Zhejiang, Fujian, Shandong and Guangdong.

 

The provincial government will continue to restructure and reduce the number of SOEs. 

 

$1 = CNY7.8

By: Keith Tan Liming
+65 6780 4359

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