In 2006, the Chinese government is expected to intensify its efforts in advancing key industrial technologies and supporting the development of domestically produced equipment. This focus was highlighted in the "Report on the Implementation of the National Economic and Social Development Plan for 2005 and the Draft Plan for 2006," submitted by the National Development and Reform Commission (NDRC) to the National People's Congress during the two sessions. The report emphasized the importance of promoting innovation and reducing reliance on imported technology, especially in critical sectors such as energy and petrochemicals.
Over the past five decades, China’s machinery manufacturing industry has grown significantly, now accounting for over 7% of the global market and ranking fourth worldwide. Despite this progress, the localization of key equipment remains a challenge. For instance, in the petrochemical sector, many companies are hesitant to adopt locally produced technology, often fearing quality and performance issues—akin to "the first crab to be eaten." However, as the scale of oil refining and ethylene production continues to expand, the lack of self-reliant core technologies poses a serious risk to national energy security.
To address this, the NDRC has launched several initiatives aimed at boosting domestic production of large-scale equipment. Projects such as the four-million-ton ethylene plant, the one-million-ton PTA project in Yizheng, and others in Tianjin, Zhenhai, Fushun, and Chengdu are being developed using local technology. These projects mark a significant shift toward self-sufficiency in critical industrial infrastructure.
Currently, the one-million-ton ethylene localization project is already underway, with the domestic production of large hydrogenation reactors and high-pressure units in progress. In Sichuan, where a new ethylene project was recently approved, the localization rate has reached 85%. Out of 12 sets of equipment, four use fully domestic technology, three prioritize domestic solutions, and five rely on foreign technology, with only the ethylene equipment requiring foreign technical packages. This marks the first time that PetroChina has fully absorbed foreign technology for engineering design.
The report also noted that in 2005, significant progress was made in the localization of major equipment, including the one-million-ton ethylene project. Moving forward, the government will continue to support the development of core technologies in energy and other strategic industries, establish venture capital funds, and provide policy incentives to encourage the adoption of the first domestically produced equipment. These measures aim to strengthen China’s technological independence and ensure long-term industrial security.
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