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China Plans Investment Boost, Tax Incentives for Advanced Materials Industry
Sep 8,2011 09:54CST
industry news
China plans to beef up investment and offer tax incentives to increase the annual output of the advanced materials industry to 2 trillion yuan (313 billion U.S. dollars) by 2015.

ARBIN, Sept. 7 (Xinhua) -- China plans to beef up investment and offer tax incentives to increase the annual output of the advanced materials industry to 2 trillion yuan (313 billion U.S. dollars) by 2015, an official with the Ministry of Industry and Information Technology (MIIT) said on Wednesday.

The target figure is about 5 percent of China's 2010 gross domestic output (GDP). The world's second-largest economy is looking to emerging industries like advanced materials to provide it with sustainable, technology-driven growth.

The section of the government's 12th Five-Year Plan regarding the advanced materials industry (2011-2015) was approved by the MIIT last month and will be modified to be more specific, according to Gao Yunhu, deputy head of the raw materials industry department of the MIIT.

The government aims for "breakthroughs by 2015 in a series of key generic technologies that are urgently needed and will lead future growth" and "a leading role for the advanced materials industry in the national economy by 2020," Gao said.

He said that the industry is expected to grow at an average annual rate of more than 25 percent until 2015, with major enterprises' research and development investments projected to match 5 percent of their total sales revenues.

"A stable fiscal support mechanism and a special fund for the development of the advanced materials industry will be set up," Gao said.

Advanced materials feature improvements over traditional materials. One example is bioceramic, a type of ceramic that can be used to make artificial bones that won't be rejected by the body's immune system.

Advanced materials are widely used in products ranging from mobile phones to rockets and are deemed as an important driver for emerging industries such as alternative-energy cars and biotechnologies.

The government's determination and planning for the advanced materials industry will enhance the initiatives of researchers and enterprises and lead to a "golden age" for the industry, said Du Shanyi, chief of the Center for Composite Materials at the Harbin Institute of Technology.

China's advanced materials industry saw its total output reach 650 billion yuan in 2010, growing 20 percent since 2005, Gao said.

Gao said that the country's output capacity for superhard materials and advanced energy storage materials already ranks near the top in the world, while several of its independently-developed advanced material production technologies have reached or are near a globally advanced level.

However, the industry's overall development still lags behind that of developed countries. Gao attributed the cause to weak indigenous innovation and difficulty in industrializing new technologies, as well as inadequate planning, policy support and investment.

About a third of the advanced materials needed by China cannot be produced by Chinese companies, while more than half of the advanced materials that the country consumes are imported, said Gao.

"Many results of our research are only displayed at exhibitions instead of being turned into products," said Du Shanyi.

Less than 20 percent of technologies in the advanced materials area were commercialized in China because of lack of research and investment, said Du.

The advanced materials industry is one of seven strategic emerging industries that China aims to boost over the next five years in order to transform the country's economic growth model.

Other strategic industries include alternative energy, biotechnology, new-generation information technology, high-end equipment manufacturing, alternative-fuel cars and environmental protection. The combined value-added output of these industries should account for 8 percent of the country's GDP by 2015, according to output targets set by the government.

"The development of strategic emerging industries often depends on breakthrough achievements in key materials," Gao said.

The text of the five-year plan for the advanced materials industry has been completed and the plan will be formerly announced soon, Minister of Industry and Information Technology Miao Wei said at the exposition on Tuesday.

The 1st China International Advanced Material Industry Exposition is scheduled to run from Tuesday to Thursday in Harbin. More than 800 domestic and foreign enterprises, including those from the United States, Germany and Russia, participated in the exposition.

A total of 152 types of advanced materials under six categories are put on exhibition at the event.


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