China Urges the Petrochemical Industry to Adjust, Transform, and Increase Profitability

On August 3, 2016, the General Office of the State Council of China published the Guidelines on Structure Adjustment, Transformation, and Profitability Growth of the Petrochemical Industry to improve capacity and product structure, rationalize geographic distribution, promote sustainable development, and strengthen innovation ability of the Chinese petrochemical industry. The Guidelines select the following seven areas as the development priorities: (1) resolving overcapacity problem; (2) improving geographic distribution; (3) improving traditional industries; (4) promoting safe and green development; (5) perfecting the innovation system; (6) promoting enterprises M&A and restructuring; and (7) enhancing international cooperation. To effectuate the goals, the Guidelines call on the government to increase government grants for encouraged projects, improve preferential tax treatment, and guide financial institutions to provide credit loan support.