China or will strictly control investment plans for seven emerging strategic industries

The “Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries” has listed the seven industries of energy conservation and environmental protection, new generation of information technology, biology, high-end equipment manufacturing, new energy, new materials and new energy vehicles as the key developments at this stage. Object. Recently, a source said that China will strictly control the large-scale investment plans for the seven emerging strategic industries, thereby reducing the cutting-edge projects in industries plagued by corruption and overcapacity.

As of the end of 2010, China's wind power industry has completed a total installed capacity of 42GW, becoming the largest wind power country, with an annual increase of 18.93 million kilowatts of wind power, far more than other countries, accounting for half of the world's new installed capacity. However, due to the rapid growth in installed capacity and unresolved grid-connected technology, wind turbines have become idle. More than 30% of the newly installed capacity last year was wasted due to lack of access to the Internet. After many years of staking and enclosure, the major power groups in China have significantly slowed down investment in wind power. Minister of Railways Sheng Guangzu said that investment in railway infrastructure this year is 600 billion yuan, which is more than the previous plan of 700 billion yuan. It should be 100 billion yuan less. In addition, Sheng Guangzu also reduced the speed of the high-speed rail for safety reasons, from the original planned 380 kilometers per hour to 300 kilometers. The industry expects that the peak of high-speed rail revenue may have passed and the future revenue may even decline. The sharp reduction in demand will undoubtedly directly affect the performance of related companies. Some companies’ original capacity expansion plan will be greatly reduced. Sources recently said that China or will strictly control large-scale investment plans for seven emerging strategic industries, covering high-end Equipment manufacturing, new energy, biotechnology, next-generation information technology, new energy vehicles and energy conservation and environmental protection technologies will reduce the number of cutting-edge projects in industries that are plagued by corruption and overcapacity.

According to sources, China originally planned to invest up to 1.5 trillion U.S. dollars in these seven industries during the 12th Five-Year Plan period, turning it into a pillar of economic growth, and then shifting to a model based on the production of cheap products. For a long time, the Chinese government has been creating employment and promoting economic activities through spending on infrastructure construction. Recently, it has used fiscal funds to curb the impact of the global financial crisis. Despite relatively safe passage through the crisis, China has for some time begun to worry about the huge debts of local governments and tried hard to control inflation. Some foreign economists believe that China's economy has a hard landing.

Market expectations for new industries As early as September 8, 2010, Premier Wen Jiabao of the State Council presided over a State Council executive meeting and reviewed and approved in principle the Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries. Energy conservation and environmental protection, a new generation of information technology, biological, high-end equipment manufacturing, new energy, new materials and new energy vehicles seven industries are listed as the focus of development at this stage.

The seven clearly-defined emerging industries are basically in line with previous market expectations. "All industries are in urgent need of shifting their economic structure and industrial structure, and they will have greater future development prospects in the future. Basic and major international economies are in a direction of development. Consistent.” At that time, the securities report stated this way.

“The seven emerging industries have very large space, such as energy-saving and emission reduction. The government plans to reduce the carbon dioxide emissions per unit of GDP by 40%-45% in 2005 compared with 2005. It is still far away from this goal, and the development space is also relatively low. Large and new energy vehicles are listed separately, and the direction of development is very clear. And the characteristics of the seven new industries proposed this time are the same starting line with other countries in the world, and the prospects of relevant industries and stocks are all better.” British University Securities The director of the institute, Li Dazhao, said in an interview with the media.

According to the Guosen Securities report, investment in these seven emerging industries should be grasped from the perspectives of the adequacy of technology and industry preparation and the elasticity of demand in terms of policy incentives. It is optimistic that the industry is in an outbreak period and breaks through foreign monopolies to achieve import substitution. .

Specifically for these emerging industries, Guoxin Securities believes that industries with explosive growth potential mainly include nuclear power that will usher in the peak of construction in the next few years, triple-play convergence that has entered the pilot phase, and materials that have entered a substantive stage of advancement. Networking, welcome opportunities under the encouragement policy for new energy vehicles, and the LED industry with strong growth in demand for downstream backlight sources.

However, Jin Zhonghe’s CEO Zeng Jun believes that in the economic transition period, the seven emerging industries advocated by the state have theoretically great room for development. However, from a realistic point of view, energy conservation and environmental protection are more urgent.