How to Co-exist with Chemical Parks in the Yangtze River Economic Zone

Many professionals told economic reporters in the 21st century that the chemical industry is showing a trend of layout from along the river to the coast, from outside to inside the park. After the reduction of production capacity, the future market may be better. After the Xiangshui Chemical Industry Park was completely closed, the renovation of the chemical industry in Jiangsu Province has become a "big move". Recently, a document entitled "Jiangsu Province Chemical Industry Regulation and Promotion Plan" (hereinafter referred to as "Draft for Advice") has been circulated on the Internet.

The draft solicits opinions intends to significantly reduce the number of chemical production enterprises within 1 km along the main and tributaries of the Yangtze River, in environmentally sensitive areas, in densely populated urban areas, outside chemical parks and below the scale. As of the first quarter of 2017, there were 6884 chemical production enterprises in Jiangsu Province. Today, this number has been greatly reduced. According to official data of Jiangsu Province, in 2017 and 2018, more than 2600 chemical enterprises were shut down in Jiangsu Province.

Wang Zhizhong, Deputy Secretary-General of Jiangsu Provincial Government, said in September 2018 that over the next three years, 1000 chemical enterprises with serious potential safety hazards and environmental protection failures would be shut down. According to the Draft for Solicitation of Opinions, the closure of chemical enterprises will be significantly accelerated. By the end of 2020, the number of chemical enterprises in the whole province will be reduced to 2000, and will not exceed 1000 by 2022. In addition to Jiangsu, there are more than 400,000 chemical enterprises in the whole Yangtze River basin. After the sound water accident, many provinces are carrying out the investigation of potential safety hazards in chemical enterprises. Will the layout of the chemical industry be adjusted in the future? Many professionals told economic reporters in the 21st century that the chemical industry is showing a trend of layout from along the river to the coast, from outside the garden to inside the park. After the reduction of production capacity, the future market may be better. 

The draft for consultation specifies the layout of five types of chemical enterprises. 4447 chemical enterprises will be directly affected, and some of them will be suspended by 2020. Safety and environmental protection are the reasons for the closure. These enterprises are located within 1 km along the main and tributary of the Yangtze River and outside the chemical park. They are located in the first-class protection area of Taihu Lake. They are within 1 km on both sides of the Beijing-Hangzhou Grand Canal (East Route of South-to-North Water Transfer) and Tongyu River Clear Water Channel, and the safety and health protection distance in densely populated urban areas is not up to the standard.

"As long as enterprises meet safety and environmental protection standards and conform to national industrial policies, the government supports development." People from relevant departments in Jiangsu Province who worked out the documents told reporters on economic reports in the 21st century on April 8.

Industry people who know about the drafting of the document also indicated that the relevant government departments are improving the plan for the 21st century economic report. The chemical industry in Jiangsu Province is the second largest industry in Jiangsu Province. In 2017, the total output value of the chemical industry in Jiangsu Province exceeded 2 trillion yuan, accounting for 13.3% of the total industrial economy of the province and 15% of the total national chemical industry.

"The chemical industry in Jiangsu has the characteristics of large volume, large number of enterprises and scattered distribution." The above industry people who know the drafting of the document said. Wu Fuxiang, a researcher at the Yangtze River Industrial Economic Research Institute of Nanjing University, wrote in August last year that more than half of the small and medium-sized chemical enterprises in Jiangsu are scattered outside the chemical park. Energy and resources utilization efficiency is generally low, technology and equipment technology are simple, making the production, storage, transportation and other links of security and environmental protection hidden dangers prominent.

Then, what impact will this rectification have on the chemical market? A person from a multinational chemical enterprise in Suzhou told reporters, "This round of rectification will only benefit large chemical enterprises, and the elimination of irregular and substandard enterprises will benefit the upgrading of the industry." Wang Haihui, senior economist of the Nanjing Branch of the People's Bank of China, and others surveyed 180 chemical enterprises in 9 cities of Jiangsu in 2017, and found that small and micro enterprises were the main ones shut down in this round, which had limited impact on regional chemical production capacity. For example, 36% of the total number of closed enterprises in a city, only 1.88% of the tax revenue, and the average annual output value of a single closed enterprise is only 9.24 million yuan.

Wang Haihui and others also found that with the environmental protection rectification of enterprises reaching the target, the later production capacity will continue to release, and the impact of environmental protection rectification on the production capacity of the province will gradually fade. Environmental protection has led to contraction of supply in the industry, sharp rise in the price of chemical products, and improvement in the profitability of enterprises. How should chemical enterprises layout not only in Jiangsu, but also along the Yangtze River. It is reported that there are more than 400,000 chemical enterprises in the Yangtze River Basin, with chemical output accounting for about 46% of the country's total.

Many places are taking measures such as "closing down and transferring" to protect the river with iron wrist. For example, by December 31, 2020, Hubei plans to complete the relocation of chemical enterprises within a kilometre of the Yangtze River. Recently, Yichang City has carried out special inspection on soil pollution risk management and control for 30 closed and 2 relocated chemical enterprises to closely guard against potential environmental risks of the sites left behind by the closed and relocated enterprises.

Shandong Province, a major chemical industry province, is also carrying out emergency actions to investigate and rectify potential safety hazards of hazardous chemical enterprises. As of April 1, 4050 enterprises have been inspected, 22504 problems and hidden dangers have been found, and 121 enterprises have been ordered to stop production and rectify. For chemical enterprises, there is a trend of distribution from rivers to coastal areas, from outside to inside the park. In 2017, 24 of the 54 chemical parks (concentrated areas) in Jiangsu Province were distributed in 8 cities along the Yangtze River.