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National Development and Reform Commission, Ministry of Finance, Ministry of Commerce, Ministry of Land and Resources, General Administration
of Customs, State Administration of Taxation, State Environmental Protection Administration
Circular concerning the Measures to Control the Export of Products of High Energy Consumption, High Pollution and Resource
Fa Gai Jing Mao [2005] No. 1482
Departments of finance, departments of land and resources (departments of land and resources, bureaus of land and resources, land,
resources & housing administrative bureaus, real estate land and resources administration bureaus, programming &land and resources
bureaus), the Guangdong Sub-Administration of the Customs General Administration, Tianjin and Shanghai Special Commissioner’s of
Tianjin and Shanghai Office in all provinces, autonomous regions, municipalities directly under the central government, cities specifically
designated in the state plan, development and reform commission of Xinjiang Production and Construction Corps and the customs directly
under the General Administration of Customs, state tax bureaus and environmental protection bureaus (departments):
In light of the spirit of plenary meeting of the State Council, the central government has since May of this year taken measures to
control the export of part of the precuts of high energy consumption, high pollution and resources. In order to do it well, the matter
of concern is hereby given as follows:
1.
The necessity to control the export of products of high energy consumption, high pollution and resources
In recent year, the excessive investment in such industries as steel, cement, electrolytic aluminum, coke, aimless extension of the
yield, the surge of export of high-energy-consumption, high-pollution and resources products such as billet, steel ingot, electrolytic
aluminum, ferroalloy, part of the non-ferrous metal intensified the relations between domestic energy, raw material, transportation
and exerted more pressure on resources and environment. In 2004, the export of billet, steel, unforged and unrolled aluminum, ferroalloy
and coke registered 6.058 million ton, 14.23 million ton, 1.68 million ton, and 15.01 million ton, an increase of 312.1%, 104%, 34.8%,
20.5% and 2% respectively on year-on-year basis; that in the first half of this year increased by 262.4%, 154.1%,21.9%, 17% and 16.2%
respectively. In addition, such non-ferrous metals as zinc, tin, antimony and such high-energy-consumption, high-pollution and resources
products as phosphorus yellow and calcium carbide boasted a surge of export.
The massive export of high-energy-consumption, high-pollution and resources products intensified the conflict between coal, electricity
and oil and exerted greater pressure upon the environment. In 2004, the production of unforged and unrolled aluminum, billet, steel,
ferroalloy and phosphorus yellow for export consumed 49 billion kw, accounting for 82% of the electricity shortage, and even more
without the consideration of whole process of transport and electricity consumption. The high-energy-consumption products are largely
at the cost of serious environmental pollution, such as waste air and water released in the process of coke production, fluoride
set off in electrolytic aluminum and industrial dust in ferroalloy. Some electrolytic aluminum and billet enterprises were located
in the hinterland so that the exported material from the southeast regions had to be transported to the middle and the western region
and the finished products had to be transported to the southeast offshore area for export, which exerted greater pressure upon transport.
The massive export of high-energy-consumption, high-pollution and resources products overloaded upon the exterior conditions as energy,
resources, environment, and transport, and had side effect upon the sound and steady operation of our national economy. To control
of the export of high-energy-consumption, high-pollution and resources products was utterly necessary for the implementation of scientific
development outlook, reduction of environmental pollution, freeing the economic development from resource limit and alleviating the
tense relations among coal, electricity and oil.
2.
Measures to control the export of high-energy-consumption, high-pollution and resources products
Since this year, the relevant authorities with the approval of the State Council took a series of measures to set a limit of the export
of high-energy-consumption, high-pollution and resources products.
(1)
Axing the total export volume. The export quotas of coal was reduced from 0.1 billion tons in 2003 to 80 million tons in 2005, that
of raw oil from 5 million tons in 2003 to 1 million ton in 2005, and that of coal from 14.72 million in 2004 to 14 million in 2005.
(2)
Abolishing or reducing tax refund of part of the products. On January 1, 2005, the tax refund of such high-energy consumption products
as electrolytic aluminum, ferroalloy, phosphorus yellow, calcium carbide was abolished, in April, that of the primary products of
steel was annulled and the tax refund of steel was reduced from 13% to 11%, On May 1, that of rare earth metal, rare earth oxide,
rare earth salt, silicon metal, molybdenum ore and concentrate, light and dead burnt magnesite, fluorite, talcum, silicon carbide
and part of the processed timber was abolished; that of coal, zinc, tungsten, tin, antimony and their finished products reduced to
8%. On August 1, the tax refund of electrolytic manganese was abolished.
(3)
Levying export tariff. From January 1 of this year, export tariff was imposed on carbamide and tax of unforged and unrolled aluminum
was 5%. From June 1, the provisional duty rate for exported phosphorus was raised from 10% to 20 %, that of ferrosilicon from 0%
to 5%.
(4)
Stopping processing trade. The central governmental listed successively such products as coal, coke, phosphorous yellow, steel into
the forbidden category of processing trade, on August 22, alumina, ferroalloy mine was planned to be listed in and new processing
trade contract was scheduled to be stopped.
3.
Doing well the implementation of the supporting measures concerning alumina and ferroalloy mine processing trade.
In recent years the investment in electrolyte and ferroalloy industry surged, so does its yield. Stopping the alumina processing trade
was conducive to the reduction of import of alumina and export of electrolyte aluminum, decline of the price of alumina in international
market, recovery of alumina in international market and recovery of its price in the domestic market, as well as the creation of
a fairly competitive market, which was generally beneficial for the electrolyte and ferroalloy market. However, considering that
the supply of electrolyte and ferroalloy exceeded its market demand, the whole industry was generally in difficulties and losses
occurred in some enterprises. Therefore, the relevant authorities in all regions shall do well its work to overcome the difficulties
in electrolyte and ferroalloy industries.
(1)
The processing trade contract approved prior to the stop hereof shall be allowed to be completed. After having listed the export of
alumina and ferroalloy into the forbidden processing trade, the central government will no longer examine and approve new processing
trade control, as for the processing trade contract having been approved by the authorities in charge of commerce and recorded in
the files of the customs, they shall be allowed to be completed in accordance with the current processing trade policy.
(2)
To research some relevant tariff policy. The relevant tariff policy shall, with the combination of the formation of tariff policy
of next year, be researched and studied in the interest of the protecting domestic resources, encouraging the export of resource
products, facilitating the sound development of electrolyte aluminum and ferroalloy
(3)
To perfect the electricity price formation system of high-energy-consumption enterprises. The policy concerning differential electricity
price shall be continued. The price between different voltages class shall be widened, raising the price of low voltage class and
reducing the price of high voltage class. The direct supply and joint operation between electrolyte aluminum enterprises and electricity
ones in the areas rich in electricity shall be undertaken to reduce the cost of electrolyte aluminum. The policy concerning peak
and bottom electricity price shall be perfected and implemented to widen the price difference between electricity peak and electricity
bottom and to reduce the production cost of ferroalloy.
(4)
To perfect the credit policy. The implementation of national macro policy such industries as steel, electrolyte aluminum, coal and
ferroalloy shall be evaluated comprehensively, the industrial investment warning as well as the relevant policy direction be strengthened
so as to master the loan investment orientation and offer effective support to such enterprises and project as accords with national
industrial policy and credit principle.
(5)
To make great effort to maintain social stability. All the relevant authorities shall put into practice the relevant supporting measures
and help the enterprises to solve their difficulties and problems. It is imperative to understand and comprehend promptly the enterprise
operation, to study earnestly the problems occurred after the suspension of processing trade and submit them to the relevant higher
authorities in time.
National Development and Reform Commission
Ministry of Finance
Ministry of Commerce,
Ministry of Land and Resources
General Administration of Customs,
State Administration of Taxation
State Environmental Protection Administration
July 28, 2005
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