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Notice of the Anhui Provincial People's Government on the Issuance of the Anhui Province Shipbuilding Industry Adjustment and Revitalization Plan

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Notice of the Anhui Provincial People's Government on the Issuance of the Anhui Province Shipbuilding Industry Adjustment and Revitalization Plan Notice of the Anhui Provincial People's Government on the Issuance of the Anhui Province Shipbuilding Industry Adjustment and Revitalization Plan Wan Zheng [2009] No. 78 To all city and county governments, province departments, and directly-subordinate divisions: The Anhui Province Shipbuilding Industry Adjustment and Revitalization Plan is hereby issued to you. Please implement it earnestly according to the situations of individual regions and departments. People's Government of Anhui Province July 16, 2009 Anhui Province Shipbuilding Industry Adjustment and Revitalization Plan Shipbuilding is a comprehensive industry that provides technology and equipment for the shipping industry, ocean resource exploitation, and national defense. It is a powerful engine driving development and expansion of exports in other major industries, such as the iron and steel industry, the petrochemical industry, the light manufacturing industry, the textile industry, the equipment manufacturing industry, the electronics industry, and the information industry. It has great significance for improving employment, developing the economy, and ensuring coastal security. The Anhui Province Shipbuilding Industry Adjustment and Revitalization Plan (hereafter referred to as the Plan) has been formulated to comprehensively implement the national Shipbuilding Industry Adjustment and Revitalization Plan on the basis of industrial development plans for eight major industries that have already been published by the provincial government. The period for implementation of this plan is 2009- 2011, with long-term implementation extending to 2020. I. Situation and Circumstances of the Anhui Province Shipbuilding Industry (I) Industry Status Since the beginning of the period of the "11th Five-Year Period," by making full use of location and resource advantages, our province took the initiative to undertake the Yangtze River Delta shipbuilding industry shift and achieved rapid growth in the shipbuilding industry. As of 2008, our province has built a shipbuilding system composed of 107 companies with 36,000 direct employees, and has become a major national river shipbuilding base. First, rapidly increased shipbuilding capacity. The numbers of companies and cities that are capable of building 10,000-ton ships have increased from three to 31 and from one to six, respectively, with the largest model being a 57,300 deadweight ton bulk cargo ship. Shipbuilding capacity has increased from 500,000 to 1,300,000 deadweight tons. In 2008, the shipbuilding production volume was 1,214,000 deadweight tons; gross industrial output value was 6.07 billion RMB, increased by 102 percent compared to the previous year. Industry added-value was 1.86 billion RMB, increased by 133 percent. Export delivery value was 1.95 billion RMB, increased by 140 percent. Confirmed shipbuilding orders were 2,600,000 deadweight tons. Second, shipbuilding industry clusters have basically been formed. There are six clusters along the Yangtze River in Wuhu, Chaohu, Anqing, Maanshan, Chizhou, and Tongling, with the capability of building 10,000-ton ships. There are five clusters along the Huai River in Xuancheng, Bangbu, Fuyang, Huainan, and Liuan, with the capability of building 1,000-ton ships. The main products are river bulk cargo ships. The more advanced, high added-value varieties are 10,000-ton multipurpose bulk carriers, container vessels, petroleum tankers, chemical tankers, dredging boats, ocean tugboats, and cruise ships. These ships are exported to more than ten countries and regions in Europe, Africa, and Southeast Asia. Finally, basically established supporting enterprises for shipbuilding. The Anqing Ship Diesel Engine Company and Hefei Rongan Engine Company have become national bases for mid/low-speed diesel engines. Some of Anhui's shipbuilding products, such as ship steel, accommodation outfits, deck machinery, mooring equipment, deck outfits, cables, lightings, and paint, have rather high recognition nationwide and abroad. (II) Circumstances Faced With While our province is witnessing fast development of the shipbuilding industry, there are many problems emerging at the same time. The technology level, added-value, and indigenous research and development ability are low, development of supporting industries is slow, and backbone enterprises are lacking in advantages and talented personnel. In the second half of 2008, the ocean vessel market was badly hit by the effects of the global financial crisis. New shipbuilding orders began to decrease, ship delivery risks increased, and company financing became difficult to obtain. Our province was facing grievous consequences in the shipbuilding industry. It shall been seen that there are some comparative advantages through many years of development. The first advantage is our long shoreline. The Yangtze River runs through the province for 343 kilometers with 152 kilometers of shoreline suitable for shipbuilding, and 37 kilometers are used for shipbuilding presently, which is one quarter of the total. The second advantage is our abundant human resources. Our province is an agricultural province with a huge population with a large abundant agricultural labor force along the Yangtze River and the Huai River that will migrate. The labor cost is relatively low and the labor situation is favorable to shipbuilding labor requirements. The third advantage is our location. Our province is right next to the Yangtze River Delta and the Huanjiang city belt model zone for undertaking industry shift. Along with the implementation of our development strategy for accelerated growth, all these factors have greatly stimulated the shipbuilding industry along the Yangtze River and the Huai River, improved the cooperation and division ability to participate in the pan-Yangtze River shipbuilding industry development, and empowered the endeavor of carrying out a Yangtze River shipbuilding industry shift. II. Guiding Ideology, Basic Principles, and Goals (I) Guiding Ideology Thoroughly apply the scientific development concept; act in accordance with the general requirements of maintaining development, expanding domestic demand, and adjusting structures; focus on industrial upgrading and transforming the development model. Seize the opportunity of industry shift to pursue staggered development, secure shipbuilding orders, improve supporting industries, address operational risks, and ensure fast and stable development of the industry. Promote mergers and regroupings, optimize industry structure, foster major advantageous companies, and obtain a relatively high competitive advantage. Speed up technology transformation, improve indigenous innovation ability, develop and manufacture high-technology, high-added-value ships, foster new growth points, and establish a solid foundation for us to reach the goals of the "double thousands program." (II) Basic Principles 1. Secure shipbuilding orders and sustain growth. Actively deal with delivery risks such as delays and abandonments. Prevent large volume order cancellations, ensure in-time order completion from shipbuilding companies, and maintain stable and relatively fast growth. 2. Speed up indigenous innovation and improve capacity. Put efforts in technical renovation; encourage advantageous companies to research and develop high-tech, high added-value ships and key associated equipment. Improve overall production capacity and technical standard of our province’s shipbuilding industry. 3. Promote structure adjustment and speed up industry clustering. Speed up construction of concentrated shipbuilding areas, encourage companies to gather around each other, and optimize industry regional distribution. Vigorously foster some advantageous companies through merger and regroup, in order to improve competency. 4. Hold on to development opportunities and undertake industry shift. Hold on to the opportunities brought by HuanJiang city belt exemplary zone for undertaking industry shift, participate in the pan-Yangtze River shipbuilding industry cooperation and division. Promote introducing investment, optimize investment environment, and continue the good work on undertaking shipbuilding industry shift. (III) Plan Goals 1. Ship production to increase at a steady pace. By 2011, reach an annual ship production capacity of 4,500,000 deadweight tons; ship production volume should be 3500,000 deadweight tons, for an annual increase of more than 40 percent; gross industry output value should be 26 billion RMB, with an annual increase of more than 60 percent; industrial added-value should be 7.5 billion RMB, with an annual increase of more than 60 percent; and export delivery value should be seven billion RMB, for an annual increase of more than 50 percent. 2. Technical standards to be greatly improved. By 2011, make breakthroughs in high-technology, high-added-value ships, such as automobile carriers and roll-on/roll-off ships, as well as in marine engineering equipment and technologies. Cultivate six companies with new and advanced technologies and set up one national, industry-owned technology center and eight provincial, industry-owned technology centers. 3. Supporting industries to be greatly improved. By 2011, mid/low-speed diesel ship engines, accommodation outfits, deck machinery, and other key ship equipment to be greatly improved. Low-speed diesel ship engine production should reach one million horsepower, with a gross industry output value of two billion RMB; mid-speed diesel ship engine production to reach 800 units, with a gross
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