China Council for the Promotion of International Trade (ccpit) 2009 Preface

Policy Environment

1.2.3Government Comes up with the Light Industry Revival Policy

The State Council officially issued the Readjustment and Revival Plan for Light Industry on May 18, 2009. China’s light industry undertakes the important tasks of bringing about a booming market, increasing export, increasing employment opportunities and serving the undertakings related to agriculture, farmer and rural area. Light industry is very important, and plays a decisive role in economic and social development. Since the beginning of 21^st century, China’s light industry has undergone rapid development, and gained significant improvements in enterprises’ size and strength. The competiveness has improved continuously and boasts noticeable benefits of creating jobs and benefiting agriculture-related undertakings. As an action program of the comprehensive measures for the light industry, the Plan was developed to cope with the impacts brought by the global financial crisis, fulfill the requirements of the central government and the State Council of ensuring growth, expanding domestic demands and adjusting structure, ensure steady development of the light industry, speed up structural readjustment and promote industrial upgrade. The planning period is from 2009 to 2010.

The Readjustment and Revival Plan for Light Industry includes the status quo of the light industry and the situations facing it, guiding theories, fundamental principles and goals, as well as the major tasks of industrial readjustment and revival. The implementation of the policies, measures and plans are divided into five sections. Specific measures and actions have been defined for each section. The Plan provides a direction for the development of China’s light industry in the coming three years.

The major policies and standards defined for China’s light industry in 2008 are listed as follows:

★ On December 22, the SAC issued the national standards on sports drinks, providing the definition of sports drinks, related technical requirements, testing methods, inspection rules and requirements on label, package, transport and storage.

★ On December 1, the Chinese Light industry Federation began to implement the industrial standards on the paper based intaglio prints for decorating. Surveys on, collection of, analysis and researches on quality requirements of the paper based intaglio prints for decorating have been conducted to develop the industrial standards. Meanwhile, regulations on classification, requirements, testing methods, inspection rules, mark, package and transport are defined in the standards.

★ On December 1, the SAC approved to issue the national standards on product of geographical indication - Dehua white porcelain (GB/T21998-2008) as the 14^th announcement in 2008, defining product of geographical indication - Dehua white porcelain, product classification, quality of raw materials, requirements on production techniques, product quality level, testing methods, inspection rules, and requirements of product symbol, package, transport and storage.

★ On November 19, 13 departments including the SDRC and the AQSIQ developed the Dairy Industry Rectification and Revival Program, providing plans for dealing with the infant milk powder accidents, solving the difficulties and deep-seated problems facing the dairy industry and promoting the steady and healthy development of the dairy industry.

★ On October 7, the AQSIQ and the SAC began to implement the Testing Methods on Melamine Contained in Raw Milk and Dairy Products, defining several kinds of methods to identify melamine.

★ On October 1, the SAC issued the Standards on Quality and Safety Control on Exported Tea, defining detailed regulations on each steps from production to export of tea. In addition, management on source of tea, including management on tea plantation and primary processing as well as pre-warning for export and recalling system, has been added in line with current situations.

★ On October 1, the SAC began to implement the General Standard for Labeling of Prepackaged Alcoholic Beverage. Warning words shall be appear on the labels of the alcoholic beverage, alcohol concentration of which is higher than 0.5, including beer, wine, fruit wine and liquor.

★ On September 1, the SAC issued the national standards, Requirements of Restricting Excessive Package for Foods and Cosmetics, defining requirements of restricting excessive packaging for foods and cosmetics and the calculating methods for limited indexes. Interspace ratio, package layers and packaging cost are compulsory requirements.

★ On September 1, the Chinese Furniture Association, the Chinese Furniture Standardization Center and some other institutes began to implement the Standards on Valuable Hardwood Furniture in Deep Color. Valuable hardwood furniture in deep color refers to the furniture featuring mahogany culture. Besides the 33 kinds of rare tree species listed in the original standards on mahogany or some kinds of tree species adopted to make furniture since Ming or Qing Dynasty, the valuable woods or high-quality imported woods listed in the Names of Chinese Main Imported Woods and the Names of Chinese Main Woods are covered in the definition of mahogany culture.

★ On June 1, the Ministry of Health began to implement the Hygienic Standards for Uses of Food Additives, defining categories and application range of food additives. Food additives are classified into 22 categories, 1,812 kinds including 290 kinds of additives, 1,528 kinds of spices, 149 kinds of processing aids and 55 kinds of gum bases.

★ On May 1, the AQSIQ and the SAC began to implement standards on food stuffing, defining comprehensive standards on food stuffing in terms of requirements on raw and supplementary materials, sensory requirements, chemical and microbial index and hygienic index. The standards also provide testing methods, inspection and decision rules.

1.2.4Industry Planning

In order to carry out the Scientific Outlook on Development, speed up structural adjustment and economic growth mode of the light industry and promote the sustainable, healthy and coordinated development of the light industry, the Chinese government has developed the 11^th five-year development plan for the major light industries from 2006 to 2010 to define guiding theories, development goals, development priorities and major tasks of the light industry.

1. Food Manufacturing Industry

In October 2006, the SRDC, the Ministry of Agriculture, the Ministry of Science and Technology and the Chinese Light Industry Federation jointly issued the 11^th Five-Year Plan for Food Industry. The Plan defines eight industries as the major sectors of the food industry, namely, grain processing industry, edible vegetable oil processing industry, fruit and vegetable processing industry, meat processing industry, fish processing industry, dairy processing industry, beverage manufacturing industry and sugar refining industry.

Figure 3 1 Major Goals for China’s Food Industry during the 11^th Five-Year-Plan Period

Category	Index	2005	2010	Annual Average Growth Rate（%）	Attribute
Speed and effectiveness	Total output (100 million yuan) Profits and taxes (100 million yuan) Ratio between output of the food industry and output of the agriculture	20345 3365 0.5:1	40900 6768 0.8：1	15 15	Expectation
Enterprise structure	Enterprises with sales revenue exceeding 10 billion yuan (number) production concentration of top 100 enterprises (sales revenue, %)	>10 25.6	>20 >30		Expectation
Science and technology	contribution rate of technical advance (%) Proportion of production equipment adopting micro-electronics and IT (%)		40 50		Expectation
further processing and Multipurpose utilization	Proportion of processed food in food consumption (%) Proportion of output of the food processing industry and food manufacturing industry (%)	35 68	40 70	[5] [2]	Expectation
Public nutrition condition	Energy intake (1000 calories/day) Protein intake (g/day) Fat intake (g/day)	2250 66 76	2300 75 70		Expectation
Resource and environment	Decrease of energy consumption per unit of output (%) Decrease of energy consumption per unit of industrial added value (%) Comprehensive utilization ratio of industrial solid wastes (%) Decrease of emission of major pollutants (%)		20 30 >80 >10		restriction
Note: the total output as well as the profit and tax of the food industry is based on the prices of 2005, and the mark [ ] means the number is the accumulative amount of the five years 。

Policies and measures defined for development of the food industry: to promote innovation in mechanism and system as well as enhance macro-control, planning and guidance; to make more investments in the food industry for technological advances to boost the motive force for development; to build production bases of high-quality farm produce to satisfy the demands of the food industry for raw materials; to speed up the readjustment on product portfolio and strive to foster renowned trademarks in the food industry; to foster and strengthen leading enterprises in the food industry to promote the upgrade of the industrial structure; to take positive measures to carry out the opening-up strategy to constantly expand development domain; to enhance the management on food standards and make more efforts to implement the standards; to diversify investment targets to investment more in the food industry through several channels; to play the role as an intermediary agent and enhance self-discipline of the food industry; to offer generous support to the development of the food processing industry during the transition period of the cities facing resource exhaustion and make the industry an important industry offering jobs for those from other industries. Additionally, the central government will provide necessary support in finance, tax and capital.

2. Plastic Manufacturing Industry

China has already become one of world’s giant plastic manufacturers. China’s plastic industry has gained noticeable achievements since the beginning of the 21st century, and the major economic indicators have witnessed two-digit growth. The total output ranks first in the light industry, export fifth. The industry has become the pillar for the sound development of China’s economy.

The goal of the plastic industry during the 11^th Five-Year-Plan period (2005-2010) is to optimize and upgrade industrial structure as well as strive to improve industry-related technologies. The annual growth rate of the output of plastic products shall reach up to 10%, and the annual growth rate shall be 8% from 2010 to 2015. Therefore, the total output of plastic products shall be 35 million and 50 million tons respectively in 2010 and 2015. The industry plans to double the total output of plastic products in 10 years.

The plastic industry plans to: maintain steady and rapid development during the 11^th Five-Year-Plan period; insist on the Scientific Outlook on Development; speed up structural readjustment and transform of economic growth mode; embark on a road to sustainable development; focus on independent innovation on the basis of scientific development; make more efforts on R&D of new equipment, new material, new technique and new product; insist on the people-oriented principle and readjust the development outlook; make greater efforts to foster large-sized enterprise groups; cultivate renowned brands and participate in global competitions; cut down on consumption of materials and energies as well as commit clean production through promoting technological advances and enhancing scientific management, making the plastic industry embark on the road for harmonious and sustainable development.

3 Papermaking and Paper Product Industry

The papermaking industry is one of the important industries providing elementary raw materials for the national economy. Consumption level of paper and paper board has become an important indicator measuring a country’s level of modernization and civilization. China’s output and consumption volume of paper and paper board rank second in the world, following the US. China has already boasted considerable influence in the competition of global papermaking industry. The major indicators and requirements on initial sizes of projects for China's papermaking industry during the 11^th Five-Year-Plan period are as follows:

Figure 3 2 major indicators for the development of China's papermaking and paper product industry during the 11th Five-Year-Plan period

Category	indicator	2005	2010	Annual growth (%)	attribute
development speed	Total output of paper and paper board (10,000 tons)	5600	7600	6.3	expectation
	Totral consumption volume of paper and paper board (10,000 tons)	5930	8500	7.5	expectation
resource consumption	Comprehensive energy consumption per ton of pulp, paper and paper board (tce)	1.38	1.10	-4.4	restriction
	Average water consumption perton of pulp, paper and paper board (cubic meter)	103	80	-4.9	restriction
environmental protection	Total emission of the major pollutant of COD to reduce by 12.5%				restriction

Major policies and measures include: to define development policies for the papermaking industry and regulate the order of market development; develop recycling economy and carry out plans and development policies defined for the papermaking industry; define and revise relevant standards and enhance resource saving and pollution control; play the role as an intermediary and improve self-discipline of the industry.

4 The Furniture Manufacturing Industry

Since 2000, China’s furniture manufacturing industry has gone through the rapidest development in its history. Furniture production has witness the trend of rapid growth. The goal of the furniture manufacturing industry during the 11^th Five-Year-Plan period is to: optimize industrial structure and achieve specialized division in the industry; build a complete industrial chain from production supply to product sale; form an industrial pattern with complementary product structure and specialized production and cooperation while large-sized enterprises playing a leading role and medium- and small-sized enterprises as the major players; improve the overall management of furniture manufacturers and the industrialization level of furniture production; strive to lower production cost and improve productivity in the furniture industry to catch up with those developed countries; furniture output to maintain an annual growth rate of about 15% and the output value of 2010 to be double of that of 2005; ensure domestic consumption of furniture and satisfy export demands to lay the foundation for becoming a giant furniture manufacturer; furniture export to maintain an annual growth rate of 20%; increase export volume, readjust structure of exported products, continue to explore international markets and improve added value of exported furniture; in line with the requirement to build a harmonious society with the people-oriented principle, pay more attention to harmonious economic and social development, further enhance self-discipline in the industry, attach importance to environmental protection and social responsibility, regulate the competition order and market order for the industry.

 The major measures adopted to achieve the goal including: insisting on independent innovation and improving management on furniture production; readjusting industrial structure and product structure to form an industrial development pattern in accordance with the requirements for a conservation-oriented society; carry out various exchange programs for furniture designs to encourage the establishment and development of furniture design firms and furniture design research centers; make greater efforts on quality standards, while encourage enterprises to commit ISO quality certification and improve their management on quality; enhance international exchange and cooperation as well as import internationally advanced technologies and management expertise; make positive efforts to organize successful international furniture exhibitions.

5 Leather, Furs, Down and Related Product Industries

As an important part of the light industry, China’s leather industry will continue to take on the tasks of enriching the light-industry product market, expanding domestic demands, increasing accumulation, earning foreign exchange through export, creating jobs for urban and rural labor force, promoting continuous and steady development of farming and animal husbandry, and building a harmonious society. China’s leather industry covers the main sectors of tanning, shoe-making, leather garment, leather items, fur and related products as well as supporting sectors including leather machinery, leather chemicals, leather hardware and auxiliary material. Playing an important role in earning foreign exchanges, increasing residents’ income and creating jobs, the leather industry has become a competitive industry in the global market with a complete industrial chain, higher consistency between upstream and downstream products.

The goal of the leather industry during the 11^th Five-Year-Plan period is to: put control on output growth and encourage improvement of products’ added value; maintain an annual growth of 10% in its total output value; put control on export volume and encourage increases of export prices; maintain an annual growth of 10% in the foreign exchanges earned by the industry through export; achieve significant increases in utilization rate of resources; reduce the energy consumption per unit of GDP by 20% compared with the end of the 10^th Five-Year-Plan period; put more effective control on environmental pollution and increase production without increasing pollution; foster 3-5 world-renowned brands by 2010 or even later. The core lies in two aspects. One is to improve the overall quality of China’s leather industry, and the other is to encourage Chinese leather enterprises to foster world renowned brands.

Measures and recommendations for the leather industry: ensuring quantity and quality of raw hide is the foundation for the sustainable development of the leather industry. During the 11^th Five-Year-Plan period, the leather and fur industries will continue to rely on domestic resources for supply of the raw materials needed by them. Improvement in capability of independent innovation will be regarded as the strategic foundation for the development of the industry, and play a key role in readjusting industrial structure and transforming growth mode; developing independent brands is the first step to readjust industrial structure and transform growth mode; leather identity and environmentally-friendly leather form the platform to foster brands for the industry, as well as the carrier for self-discipline of the industry; enterprises are the major players in building independent brands and implementing the guideline of “going globally”; areas with suitable conditions will be encouraged to bring aggregation effect into full play; competitive enterprises will play a leading role, encouraging other related enterprises to carry out cooperation and offer support to gain joint development and form industrial regions with the unique characteristics of the leather industry; industrial regions with the unique characteristics of the leather industry will become the leading force and major battleground for readjustment of industrial structure and transformation of growth mode; efforts will be made to save energies and reduce energy consumption and enhance environmental protection; new modes of tanning and fur processing will be figured out to build an environmentally-friendly and resource-conserving leather industry and embark on the road of recycling economy; new growth points will be identified on the basis of expanding domestic demands to achieve the transformation from relying on export-driven to being driven by coordination between domestic and foreign demands; active efforts will be made to foster diversified specialized markets home and abroad as well as lay the foundation for becoming a giant leather manufacturer. With the direction offered by the Scientific Outlook on Development and the 11^th Five-Year Plan, the industry should proceed with confidence and strive for innovation to initiate new prospects for the development of the leather industry and fulfill the ambitious goal of becoming a giant leather manufacturer as soon as possible.