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(Observation Tower) The interpretation and forward-looking forecast of the petrochemical industry revitalization plan and the strategic deployment to promote the overall upgrading of the petrochemical industry have finally been finalized. With the successive introduction of eight major industrial revitalization plans, the industrial adjustment and revitalization framework that will drive a new fulcrum for China's economy has begun to take shape. However, unlike other industry revitalization plans, we must stand on the * * The petrochemical industry revitalization plan should be viewed from the strategic level of energy supply and energy security. The petrochemical industry is concerned about * * The petrochemical industry is a large industry that is the lifeline of economic security and the economy. From energy and fuel supply to the production of tens of thousands of petrochemical products, it has penetrated into almost every aspect of the national economy and affects the stable and sustainable development of the economy. Therefore, the introduction of the petrochemical revitalization plan is of great significance. Taking a closer look at the petrochemical industry revitalization plan, although it is only a few hundred words, it is rich in connotation. The plan clearly requires maintaining the smooth operation of the industry, promptly organizing and implementing major refining and ethylene projects under construction, promptly implementing refined oil reserves, improving the energy product price formation mechanism, controlling the total volume, eliminating backward production capacity, and stopping the approval of coal chemical projects such as coke and calcium carbide that simply expand production capacity. Since there are many sub-sectors in the petrochemical and chemical industry, from a macro perspective, this plan is a strategic arrangement for the development direction of the entire industry. 1. Interpretation of the background of the petrochemical revitalization plan. The petrochemical revitalization plan is not simply to save the market, but will benefit the long-term. It should be said that in 2008, the global economy is currently experiencing the first real crisis since economic globalization. The impact of the financial tsunami on the domestic real economy continues to intensify, downstream demand continues to shrink, and the prices of raw materials and finished products fall accordingly. The shocking drop in international oil prices and the widespread spread of the financial crisis, as well as the multiple impacts of structural and cyclical adjustments and the global financial crisis, have brought unprecedented challenges to my country's petrochemical industry. On the one hand, the overall industry's cyclical downward risks are increasing. The 2008 analysis report recently published by the Petrochemical Industry Association pointed out that due to the slowdown in the growth of the real economy, weak domestic and foreign market demand, weakening demand for petrochemical products in building materials, automobiles, light industry, textiles, steel, electronics and other related industries, combined with the international financial crisis and the trough of the world's petrochemical boom cycle, the industry-wide profit of the petrochemical industry is expected to be 499 billion yuan in 2008, down 10% from 2007, and the number of loss-making enterprises has gradually increased. As of November, my country's petrochemical industry had 4,360 loss-making companies, accounting for 14.9% of the losses, a year-on-year increase of 0.4% ； The company's loss reached 160.595 billion yuan, a year-on-year increase of 605.6%. Among them, the profits of the three major oil companies were 222.8 billion yuan, down 31.3% from 2007. The ten-year growth of the petrochemical industry turned downward. On the other hand, with large-scale production reductions and shutdowns, and the overall market downturn, deep-seated problems in the petrochemical industry such as overcapacity and disorderly competition accumulated during the industry's upward cycle have emerged. This is particularly evident in the chemical industry. In recent years, my country's economic export-oriented growth has dominated the domestic chemical industry investment trend, resulting in serious overcapacity of primary chemical products on the one hand. Since the fourth quarter of last year, the domestic refined oil and chemical product markets have shown sluggish demand, falling prices, and high inventory levels that are difficult for companies to digest. Statistics from the Petrochemical Industry Association show that in the first three quarters of last year, my country's apparent consumption of refined oil increased by about 15% year-on-year, while it only increased by 1.9% in October. In November and December, it dropped 8.1% and 8.6% year-on-year respectively, marking the first negative growth since March 2007. The decline in consumer demand has led to sluggish sales and a large backlog of product inventories. As of the end of December, the country's ending inventory of refined oil products reached 12.64 million tons, an increase of 47.3% over the previous year. ； ； On the other hand, the development of high-end fine chemical products is weak and relies heavily on imports. Investment in heavy consumption bulk product projects is strong, while investment in fine product projects is sluggish. Facing the current pressure gathering period of cyclical decline, structural adjustment and the gradual deterioration of the global economic crisis, at this moment, the petrochemical industry not only needs expansionary incentive policies to "hedge" the industry's cyclical decline, but also needs strategic transformation to solve structural problems and improve the quality of petrochemical economic growth. It must be pointed out that in the process of transformation, the decline in growth caused by structural adjustment is a painful process that must be experienced. In the short term, it is difficult for the revitalization plan to change the cyclical decline of the petrochemical industry. This judgment was made because: First, the petrochemical industry is highly dependent on the macroeconomy. The current slowdown in economic growth is difficult to reverse and the weakening demand will continue. It is expected that the profit growth rate of the chemical industry will slow down significantly in the fourth quarter. In the next year, some sub-sectors will face a more difficult situation. ； Secondly, since crude oil pricing power lies overseas, domestic refined oil prices have not yet been fully market-oriented. There is a certain lag period in the adjustment of domestic refined oil prices compared with the rise and fall of international crude oil prices. In addition, the petrochemical industry is a typical cyclical industry. Therefore, the impact of the petrochemical industry revitalization plan on the industry may be limited in the short term. ； Third, according to the latest forecast of the International Monetary Fund (IMF), global economic growth will drop to 0.5% in 2009, 1.7 percentage points lower than the organization's forecast in November 2008, and the lowest growth rate since World War II. The global economic recession will * * Reducing the global economy's demand for petroleum and chemical products will have a direct impact on the export volume and price of domestic petroleum and chemical products. More importantly, the successive commissioning of large-scale petrochemical plants in the Middle East in 2009 will have a great impact on the domestic petrochemical industry. Therefore, even if the chemical and petrochemical industry rebounds, its intensity will be limited. 2. Three highlights of the petrochemical revitalization plan highlight its strategic significance. From a long-term perspective, the strategic significance of the petrochemical revitalization plan is far greater than its economic significance. The launch of the petrochemical industry revitalization plan featuring "overall planning, industrial layout, and structural adjustment" not only alleviates the current urgent needs, but also highlights the clear outline of a new round of overall industrial layout for China's petrochemical industry, which is conducive to the overall upgrading of the petrochemical industry. There are three major highlights worthy of attention at the strategic level:: Highlight 1: Structural adjustment and industrial upgrading are the main lines of the revitalization plan. First, the petrochemical industry will make adjustments to the upstream and downstream product structures, promote industrial upgrading through tax policies such as export tax rebates, and project financing discounts, and adjust products for companies with obvious excess production capacity. Extend the industrial chain, increase added value, and realize the transformation of resource advantages into industrial advantages and economic advantages. Secondly, on the premise of controlling the total volume, we must eliminate backwardness and jointly reorganize. From the perspective of the industrial chain, the petrochemical revitalization plan is on track * * The impact on the industry is limited and the impact on the next * * The industry impact is greater. At the same time, due to the long industrial chain of the petrochemical industry, the * * There are many small companies in the industry, so mergers, acquisitions, restructuring and industry integration are difficult. ； However, compared with large enterprises, through the elimination of backward production capacity, promotion of strong alliances and optimization and reorganization of enterprises, industrial concentration will be greatly increased, and accelerating the cluster development of the petrochemical industry will bring them good opportunities to become bigger and stronger. Highlight 2: The revitalization plan aims to improve my country's energy utilization efficiency. According to the recent calculations by the Institute of Quantitative Economics of the Academy of Social Sciences on the contribution rate of investment growth and productivity growth to output growth of my country's 30 industries from 2002 to 2007, the contribution rate of my country's oil and gas extraction industry to productivity growth was -1363.98, ranking 29th. Therefore, the plan mentioned in the plan to “vigorously promote technological transformation and promote comprehensive utilization of resources and waste recycling technologies” will form a comprehensive system for the research and development of oil and other energy extraction technologies by promoting innovation activities in key technologies, especially shared technologies, thereby greatly improving my country’s energy extraction and energy utilization efficiency. Highlight three: Arrange resources in advance and prepare strategic reserves for the next round of growth. The petrochemical planning plan mentions that my country will implement the strategic reserves of refined oil products step by step. This year and next year, the total reserve scale will be 6 million tons, and in 2011 it will be 10 million tons. Although the content of the oil reserve system is not mentioned, in the context that the global energy peak is approaching and world oil production has entered a plateau period, our country is actively accelerating the establishment of a modern oil reserve system and a sustainable energy system. The research report of the International IEA Organization points out that currently, from the supply side, due to the small increase in the amount of recoverable resources, especially high-quality reserves, the poor quality of new reserves, and the low replacement rate, 90% of the world's oil fields have entered a period of decline, and energy supply and demand are in a "fragile balance" state (as shown in the figure below). The International IEA predicts that global oil production will peak around 2012 ； Global natural gas production will reach its peak around 2020 ； Global coal production will reach its peak around 2046. Against this background, if the world's oil peak comes, world oil production will decline, the world energy market will inevitably face the risk of supply shortage, and human society will also face forced energy transformation. According to reports, the United States, Sweden, Canada, and Australia have taken measures and formulated outlines to deal with the arrival of energy peaks. 3. World oil production supply and demand ratio China’s strategic oil reserve aims to establish a three-level oil storage system. * * Reserves, local reserves, commercial reserves. Now * * The first phase of the reserve has basically been completed, and the progress of the second phase will almost be accelerated. ； For the three major oil companies, commercial reserve planning and construction have been carried out at the group level, and private enterprise levels may also gradually arrange to enter the commercial reserve system. Petroleum and petrochemical companies are taking precautions and making all preparations for the new development opportunity period of capital export and resource introduction. 4. Forward-looking prediction of strategic impact of petrochemical revitalization planning Historical experience shows that after every crisis, there will be major interest adjustments and major pattern changes. And every major external shock will evolve into a driving force for China's economy to reach a new level. It is expected that in the next 3 to 5 years, the development trend of my country's petrochemical industry will show the following characteristics: First, the development strategy based on the revitalization plan will promote a new era of petrochemical industry. * * develop. In the future, the growth rate of the petrochemical industry will be coordinated with the overall development speed of the national economy. The average annual added value will increase by about 15%. By 2011, the added value will reach 1.75 trillion yuan. The adjustment of industrial structure and layout has basically been achieved. The growth rate of industrial added value will reach 20%. The petrochemical industry will enter a new round of industrial development cycle. ； Secondly, as the adjustment of the structure and layout of the petrochemical industry is basically completed, the resource allocation in industrial clusters continues to improve, and institutional barriers are broken down, the development of the petrochemical industry will rise from an extensive model that simply relies on capital and labor to a refined model that relies on technological progress. ； Third, the financial crisis will cause global energy/petrochemical companies to face a reshuffle. Integration and reorganization within the industry are inevitable, which is both an opportunity and a challenge for our country. According to Thomson Reuters estimates, Chinese companies were active in overseas mergers and acquisitions in 2008, with the total amount of mergers and acquisitions increasing by 40% year-on-year to US$21.8 billion, second only to Germany. Make a bold move during the global economic downturn, use capital ties to actively promote the internationalization process of China's energy/petrochemical companies through restructuring, mergers and acquisitions, actively build strategic energy reserves, and ensure China's energy security. ； Fourth, with the future * * With large-scale investment in "short-term", "debt-type" and "adjusted" petrochemical infrastructure, the bottleneck of the petrochemical industry will be broken through, and the sustainable development capabilities of the entire industry and its ability to guarantee economic and social development will be enhanced. ； Fifth, the existing global energy production methods and energy pricing methods are in the process of transforming into a new energy system, and energy interest groups are engaged in the largest interest game in history. For example, the construction of China's strategic oil reserve base is accelerating. Whether it is the proposal of specific tasks or the design of macro policies, the idea of promoting the sustainable development of the oil and gas industry through the scale of resource acquisition, processing, supply, and use has become clear. The acceleration of the transformation of China's reserve management and the improvement of the modern oil reserve system will greatly change the supply and demand relationship and structure of international crude oil, and have a decisive impact on the global resource pricing system. Now the global energy structure is undergoing major changes under the impact of the financial crisis. China's foundation and ability to respond to crises are no longer what they used to be, and the petrochemical industry is fully capable of overcoming challenges and ushering in greater development.