Fujian Deepens Petrochemical Industry Cooperation with Taiwan

On March 27, Ni Yuefeng, Vice Governor of Fujian Province, attended the Petrochemical Industry Cooperation Symposium held in Taipei. He and over 40 representatives from Taiwan's petrochemical industry, including Chen Wuxiong, chairman of the Taiwan Industrial Association, engaged in in-depth communication and discussions on further promoting petrochemical industry cooperation between Fujian and Taiwan, as well as issues related to site planning, project advancement, and upstream and downstream integration in the development of the petrochemical industry in Fujian and Taiwan.

　　In recent years, Fujian has been committed to building itself into a major petrochemical province. As early as 2000, the petrochemical industry was listed as one of the three major pillar industries to be cultivated in Fujian. The "Development Plan for the West Bank Economic Zone" approved by the State Council in 2011 proposed that, following the principles of base-building, large-scale development, and intensive development, the petrochemical industry chain should be rationally planned, extended, and improved, accelerating the construction of petrochemical bases in Meizhou Bay and Zhangzhou Guli to form a nationally important petrochemical base along the coast. It also actively promotes deep processing and comprehensive utilization of petrochemicals, driving the development of upstream and downstream industries.

　　While Fujian Province is accelerating the development of its petrochemical industry, Taiwan's once-booming petrochemical industry has encountered development bottlenecks. Zhou Huaixin, a supervisor of the Taiwan Petrochemical Association, previously stated in a media interview that Taiwan's petrochemical industry has a highly developed and mature market, forming a complete production system from downstream product processing, petrochemical intermediate and basic raw material production, to upstream raw material refining. However, factors such as labor shortages, high labor costs, and a small domestic market have constrained the development of Taiwan's petrochemical industry.

　　Under the combined effects of various factors, the development of Taiwan's petrochemical industry has been limited, making relocation an inevitable trend. Fujian, located just across the water, has become the preferred location for the relocation of Taiwan's petrochemical industry due to its advantageous location and its emphasis on the development of the petrochemical industry, creating an opportunity for cooperation between the two sides.

　　In 2009, during an economic and trade exchange visit to Taiwan led by Ye Shuangyu, Vice Governor of Fujian Province, a memorandum of understanding on exchange and cooperation was signed between the petrochemical industries of Fujian and Taiwan. According to the memorandum, the Taiwan Petrochemical Industry Association will establish a special representative office in Quanzhou, Fujian, specifically responsible for organizing, coordinating, and handling cooperation matters in the petrochemical industry between Fujian and Taiwan. Yang Biao, then director of the Fujian Provincial Department of Foreign Economic Relations and Trade, stated that the signing of this memorandum will make communication between the petrochemical industries of Fujian and Taiwan smoother, laying the foundation for future in-depth cooperation.

　　When Su Shulin, Governor of Fujian Province, led a Fujian-Taiwan cooperation exchange group to Taiwan for economic, trade, and cultural exchanges, cooperation between the petrochemical industries of Fujian and Taiwan once again became a focus of media attention. At the "Fujian-Taiwan Cooperation Development Dinner" on March 26, Chen Wuxiong said that Su Shulin is a petrochemical industry expert, and that the Taiwan petrochemical industry is facing difficulties. Now, there is an opportunity to cooperate under the leadership of the West Bank Economic Zone, which is not only an extension of cross-strait relations but also a milestone in the sustainable development of Taiwan's petrochemical industry.

　　Su Shulin stated that the cooperation between the petrochemical industries of Fujian and Taiwan is currently undergoing discussions and preparations, and that the Guli petrochemical base has been included in the Twelfth Five-Year Plan and is currently undergoing preliminary planning. Su Shulin said that this year's efforts will focus on completing the feasibility study of the Guli petrochemical base project, verifying its economic feasibility, and conducting environmental impact assessments. Upon completion, the project is expected to be further finalized.

　　The Guli petrochemical base has attracted much attention from the Taiwan petrochemical industry. Senior executives from Formosa Plastics Group and over 20 large-scale Taiwan petrochemical companies organized by the Taiwan Petrochemical Industry Association have successively visited Guli for on-site inspections and coordination. Currently, Taiwanese petrochemical companies are flocking to discuss investment and construction matters, with 14 projects already under construction, with a total investment of 29.4 billion RMB. In August 2011, Fujian Province, China Petrochemical Corporation, and Guli Petrochemical Company (a Taiwanese-funded company) signed a "Framework Agreement on the Joint Construction of a Cross-Strait Refining and Chemical Integration Project." This project is initially planned to include a refinery with an annual capacity of 16 million tons of crude oil, a 1.2 million-ton ethylene cracker, and 26 downstream petrochemical plants, with a total investment of approximately US$4.5 billion, and is expected to be completed and put into operation in 2014.

　　Exchanges between Fujian and Taiwan are deepening, and the conditions for cooperation in the petrochemical industry are becoming increasingly mature. At the symposium, Ni Yuefeng offered several suggestions for future cooperation between the two sides. He stated that to further jointly promote the upgrading of petrochemical industry cooperation, both sides should: 1. Cherish the opportunities. Cross-strait relations are in a good period of peaceful development, providing a rare opportunity for the development of the petrochemical industry in Fujian and Taiwan. At the same time, the petrochemical industries in Fujian and Taiwan have strong complementarity and a good foundation for cooperation; 2. Strengthen cooperation. Fujian and Taiwan have already established smooth communication channels and a good cooperation mechanism, which should be continuously strengthened and improved; 3. Accelerate planning. Through technical adjustments and improved assessments, ensure the expected progress of the projects; 4. Protect the environment. In the process of promoting and constructing petrochemical industry projects, always prioritize environmental protection and strive to build an ecological petrochemical park.