BEIJING - China is expected to approach the world with a 2016-2020 international production capacity cooperation plan in the second half of the year, according to China's top economic planner - the National Development and Reform Commission (NDRC).
Meanwhile, the Ministry of Commerce (MOC) and NDRC are co-working on making a 3-year action plan on the same theme, in which key areas, projects, and investment size for future capacity cooperation will all be made clear.
Apart from them, Chinese local governments are also competing to launch plans to enlarge capacity cooperation, after the words -- "capacity cooperation" was included for the first time in the report on the work of the government this year.
Xu Shaoshi, chairman of NDRC, said on the recently-held Forum on Global Production Capacity and Business Cooperation that China advocating international production capacity cooperation means combining China's quality production capacity and advantageous equipment with the key technologies and advanced equipment of developed countries as well as the urbanization and industrialization demand of emerging economies and developing nations.
From this aspect, capacity cooperation will not only inject new vitality into global economic recovery and healthy global economic growth, but also create new space for the Chinese economy to make progress while ensuring stability and produce new opportunities for businesses of various countries to cooperate for win-win situation, according to Xu.
-- Capacity cooperation not equal to exporting backward capacity
Capacity cooperation does not mean exporting backward production capacity and pollution to other countries.
Chen Yantai, vice head of China Small & Medium Business Research Institute said overcapacity was a relative concept and surplus capacity did not mean backward capacity.
Lv Zheng, professor at the Institute of Industrial Economics of CASS echoed the view on the forum, saying that the production capacity of China that participated in global competition was the most advanced production capacity in China and the saying that China "goes out" to export backward production capacity was impossible.
Ning Jizhe, deputy head of NDRC once said capacity cooperation between China and other countries should be done via matching supply with their development demands and appropriately transferring advantageous capacity to enhance industrial capacity of these countries.
A document on guiding international capacity and equipment manufacturing cooperation released by Chinese cabinet - the State Council in May 2015 outlined 12 competitive areas that can well meet global market demand, including steel, non-ferrous metal, building materials, railway, electricity, chemical, light textile, automobile, communication, engineering machinery, aviation, shipping and maritime engineering.
Zheng Jun, general manager of China-Africa Lekki Investment Ltd. said the twelve industries were a good choice as they were not only industries in dire need of transformation and upgrading domestically but also advantageous industries which were needed in other countries and could facilitate "going out" of projects, equipment and industries.
-- Transferring quality capacity to break down trade barriers
During the forum, Chinese firms inked 28 agreements involving 7.933 billion US dollars with enterprises or investment promotion institutions from Indonesia, Bangladesh, and Russia, upon robust demand for international capacity cooperation.
This stands as a sharp contrast to the past anti-dumping and anti-subsidy investigations encountered by Chinese firms in exporting solar panels to the European and the US markets.
Analysts attribute the reason behind the contrast to some countries' trade protection aiming to protect local industry and employment, stressing that if Chinese businesses change the past mass export of low-price commodities to whole-industrial chain cooperation, win-win situation will be realized for both Chinese and foreign businesses together with incomes and employment for related foreign countries.
-- Third-party market cooperation seen an important direction
Cooperation in third party market is becoming a new direction for international production capacity cooperation.
As early as in April 2015, Chinese Premier Li Keqiang said on a meeting on going out of made-in-China equipment and promoting international capacity cooperation that China and developed countries exploring the third party market would be things of mutual benefits.
Later in June 2015, China and France signed an agreement on cooperation in exploring the third party market.
Zhao Junjie, a researcher of the Institute of European Studies of Chinese Academy of Social Sciences said inking such a pact between China and France created new space for China to stabilize economic growth and adjust economic structure.
Apart from France, China is also seeking cooperation in exploring third-party market to further international capacity cooperation with Germany, ROK, etc.
As Chu Yin, associate professor of the University of International Relations, reckoned, conducting capacity cooperation via exploring the third-party market could produce new demand and complement China's soft power as some surplus capacity was caused by lack of related services.
Cooperation in exploring the third party market between China and developed countries can well combine the advanced technologies of developed countries with China's mid-end production capacity, which will upgrade China's industrial chains, increase export and employment of developed economies and bring lower-costing equipment and industrial lines for the third party markets.
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