• Ethanol: restrictions on foreign capital access to corn deep processing and fuel ethanol were lifted

Ethanol: restrictions on foreign capital access to corn deep processing and fuel ethanol were lifted

As early as 2007, the use of corn deep processing industry was opened, leading to a sharp increase in the price of corn. Because the price rose too fast, in order to ease the conflict between the deep processing industry and the feed breeding industry, the country decided to limit the scale of corn deep processing, and control the proportion of the scale of corn deep processing industry in the total corn consumption to less than 26%; Moreover, all new and expanded corn deep processing projects must be approved by the investment department of the State Council. The Opinions issued in the same year are as follows:

 

On September 5, 2007, the National Development and Reform Commission issued the Notice on Printing and Distributing the Guiding Opinions on Promoting the Healthy Development of the Corn Deep Processing Industry (FGY [2007] No. 2245), which proposed that corn deep processing projects should be included in the restricted foreign investment industry directory. During the pilot period, foreign investors are not allowed to invest in biological liquid fuel ethanol production projects, mergers and acquisitions.

 

Ten years later, the Ministry of Commerce of the National Development and Reform Commission issued a document to cancel the restrictions on foreign investment access in fields such as corn deep processing and fuel ethanol:

 

On June 28, the National Development and Reform Commission and the Ministry of Commerce jointly issued a document stating that the Catalogue for the Guidance of Foreign Investment Industries (Revised in 2017) has been approved by the CPC Central Committee and the State Council, and is hereby issued and will come into force as of July 28, 2017.

 

It took ten years for corn deep processing and fuel ethanol to complete a magnificent reversal. It seems that after the implementation of the Catalogue, it can better attract foreign investment and construction, improve employment posts, and drive China’s economic growth. On the other hand, it can also introduce foreign advanced technology and experience, and promote the upgrading and transformation of China’s corn deep processing and fuel ethanol technology fields.

 

However, everything has its advantages and disadvantages, and the restrictions on foreign investment access have been lifted. Whether it is a “wolf” or a “cake” remains to be discussed. As far as the actual situation is concerned, for our ethanol industry, the market has not grown, but more people have participated. Previously protected by the policy, it was only a dispute between our own people. But after the signal of policy relaxation was sent, foreign-funded enterprises with more mature technology than ours will be introduced, and industrial competition will intensify. Moreover, the integration and annexation between enterprises will also become increasingly fierce, and competition will certainly increase.

 

Therefore, in the later stage, whether the existing domestic enterprises have the confidence to welcome the open market depends not only on the support of demand, but also on their own industrial technology upgrading and transformation. Foreign capital needs China, a vast market with abundant resources, and domestic private enterprises also need the capital and technology of foreign enterprises. Therefore, how to realize the complementary situation between foreign capital and private enterprises requires running in.


Post time: Oct-26-2022