Ceramic Industry

China’s Ceramic Industry Wants Better Technology, Loan Write-Offs, And Lower VAT

July 30, 2000
China’s ceramic industry wants better technology and government loan write-offs, according to a new development plan and policy. The industry group also recommended cutting the value-added tax (VAT) on ceramics from 17% to 13%.

The new development plan called for the consolidation of smaller ceramics manufacturers into large “enterprise groups” that may be either leased or privately run. In the plan, the use of purified gas in the manufacturing process was promoted, as was the development of different gasification techniques for the various local coal varieties and the use of energy-efficient kilns and other technologies. The plan also called for the gradual elimination of coal kilns.

Foreign investment will be solicited to upgrade the technology of the main export production regions and large-scale enterprises. Two national trading centers should be established, one in the north and the other in the south. A high-speed information network should also be created for the industry. And high-tech production bases should be established in some of the key manufacturing regions.

Policy recommendations included the establishment of a special fund for the ceramic industry in the bad debt reserve fund of the banks. It was also recommended that eligible enterprises and enterprise groups have the chance to list their stocks in order to increase revenue. The group also recommended that the industry receive greater support in its development of high-tech industrial ceramics, and that a special high-tech risk fund should be set aside for industrial ceramics. Loans granted to the state-owned enterprises during the seventh and the eighth Five Year Plans should be written off, and interest rates should either be reduced or written off so as to reduce the burden of the enterprises.