Shanxi province sees tech as key to its industrial transformation

Shanxi province, long a powerhouse of coal and steel production, is stepping forward to transform its traditional coal industry and develop more clean energy with the help of technology.

Three major goals have been set, including building the province into a model of economic transformation, a leader in the energy revolution and a new example of opening up to the world, said Luo Huining, Shanxi's Party secretary.

Over the next five years, the province will build a solid foundation for a comprehensive economic transformation.

By 2030, it will set up a clean, safe and efficient system of modern resources, with support from many other industries to complete the transformation of its resource-based economy.

"As a province with the coal industry as its major economic contributor, Shanxi's resource transformation experience will provide some reference to many other places," Luo said.

China has set a goal of cutting 800 million metric tons of coal capacity by 2020.

According to the Government Work Report released in early March, 30 million tons of excess steel capacity and 150 million tons of excess coal capacity will be cut this year.

To achieve the target, Shanxi has overhauled its resource strategy, which now includes the expansion of clean energy, including natural gas and hydropower.

Enterprises in the sectors of coal, electrical generation and transportation, in particular, are encouraged to restructure or introduce cross-shareholding, which will increase competitiveness.

Over the past two years, a total of 52 coal mines have closed in Shanxi - outdated production capacity of about 46 million tons.

Technology has been a leading force in driving the province's economic transformation.

Experts in Shanxi Lu'an Group, one of the five largest coal enterprises in Shanxi, are exploring coal's potential role in making other clean and environmentally friendly alternatives. In February, it founded a coal chemical company.

"The company will become a production base of fine chemicals and lubrication oil to turn traditional basic fuels and raw chemical materials into high-end fuels and fine chemicals," said Li Jinping, chairman of the group and an NPC deputy.

He said the production base is expected to reach a capacity of 800,000 tons of cobalt-based Fischer and 400,000-ton synthetic lubricating oil within three years, aiming to be the largest high-end lube production base in China.

"The chemical business will account for a larger part of Shanxi's economy by the end of 2025," Li said. "We will select firms with conditions and needs for structural reform as partners to develop the production base."

Apart from reforms in the coal industry, the provincial government is also planning to build a green manufacturing system, which aims to transform traditional industries into greener and more environmentally friendly modes of operation.

To achieve economic transformation as an energy resource-based economy is a big challenge, not only to Shanxi, but also the world, Luo said.

"It's not a mission that can be accomplished by just one action. But the fear of difficulties should also be dispelled," he said. "Only with great determination and long-term effort will the transformation become a 'mission possible'."