Two Sessions Voices: Representatives Gather at the Two Sessions — What Key Topics Are Industry Leaders Bringing?
Member Yu Dehui: Strictly Control Blind Expansion of Copper Smelting Capacity. Copper is both an important non-ferrous metal resource and a key strategic resource relating to national socioeconomic security. China has now become the world's largest producer of refined copper, accounting for half of global output. However, domestic copper smelting capacity is still expanding blindly, overcapacity continues to intensify, and the self-sufficiency rate of copper concentrate is declining rapidly, which has caused serious impacts on the ecological environment.
SMM May 26 news: On the 21st, the Third Session of the 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC) officially began, and the 2020 Two Sessions opened, with representatives attending to discuss state affairs. In recent years, China's metal industry has developed rapidly and its production and manufacturing technologies have continued to improve, but at the same time structural contradictions have become increasingly prominent and some new problems have gradually emerged. In response, industry leaders attending the Two Sessions have put forward relevant suggestions:
Member Yu Dehui: Strictly Control Blind Expansion of Copper Smelting Capacity. Yu Dehui, a member of the National Committee of the CPPCC and general manager of Aluminum Corporation of China Group, said that copper is both an important non-ferrous metal resource and a key strategic resource relating to national socioeconomic security. China has now become the world's largest producer of refined copper, accounting for half of global output. However, domestic copper smelting capacity is still expanding blindly, overcapacity continues to intensify, and the self-sufficiency rate of copper concentrate is declining rapidly, causing serious impacts on the ecological environment.
With the comprehensive deepening of supply-side structural reform, the non-ferrous metals industry has made tremendous achievements in the reform centered on the five major tasks of cutting overcapacity, reducing inventory, deleveraging, lowering costs, and strengthening weak links. Deepening reform has become an important booster for the stable and healthy development of the industry. Yu Dehui believes that supply-side structural reform should be continuously promoted, reform in the copper industry should be accelerated, blind expansion of copper smelting capacity should be strictly controlled, and the copper industry should be pushed toward high-quality development.
Gao Bingwei, Deputy Director of the Office of Shanxi Huasheng Aluminum Co., Ltd.: Put the Electrolytic Aluminum Industry on a Green Development Track. Gao Bingwei believes that Shanxi's pilot reform of "coal-power-aluminum-materials" integration, converting bauxite locally into aluminum alloy end products and forming a new industrial development model, is an urgent requirement for solving the structural contradiction of "over-reliance on coal" and promoting high-quality economic development. If all alumina is converted locally, it can create two "100-billion-yuan aluminum industry projects", enabling a breakthrough in the major task of comprehensive energy reform pilot designated by the Party Central Committee for Shanxi, and achieving an organic unity of political, economic, and social effects.
Gao Feng, Secretary-General of China Formwork and Scaffolding Association: Proposal to Include "Waste Construction Aluminum Formwork" in the "Catalogue of VAT Preferential Policies for Comprehensive Utilization of Resource Products and Services". Gao Feng believes that China is expected to recover more than one million tons of waste aluminum formwork every year, making this an energy-saving project of enormous scale. However, because the recycling and reuse of waste aluminum formwork is an emerging industry developed in recent years, it has not been included in the 2015 edition of the Catalogue of VAT Preferential Policies for Comprehensive Utilization of Resource Products and Services. To this end, he suggested adding "waste construction aluminum formwork" to the catalogue, enabling it to enjoy the tax preferential policies in relevant documents, and strengthening guidance and support for the development of China's aluminum formwork recycling and reuse industry.
National People's Congress Deputy Ding Shiqi: Change the "High Energy Consumption" Label of the Non-Ferrous Metals Industry and Help the Industry Achieve High-Quality Development. Ding Shiqi, a deputy to the National People's Congress and deputy general manager of Tongling Nonferrous Metals Group Holding Co., Ltd., brought three proposals: "Proposal on Abolishing the Industry High Energy Consumption Classification Method and Classifying High Energy Consumption Enterprises Based on Standards", "Proposal on Timely Revising Pollutant Emission Standards for the Non-Ferrous Metals Industry, including the Emission Standard of Pollutants for Copper, Nickel and Cobalt Industry (GB 25467-2010)", and "Proposal on Implementing National Purchase and Stockpiling of the Rare and Dispersed Metal Rhenium to Control Important Strategic Resources".
Ding Shiqi said that in some previous policies and regulations, simply classifying non-ferrous metal smelting and rolling processing and other industries as high energy consumption industries was inaccurate and unreasonable. "Classifying the entire industry as a high energy consumption industry will dampen the development of the industry, suppress industry progress, and is unfair to enterprises with good energy-saving performance. In every industry, there are generally multiple process options, and the energy consumption indicators of each process are different. In addition, differences in enterprise development levels, technical equipment levels, and management levels also lead to inconsistencies in enterprise energy consumption levels." Therefore, Ding Shiqi proposed abolishing the industry high energy consumption classification method, refining the classification to individual enterprises, and using relevant standards as the basis to identify high energy consumption enterprises for precise management and control, restricting and shutting down high energy consumption enterprises.
Tan Chengxu, Chairman of Ansteel: Proposal to Support Domestic Iron Ore Development and Set Up a Development Support Fund. Tan Chengxu, chairman of Ansteel, suggested accelerating the formulation of China's iron ore resource security strategy, vigorously supporting domestic iron ore development, and improving the domestic iron ore resource guarantee capability. Policy support should be strengthened by lowering the VAT rate, expanding the scope of deductions, and establishing a "National Iron Ore Development Support Fund".
He Wenbo, Member of the National Committee of the CPPCC, Suggested Removing the Steel Industry from the Catalogue of "High Energy Consumption, High Pollution and Resource-Intensive" Industries. He Wenbo, a member of the National Committee of the CPPCC, Party Secretary, Executive President, and Secretary-General of the China Iron and Steel Association, said that mechanically listing the steel industry as a "high energy consumption, high pollution and resource-intensive" industry is unreasonable. First, the concept of "high energy consumption, high pollution and resource-intensive" lacks clear determination criteria. Second, the "Industrial Classification for National Economic Activities (GB/T 4754-2017)" should be adopted as the industry classification standard. Third, after more than 40 years of difficult development since reform and opening up, the steel industry, which has grown strong with international competitiveness, is an important "ballast stone" of China's real economy; steel materials are the material foundation of the manufacturing industry, and advanced steel materials are an important component of new materials. Fourth, the steel production process has three major functions: material manufacturing, energy conversion, and waste absorption and treatment. The steel industry is an important support for national ecological civilization construction and an important participant, contributor, and leader. He suggested removing the steel industry from the catalogue of "high energy consumption, high pollution and resource-intensive" industries, and at the same time no longer listing steel products in the catalogue of "high energy consumption, high pollution and resource-intensive" products.
Dong Qiang, member of the National Committee of the CPPCC and former chairman of China State Shipbuilding Corporation, suggested changing the customs supervision of ship repair scrap steel from "general trade" to "excluding ship repair". That is, solid wastes such as scrap steel generated from the repair of foreign vessels are not imported foreign garbage and should not be supervised under "general trade".
Dong Qiang said that over more than 40 years of reform and opening up, China has become the world's largest ship repair country, accounting for 40% of the global market share, earning US$3 billion in foreign exchange each year, and providing 50,000 direct jobs. Protecting and developing the ship repair industry has a very practical role in the current implementation of the "six stabilizations" work, especially stabilizing employment, stabilizing growth, and stabilizing foreign trade.
He Wenbo, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and Party Secretary of the China Iron and Steel Association (CISA), suggested that as imported ore prices and steel prices move in opposite directions, the iron ore pricing mechanism urgently needs adjustment, and scrap steel resource recycling should be increased. When discussing how to address the issue of iron ore resource security, He Wenbo put forward suggestions in three aspects: first, reduce the comprehensive tax and fee burden on iron ore enterprises and moderately increase domestic iron ore supply. Second, actively promote overseas resource development. Third, increase the recycling and utilization of scrap steel resources.
Li Lizhang, an NPC deputy and chairman of Sansteel Minguang, said that scrap steel, as a resource necessary for steel production, is the only steelmaking raw material that can replace iron ore. For years, scrap steel prices abroad have been consistently lower than domestic prices, with better quality, while imported iron ore prices have remained high and are manipulated by foreign capital. He suggested that while intensifying domestic scrap steel recycling and application, China should encourage the import of recycled steel materials, reduce pollutant emissions, and curb imported iron ore prices. SMM believes that if the supply of scrap steel is increased, it may curb price increases at the raw-material end of the steel industry and promote profit expansion for steel mills.
Zhang Tianren, an NPC deputy and chairman of Tianneng Group, suggested optimizing fiscal and tax policies for the lead-acid battery industry. In order to solve the current weak links in the recovery and recycling of lead-acid batteries, Zhang Tianren suggested that relevant state departments coordinate the adjustment and optimization of a series of fiscal and tax policies for the lead-acid battery industry, so as to further promote the green and sustainable development of China's lead-acid battery industry and promote the high-quality construction of "zero-waste cities". Specific considerations may include the following: include lead-acid batteries in the "Catalogue of Products for Comprehensive Utilization of Industrial Solid Waste Resources" currently being compiled by the Ministry of Industry and Information Technology; and, in accordance with the overall requirements of the "Pilot Work Plan for the Construction of Zero-Waste Cities", exempt lead-acid batteries that meet national and local environmental standards and carry out comprehensive utilization in accordance with the law from environmental protection tax. It is also suggested that relevant departments re-evaluate the implementation effect of the consumption tax, and in conjunction with the "Consumption Tax Law" currently under revision, cancel the lead-acid battery tax item, or provide consumption tax rebates to manufacturers that actively implement the extended producer responsibility system and "sell one, recycle one", based on the recycling volume/recycling rate. Innovative solutions should be adopted to solve the input-invoice/input-tax difficulties of recycling enterprises, such as applying to tax authorities to issue invoices on their behalf at a 3% tax rate by reference to the standards for small-scale taxpayers. Fiscal and tax support for secondary smelting enterprises should be increased. It is recommended to revise the existing "Catalogue of Value-Added Tax Preferences for Products and Services from Comprehensive Utilization of Resources", and restore the immediate levy-and-refund ratio of value-added tax for lead-acid battery recycling enterprises from the current 30% to 50%, among other measures.
Zhang Hongwei, an NPC deputy and chairman of Dongyangguang, suggested further adjusting the VAT rate structure and advancing the reform of the enterprise income tax system. At this year's two sessions, Zhang Hongwei, focusing on the topic of further reducing the tax burden on private enterprises and stimulating corporate vitality, put forward suggestions on further adjusting the VAT rate structure, advancing the reform of the enterprise income tax system, and implementing preferential income tax rate policies for dividends received by individual shareholders from non-listed companies.
He explained that first, the VAT rate structure should be further adjusted. Merge the tax rates from three brackets to two, combining the highest rate of 13% with the current middle rate of 9% into one bracket. In this way, on the one hand, the tax burden on manufacturing enterprises can be further reduced; on the other hand, the distortion effect of multiple tax rates on market operations can be reduced. Second, advance the reform of the enterprise income tax system. Lower the basic enterprise income tax rate, enhance corporate vitality by reducing the tax burden on enterprises, and at the same time enable enterprises to be more capable of fully participating in international competition. Third, implement preferential income tax rate policies for dividends received by individual shareholders from non-listed companies. According to the Individual Income Tax Law, interest, dividends, and bonus income shall be subject to individual income tax at a proportional rate of 20%. Dividends received by individual shareholders from listed companies can be taxed at half the rate. Therefore, in order to stimulate individuals' enthusiasm for starting businesses, it is suggested that dividends received by individual shareholders from non-listed companies also be taxed at half the rate.
Deputy Li Wei: Smart factories point out the development direction for the non-ferrous metals industry. At this year's two sessions, Li Wei brought forward the proposal "Recommendations on Further Strengthening Fee and Tax Reductions to Revitalize the Real Economy". He believes that affected by the COVID-19 pandemic, the global economy is undergoing severe tests. From a domestic perspective, downward economic pressure remains obvious, and investment, foreign capital, and foreign trade indicators have all declined to varying degrees. As a result, the development of the real economy still faces enormous difficulties. Although affected by multiple factors such as market conditions and supply-demand relationships, the difficulties and challenges faced by the real economy are still directly related to rising enterprise operating costs. When enterprise costs remain high, enterprises cannot release vitality and naturally lack the ability to resist risks.
To this end, he suggested that first, on the basis of the existing system, further reduce administrative and institutional fees, raise the threshold for tax payment, and expand the scope of tax reductions. At the same time, it is necessary to supervise the substantive implementation of policies, effectively remove "middle-level obstructions", and open up the "last mile" of the implementation of fee and tax reduction policies. Second, further lower the social security contribution base, reduce the employer contribution rate for social security, and thereby reduce enterprise labor costs, providing endogenous impetus for the development of the real economy.