On October 8, Premier Li Keqiang of the State Council presided over the executive meeting of the State Council, revised the list of investment projects approved by the government again, cancelled the approval of 15 categories of projects, including chemical fertilizers, and changed them to the record, and decided to cancel the approval of all overseas investment projects, unless a few other provisions. Industry insiders generally applaud this and believe that the relaxation of investment approval will not have a significant impact on industry investment in the short term, but will help promote the further marketization of the industry and benefit the fertilizer industry in the long run.

The approval of 15 types of projects such as chemical fertilizer was cancelled and changed to approval, which is a further relaxation after the approval of chemical fertilizer investment projects was decentralized at the end of last year. According to the Catalogue of Investment Projects Approved by the Government (2013 Version) released by the State Council in December 2013, potash and phosphate fertilizer projects are approved by the provincial government.

Tian Youguo, director of the National Agricultural Technology Extension Service Center of the Ministry of Agriculture, believes that the cancellation of the project review is ostensibly to liberalize the investment of enterprises in the fertilizer industry, but actually to regulate the development of the industry through marketization and increase the competitive awareness and pressure on enterprises. This policy only liberalizes the approval process, which means to facilitate the preparation process for enterprises to establish projects, and does not mean to encourage project investment. At present, the fertilizer industry has serious overcapacity, and enterprises are very cautious about new projects, but once there are good projects, it is easier to carry out. For powerful enterprises, it is conducive to the smooth progress of the project; For enterprises with uncompetitive projects, facing overcapacity, they will be more cautious.

Liu Shulan, honorary president of the China Nitrogenous Fertilizer Industry Association, also believes that the cancellation of the approval of chemical fertilizer for filing by the state is a measure to promote the marketization of the industry, which is conducive to the rational allocation of resources, and enterprises can make reasonable investment according to market demand. In the past, the reason for strict supervision was mainly to prevent a swarm of projects and avoid repeated construction. For the nitrogen fertilizer industry, the cancellation of fertilizer approval will not have much impact. At present, the nitrogen fertilizer industry has a serious overcapacity, and existing projects are losing money. If the new project is launched, it will not only aggravate the overcapacity, but also not make money, so smart enterprises will not easily invest.

Qi Zhaoying, Executive Deputy Secretary-General of the Potash (Fertilizer) Industry Branch of the China Inorganic Salt Industry Association, believes that the relaxation of the approval process should be good for the investment in the potash industry, but also reminds enterprises to pay more attention to market factors. She said that in the context of government simplification and decentralization, enterprises will actively and accurately consider market factors when installing new devices, rather than passively wait for policy support.

Chen Hongkun, vice president of Shandong Jinzhengda Group, believes that loose policy will help to fully push the industry to the market. From the perspective of enterprises, the government is more expected to do a good job of supervision and prevention from law-abiding, environmental protection, safety and other aspects, and to control the normal operation and operation of enterprises less, so as to make the operation efficiency of enterprises higher.

Ruan Guozhu, director of the marketing department of Guizhou Kaiping Chemical Fertilizer Co., Ltd., said that the relaxation of the approval process is a reflection of the decentralization of government power, and is also what enterprises want to see, which is conducive to the development of the chemical fertilizer industry. For phosphate fertilizer enterprises, in the past, they had resources but could not approve projects, and could not successfully carry out deep and fine processing of phosphate rock, while some projects supported by the government often became "chicken ribs". Now the lower threshold is more conducive to full market competition, allowing enterprises to dominate the market, allowing enterprises with resource advantages to develop faster, and promoting the overall development of the industry through technology and market competition.

The cancellation of fertilizer approval can be said that enterprises and industries have been looking forward to it. From the adjustment of the proportion of project investment capital in 2009 to the decentralization of project approval authority in 2013, to the change of project approval to approval this year and the cancellation of approval of overseas investment projects all reflect the determination and strength of the government to streamline administration and delegate power, which will have long-term benefits for the marketization of the fertilizer industry. It can be said that promoting the marketization of the fertilizer industry has become a trend. (Zhang Gaoke and Zhang Fan)

(Source: China Agrochemical Network)