Chen Ji: How to ensure the security of China's commodity supply under the changing situation?

　　Editor's note:

　　The reconstruction of the global industrial chain and supply chain is accelerating, and the China New Observation column of Chinanews.com launched a series of reports on "Great Powers and Strong Chains" to gather wisdom from all parties for supply chain reform and industrial security development.

　　Chinanews.com, December 25

　　AuthorChen JiExecutive General Manager of CICC Research Institute

　　Since the Ukraine crisis, the global industrial chain of bulk raw materials has suffered a huge impact. Resource importing countries are facing challenges such as deteriorating terms of trade and rising inflation. Countries are increasingly concerned about the security of resource supply.

How to ensure the security of China's bulk commodity supply under the changing situation?

Answering this proposition has become more urgent and more challenging in the context of green transformation and unstable international political and economic environment.

　　At present, the mismatch between supply and demand is the reality of risk faced by China's bulk raw materials, which is mainly reflected in the large demand for resources, high dependence on foreign countries, and concentrated import channels. In addition, weak cost competitiveness and slow technology replacement also increase the mismatch. risk.

In the future, new developments at home and abroad may further exacerbate the tight supply and demand of global bulk raw materials, bringing more risks and uncertainties to China.

　　Although my country is a resource-rich country with abundant reserves of some mineral resources, there is still room for tapping the potential, and we can participate in resource development outside, but we also need to be aware of the urgency of the current international situation, and we must speed up the pace and increase investment in the layout of the bulk raw material industry chain .

Therefore, based on the characteristics of domestic supply and demand, combined with international experience, the author will think and analyze China's bulk raw material supply guarantee plan from the industry level and the national level.

Chen Ji, Executive General Manager of CICC Research Institute

Industry measures: five key points

　　First, continue to increase the domestic potential of traditional energy sources.

Emphasize the strategic significance of oil and natural gas exploitation, and reduce the dependence on foreign oil and gas resources.

At present, my country's investment in oil and natural gas is significantly slower than that of other countries. It is necessary to increase policy support, promote the oil and gas industry to increase investment in exploration and development, revitalize existing oil and gas blocks, and accelerate the use of proven reserves.

Similar to oil and natural gas, enhancing domestic coal supply capacity is also the key. However, considering that my country's coal supply is greatly affected by transportation bottlenecks, and controlling coal consumption is the future development direction of my country, it is necessary to optimize domestic coal transportation conditions and increase the supply of advanced production capacity. Flexible industry selection may be relatively better than new capacity.

　　Second, further excavate overseas metal resources.

In terms of iron ore, the construction of super-large iron ore projects abroad should be accelerated, and the existing resources should be converted into actual production as soon as possible.

In terms of coking coal, by deepening cooperation with friendly trading countries, we can ensure that there are still relatively stable channels to obtain resources in the case of relatively concentrated overseas supply.

　　Third, strengthen the construction of reserve capacity and effectively play the role of "reservoir" and "buffer".

There are still deficiencies in my country's current bulk commodity reserve system: First, the reserve method is too single.

my country's current reserve system is mainly based on central reserves and local reserves. The scale of private commercial reserves is very small, and large-scale commodity reserves require high costs, resulting in excessive financial pressure on the country.

Second, the reserve scale is still small.

The oil storage capacity of the United States, Japan and other developed countries and regions generally exceeds 140 days.

In contrast, my country's oil reserves are still small.

Therefore, it is recommended to promote the construction of an important strategic resource reserve system, strengthen the reserve of bulk mineral products such as oil and copper, and at the same time strengthen the reserve of new energy metals, especially strategic metal resource products.

　　Fourth, recycling is an important measure to enhance the elasticity of metal supply and reduce risks.

The circularity of metals makes recycled minerals have an important multiplier effect on resource supply, which can increase the secondary supply of metal resources, reduce the consumption of primary metals, protect the ecological environment, and open up new channels for ensuring the security of national metal resources.

　　Fifth, technological substitution is a supplementary measure to address insufficient supply of key categories.

Traditional metal mineral resources demand analysis is based on the premise that technology does not undergo fundamental innovation, but a new round of technological revolution marked by informatization is having a major impact on the demand and supply of metal resources in terms of conservation, substitution, and application expansion. .

State assistance: three channels

　　First, continue to upgrade the supply chain security deployment of strategic minerals.

Drawing on the experience of the strategic mineral list system in developed countries, on the one hand, we need to comprehensively study and judge the supply and demand situation, guarantee capacity and supply security of minerals required in key fields such as new energy, high-end equipment manufacturing, and new generation information technology, and scientifically determine the list of key minerals , Include it in the "National Strategic Mineral Catalog", and conduct a comprehensive evaluation of each mineral resource according to the importance, supply and demand situation, supply risk, etc., and dynamically update the strategic catalog.

　　On the other hand, promote the classification of key minerals.

For example, for resource-scarce minerals such as cobalt and nickel, the method of paying equal attention to domestic resource exploration and overseas development and cooperation is implemented.

Accelerate the approval process for newly established mining rights, encourage qualified social capital to actively participate in exploration and development, and inject vitality into the mining market.

　　Second, participate in global resource cooperation to ensure the resilience of the supply chain.

Give full play to my country's advantages in technology, equipment, and talents in the fields of energy and metals, build a mutually beneficial and win-win supply chain and industrial chain cooperation system with strategic minerals as the carrier, and enhance the influence of global resource allocation.

　　The first is to promote high-quality mining cooperation with countries that jointly build the “Belt and Road”, and build a supply chain guarantee system from supply countries to consumer countries through passage countries.

Focusing on strategic mineral enrichment areas, establish a multi-functional and collaborative information network.

Utilize the existing international cooperation network to provide enterprises with information such as the development trend of strategic mineral resources in various countries, tariff regulations, marketing suggestions and industry contacts, and promote international cooperation in strategic mineral resources.

　　The second is to strengthen international capacity cooperation in the mining industry.

Improve the coordination mechanism for overseas mineral exploration and development, focus on cobalt, lithium, nickel, platinum group metals and other minerals that are highly dependent on foreign countries, and support Chinese-funded enterprises and the country where the project is located to develop mutual benefits through equity mergers and acquisitions, production capacity purchases, strategic alliances, etc. Cooperation, integrate the concept of green development throughout the whole process of mining cooperation, cultivate a large multinational mining group with international competitiveness, play its role as a ballast stone in the security of key minerals, and reduce the risk of chain disconnection caused by political turmoil .

　　Third, give full play to the engine role of RMB settlement and pricing, and enhance the pricing power of bulk commodities.

From the perspective of currency inflow and outflow, on the one hand, it is necessary to strive for countries with large exports of bulk raw materials and China as its main importer as payment targets, and to choose countries with potential conditions for both trade and financial repatriation for RMB payments to meet bilateral trade Requirements such as balance and reserve diversification.

　　At the same time, in view of the current separation of RMB settlement and pricing in bulk commodity trade settlement, in the future, it is not only necessary to promote the increase in the amount of RMB settlement in bulk commodities, but also the combination of settlement and pricing, and even promote the internationalization of RMB as a reserve currency change.

Therefore, we need to be more active in aligning with international trade norms, and speed up RMB settlement and valuation through cooperative means such as the joint construction of the “Belt and Road Initiative” to further enhance China’s pricing power in bulk commodities.

(This article is one of the series of columns of "Big Country and Strong Chain" launched by Sino-Singapore Finance and Economics and CICC)