China builds up new pillar industries

BEIJING - Chinese people born in the 1980s were taught that China's pillar industries are in the auto, construction, mechanical, electrical and petrochemical sectors, but the government is hoping that later generations learn something else.

The Chinese government is speeding up efforts to increase the proportion of emerging sectors in the country's economy. It expects that when the children of the post-80s generation start school in a few years, they can learn about four new pillar industries -- energy conservation and environmental protection, new-generation information technology, bio-tech industry and high-end equipment manufacturing.

Tech-intensive pillars

At a water recycling plant on the Wenyu River in northeast Beijing, sewage is forced through thin membranes dotted with holes about one five-hundredth the size of a human hair.

Every day, 200,000 tons of wastewater is processed by the micro-filtration system in this plant. The recycled water then runs into factories and fields in Beijing.

"The cost of recycling one ton of water is 0.7 yuan," said Wen Jianping, president of Beijing Origin Water Technology Company, the developer of the micro-filtration system. (0.7 yuan is equal to about $0.1)

"We develop the membranes ourselves, rather than importing them. That is why the cost is low," said Wen, 50, who researched membrane technology since 2000.

"Sewage treatment has become popular in China. Factories want sewage!" said Wen, who also noted that Origin Water has built one of the world's largest membrane R&D and production bases.

According to him, many local governments in China, which are economical in water use, have an annual plan for water consumption, and they do not approve new projects once the quota has been reached. "So, many factories turn to sewage treatment."

Despite a slowing Chinese economy, Wen's company saw its revenue more than double to 466 million yuan ($73.85 million) in the first half of this year. The company's profit rose by one-third year on year to about 80 million yuan.

Wen said his company is planning to enter the European and US markets next year. "This sector is not affected much by the global economic turmoil. As long as people consume water, water needs to be treated."

Wen's plan, built on Origin Water's technological advantage, reflects changes in Chinese companies' "go global" strategy.

Hurt by weakening demand amid the lingering global crisis, Chinese companies are ramping up efforts to enhance the competitiveness of their products. All the new pillar industries for which the country is making plans are technology-intensive.

China, though not known for technological innovation, is building an environment that could nurture more innovation. The country does not want to run the risk of falling behind globally when some high-tech industries fully emerge, analysts have said.

The upcoming 18th National Congress of the Communist Party of China, slated to convene on November 8, is expected to produce more government policies to help the new pillar industries take shape.

In Wen's eyes, it is not easy to stay in the business and turn a profit in the tech-intensive emerging sector.

"We have built a research and development team of 300 persons within the company of 1,200 employees," said Wen. "It is important to constantly make technological innovations so our membranes can remain among the world's best."