China is considering investments of up to $1.5 trillion over five years in seven strategic industries

China is considering investments of up to $1.5 trillion over five years in seven strategic industries, sources said, a plan aimed at accelerating the country’s transition from the world’s supplier of cheap goods to a leading purveyor of high-value technologies.

1. Alternative fuel cars

China’s vehicle fleet has turned to many other power sources, including fuel cells, compressed natural gas, liquefied petroleum gas and even liquefied natural gas, which is most commonly associated with huge storage tanks aboard ocean-going tankers.

In June the government launched a pilot program in five cities to subsidize electric and hybrid cars

2. Biotechnology

The chairman of state grains trading firm COFCO Ltd, Frank Ning, told Reuters in an interview earlier this week that biotechnology was the key to keeping supply and demand in balance in the future.

3. Energy-Saving and Environmentally friendly Technologies

Premier Wen Jiabao called for “pushing forward with building a smart grid” in the annual report to the National People’s Congress in March.

State Grid Corp of China, which operates the bulk of the country’s power transmission networks, envisages building an “informationised, automatic and interactive” grid with ultra high voltage (UHV) power lines over the next five years.

4. Alternative Energy

China has already launched a major drive into hydropower and, to a lesser extent, wind, gas and nuclear, to supplement the coal sector that provides about 70 percent of its electricity.

The government is expected to unveil a new alternative energy plan within months to raise its targets for power generating capacity from such sources by 2020, since the country has already surpassed many of the targets it set out in 2007.

5. High End Manufacturing

China plans to build 13,000 km (8,078 miles) of high-speed rail lines by 2012, more than the rest of the world combined, and to invest 2 trillion yuan in railways by 2020, while building a fleet of state-of-the-art trains with the help of foreign firms including Bombardier Inc (BBDb.TO), Siemens (SIEGn.DE), Kawasaki Heavy Industries Ltd (7012.T) and Alstom SA

6. Advanced materials

China’s dominant position, supplying 97 percent of the world’s rare earths, gives it a stranglehold on new technologies and puts huge costs on foreign competitors.

China is the world’s largest producer of indium, a small but vital component for the flat-panel screens used in televisions and computer monitors.

China is also one of the world’s top miners of lithium, a metal used in batteries, metal alloys, ceramics and nuclear weapons, which is expected to dominate the electric car industry in the next decade.

7. New Generation Information Technology

A Chinese-built supercomputer, the Tianhe-1, was ranked the world’s fastest in October, with a theoretical speed of 4.7 petaflops per second.

China is also investing heavily in cutting-edge science, from nanotechnology to an array of 35 satellites that will provide a navigation alternative to the U.S. Global Positioning System by 2020.

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