China's heavy industry includes the energy, iron and steel, machinery and chemical industries. In 1999, the added value produced by heavy industry in state-owned enterprises and industrial enterprises above a certain scale amounted to 1,161.7 billion yuan. Among coal, petroleum and electric power, coal is the major energy source. Large coalfields include Datong in Shanxi, Kailuan in Hebei, Pingdingshan in Henan, Huaibei in Anhui, Yanzhou in Shandong, Xuzhou in Jiangsu, Jixi in Heilongjiang, and Tiefa in Liaoning-16 in all. In recent years, along with the restructuring of the industrial system, the economic growth in coal enterprises has reflected their change to the intensive type; at the same time diversified operations have developed rapidly. Now, key coal mines in China have set up 17,000 diversified-operation enterprises, the output value of which exceeds half of the total coal output value.

The petroleum industry is distributed mainly in the Daqing Oilfield in Heilongjiang and Liaohe Oilfield in Liaoning, Shengli Oilfield in Shandong, Huabei Oilfield in Hebei and Dagang Oilfield in Tianjin. In recent years, three basins rich in oil deposits have been discovered in Tarim, Turpan-Hami, and Junggar basins. In addition to many large onshore oil and natural gas operations, a number of offshore operations are continuing in the Bohai Sea, and the east and west of the South China Sea.

Two newly-organized groups-the China Petroleum and Natural Gas Group and the China Petrochemicals Group-are the largest groups of their kind. The latter, whose business income in 1996 was 38.9 billion US dollars, ranks 62nd among the 500 strongest conglomerates in the world.

China's energy industry, including thermal, hydro and nuclear power, has developed rapidly. In the 1990s, China's installed capacity developed from 100 million kw to 200 million kw, and its generated energy and installed capacity both ranked second in the world. There are 58 large hydropower stations, which have been completed or are under construction in China, and 19 of them have more than one million kw of installed capacity each. The Ertan, Xiaolangdi and Yangtze River Three-Gorge hydropower stations, the Lianyungang and Ling'ao nuclear power engineering projects are under construction. The Qinshan Nuclear Power Station in Zhejiang and Dayawan Nuclear Power Station in Guangdong have been completed. The power grids of the country now cover all the cities and most of its rural areas.

Large iron and steel enterprises are distributed in Anshan, Taiyuan, Baotou, Beijing, Shanghai, Tianjin, Wuhan and Panzhihua. China at present has 24 iron and steel enterprises which produce one million tons or more of steel annually each, among them, the Shanghai Baoshan Iron and Steel Group being newly organized. Some large iron and steel enterprises use advanced technologies and have improved their equipment to produce a number of types of high-class steel, such as cold-rolled steel plates, cold-rolled silicon steel sheets, zinc-plated steel plates and steel pipes. Today, China has the capacity to produce 1,400 varieties of steel to more than 20,000 specifications. In addition, China's self-sufficiency in rolled steel has reached 90 percent.

China's machine-building industry manufactures farm machinery, engineering machinery, instruments and meters, general machinery, heavy mining machinery, machine tools, electrical engineering equipment, bearings, master tools, food-packing machinery and automobiles. Through the introduction, digestion and absorption of high technology, a number of top-technology industries representing today's advanced industrial development level have developed rapidly and formed initial production scales. For instance, in the automobile industry, the Changchun First Automobile Group and Shanghai Automobile Industry Group have introduced technologies from Germany's Volkswagen Company to manufacture sedans. The machine-building industry is capable of providing other industries with complete sets of high-level equipment, including large blast furnaces, large continuous slab and billet casters, electricity generators, coal mining equipment, petroleum prospecting equipment, oil drills, oil-refining plants, chemical plants, float-glass production lines and other complete sets of equipment. China's mechanical and electrical products, which have become pillars of China's export trade, generated 77 billion US dollars in foreign exchange in 1999.

China's chemical industry includes chemical extraction, and production of fertilizers, pesticides, basic inorganic raw materials, basic organic raw materials, synthetic fiber monomers, synthetic rubber, photosensitive materials, rubber products, plastic products, petrochemicals, chemicals for household use and pharmaceuticals-more than 40,000 kinds in all. Now China is among world leaders in terms of the output of more than 10 varieties of chemicals, such as synthetic ammonia, chemical fertilizers, sulphuric acid, soda ash and rubber tyres. Shanghai, Beijing, Tianjin, Dalian and Shenyang are China's most important chemical industry bases. China is self-sufficient in chemical products, and exports such products to more than 100 countries and regions.