China Unveils Its Plan For Sustainable Growth
18 March 2009 With the annual government convention in Beijing beginning the week before CAC, the country’s agriculture and chemical industries were central to many conversations. The petrochemical industry constitutes about 15% of China’s gross domestic product, according to Zhao Jun Gui, vice chairman and secretary general of the China Petroleum and Chemical Industry Association (CPCIA).
“The petrochemical industry is very important to China’s economy, and it is very important to other industries in China as well,” he told FCI in an exclusive interview.
Zhao Jun Gui unveiled a government plan to a general assembly at CAC in Shanghai on Tuesday. He said new government policies will help create innovations in manufacturing, enhance product quality, protect the environment and create some sort of price stability for chemical products made by Chinese producers. Out of the 1,148 chemical products produced in China, just 5% experience a price increase in 2008; almost half experience price declines.
Although particulars of the government’s new plan that CPCIA (the former Ministry of Chemicals) helped draft have not been approved by officials yet, the measures are in part aimed to help combat the global financial turmoil surrounding many countries. China’s export sector, of which the agrochemical industry is part, contributes 60% to China’s GDP.
The secretary general said China in general was growing too fast to sustain the world’s resources. The country consumes about one-third of the world’s steel and about 60% of the world’s concrete. Similarly, agrochemicals have been growing at frenzied clip of 30% each year since 2002, which he said was impossible to sustain for much longer.
However, he acknowledged China’s vast potential for explosive growth. After three decades of open trade, the “easy money” period has subsided. But opportunities still exist for companies that focus on technological innovation and sound business practices. In turn, many smaller, unsophisticated producers will be bought, will merge with more capable companies, or they will be put out of business by the country’s free market enterprises.
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