China Is Expected To Become The World's Largest Chemical Market

China's chemical market is huge and full of life. It is expected that China will overtake the U.S. to become the world's largest chemical market by the end of this year.

The analyst points out that the gap of chemical industry market between China and the U.S. is rapidly narrowing, the rapid development of Chinese economy and China's demand for raw materials of end-users such as automotive, construction, textile industry are the key drivers of the r rapid development of China's chemical industry.

The analyst says that the global chemical industry is to maintain strong growth momentum. China as the world's second largest chemical producer has a good prospect. Last year, the output of China's chemical industry was over 900 billion U.S. dollars, accounting for 15% of the demand of the world. In addition, China is also a very active chemical trading country. Since 2000 the exports of chemical industry rose by 70%and the imports increased 50%.

The active local market, the growing wealth and the speedup of the integration of local chemical industry, all have brought investment opportunities for the global chemical industry to enter the Chinese market. It is noted that of many areas that drive the development of China's chemical industry in the next few years, the fastest growing areas are automotive and consumer electronics, and the of development of food and agricultural chemical sectors will also be very active.

However, the analyst also points out that the development of China's chemical industry in the future also faces a series of challenges. On the one hand, it performs that the low degree of concentration in the industry. In addition to several large petrochemical enterprises in the upstream, most sub-sectors are in a highly decentralized state, including more than 28,000 small-scale chemical plants. These small enterprises have a very limited production capacity and the product range is not big, leading to the excess supply of many low-end products. On the other hand, the energy efficiency of China's chemical industry is relatively low. The chemical energy consumption for one unit of output value is as much as 4.1 times of the United States and 6 times of Japan.

The analyst says that to China's chemical industry, the priority is to speed up industrial restructuring. They should improve the energy efficiency; produce higher value-added chemical products through improved equipment and technology innovation. At the same time, the government should also encourage small and medium chemical enterprises to integrate, change the low industry concentration, leading to seize the opportunity of the development of a new round of global chemical industry.