Speaker Profile:

"Mr. Liao Zhengpin, the Han Nationality, was born in December 1940. He is the incumbent president of China Plastic Processing Industrial Association with an administrative level of director of department and bureau and a professor-level senior engineer. Since 1965, he has been engaged in plastic processing, technical management and other related work in plastic specialized area of technology. He is one of the leaders in the development of plastic industry in China. His main concurrent jobs include: Chairman of National Technical Committee (TC) of Standardization for Plastic Products; Vice Chairman of Board of Directors of China Association for Plastic Technological Application in Agriculture; Member of Coordinating Group for Chemical Building Materials in China; Member of Expert Advisors Group of 8th Brain-Trust of Beijing Municipality; Expert of Textile and Light Industry in Industry Development Department of State Development Planning Commission; Honorary Professor of North China Institute of Technology and Longyan University of Fujian; Judge of National Science and technology Reward Work Office, etc.

Abstract:

• Present Situation of Plastics Industry in 2007
• Consumption and Demand of China’s Synthetic Resin in 2007
• Continuously Increasing Output of plastic Machines in 2007
• Current Development of China’s plastic Additives
• Prospect of plastics industry and Our Tasks in 2008

Content:
China’s plastics industry has witnessed the leap-forward development with the stable and sound growth of national economy, having creased its economic and technical indicators stably and greatly for consecutive ten years. Such industry as a whole has been growing all the time, ranked the third in the light industry by its total value of output and the fifty by its export, acting as one of the key pillar industries of China’s national economy. China sees the radical change in plastics industry and the “sunrise industry” centering on plastics industry has been expanding its scale further. To change from “big” to “strong” is the lofty mission of China’s plastics industry, with China’s plastics processing machinery ranked the first in the world, while China is being developed into the great power of advanced independent R&D from the big power of design and manufacturing. The output of plastic synthetic resin ranks the global second and China is gradually changing to meet the market demand by domestic production from largely relying on import of such product, while the plastics processing ranks the global second and is being upgraded to Chinese brands with independent intellectual property right from processing of low-value added products. Technical innovation ability of China’s plastics industry has been enhanced further and the number of corporate technical R&D centers has been increased continuously, so that some regional hi-tech industrial clusters have been created, with the industrial structure, business structure and product structure readjusted constantly and the industrial intensity upgraded gradually. Additionally, the integral advantage of China’s plastics industry has been promoted and reinforced and the gap between the developed countries is being narrowed, with some minor aspects has reached the world’s advanced level. Now China is in the critical period of sustainable development while changing from a big power to a great power.

China’s plastics industry centers on plastics processing, acting as an integration including plastic synthetic resin, auxiliary agent and additive, plastics processing machinery and dies. During the period of “10th Five-year Plan”, China’s plastics industry oriented to the world followed the “Scientific Outlook on Development”, advancing the industrial structural readjustment and optimized upgrading, stepping to the newly emerging road of industrialization, playing an increasingly important role in the economic construction on the basis of the rapid development of such industry as a whole. China is marching on and changing to be the great power from a big power of plastics industry by means of the leap-forwards development.

I. Present Situation of Plastics Industry in 2007
According to the related statistics, the plastics industry in 2007 saw the good state of operation and the stable and sound development. The enterprises above the designated scale in the plastics industry numbered 14952, with the completed gross output value at RMB801.816 billion yuan, with an increase of 27.06% over the same period last year, making up 10.54％ of the gross output value of the light industry in China, ranked the third in the light industry. The overall development of plastics industry shows the situation of “stably expanding production and greatly increasing benefit.”

1. Continuously Increasing Plastics Output

In 2007, enterprises above the designated scale of plastics industry completed the output at 33,023,200T, with in increase of 14.48% over the same period last year, while keeping the momentum of stable growth. The plastic monofilament and knitting grew from more than 3,000,000T in 2006 to 4,000,000T in 2007 by 31.51%, showing that plastic packing kept the remarkable growth; the output of plastic pipe and pipe casting created the new high record in the history and hit 3,317,500T, with an increase of 26.52% over last year; the output of plastic panel and shaping articles hit 3,453,800T, with an increase of 14.65% over the same period last year, demonstrating that the building plastics application was being expanded gradually, with a brighter prospect; the output of agricultural film was 100,000T higher than that in 2006, boasting an positive growth by overwriting the previous negative growth. (See Table 1)

Table 1: Output and Increase of Plastic Products in 2007 (Unit: ’0000T)

2. Output/Region Distribution Concentrating in Southeastern Coastal Areas?

The PR of China’s plastics industry boasts the striking regionality and the producing areas of such industry are basically concentrated in the southeastern coastal area in Chin. Zhejiang, Guangdong, Jiangsu and Shandong ranks the first four by output in China and the total output of plastic products of such four provinces hits 21,634,000T, making up 65.5% of the total output of such products in China. The total output of such products of Zhejiang hits 7,661,200T, ranked the first by surmounting Guangdong for the first time; the total output of such products of Guangdong hits 7,544,500T, continuously keeping its position of a top plastics manufacturer; the total output of such products of Shandong hits 3,155,000T, with an increase of 31.49% over the same period last year, ranked the fourth with its total output of such products only 120,000T lower than that of Jiangsu. Guangxi boasts the highest growth rate at 52.17%, whereas Guizhou grows its output of such products at 50.72%, both acting as the region or province with the rapidest growth.? For details, please see the figure as below.

It is viewed from the proportion of plastic products of provinces or regions by category and output in China’s outputs the same kinds that Zhejiang ranks the first by its output of plastic film, leatheroid and synthetic leather, plastic commodities in China; Guangdong ranks the first by its output of plastic sheet/panel, plastic pipes/pipe casting, plastic packing box/container and other plastic products; Jiangsu ranks the first by its output of foamed plastics, and Shandong ranks the first by its output of agricultural film, plastic monofilament/knitting. For the top three provinces of output of plastic products by categories, please see Table 2.

Table 2:Top Three Provinces of Output of Plastic Products by Category in 2007 (Unit: ’0000T)

3. Plastics industry with Greater Increase of Economic Benefit
In 2007, the enterprises above the designated scale in China’s plastics industry achieved the gross industrial output value at RMB801.816 billion yuan, with an increase of 27.06% over the same period last year; the industrial marketing value hit RMB784.617 billion yuan, with an increase of 26.52% over the same period last year and of which, the export value hit RMB174.692 billion yuan, with an increase of 17.60% over the same period last year.

During January~November 2007, the profit of such industry (industry) hit RMB30.894 billion yuan, with an increase of 33.91% over the same period last year and of which, the sub-industry with higher growth of profit included plastic film with an increase of 67.77% over the same period last year, plastic panel/pipe/shaping articles with an increase of

47.18% over the same period last year and plastic monofilament/rope/knitting with an increase of 59.40% over the same period last year.

4. Decreasing Customs Export Growth and Proportion of Export Output Value
In accordance with the statistics from the General Administration of Customs, the accumulative value of export of plastic products in 2007 hit USD23.303 billion, with an increase of 15.35% over the same period last year, making up 8.62% of total export value of light industry and ranked the fifth of light industry. After the readjustment of the state’s policies concerning export rebates and processing trade, the export of products with “two-high and one-resource (high-pollution and hi-energy consumption and resource-based)” is restricted. The export growth of plastic products during 1~3 quarters in 2007 dropped by 9.69% over the same period last year.

Table 3: Statistics of Customs Export of Plastic Products in 2007

Table 4: Statistics of Customs Import f Plastic Products in 2007

China readjusted the export rebates and the rate of such rebate dropped to 5% from 11%, while the production value of export is subject to the downward trend, with the proportion of marketing on domestics market expanding gradually. The plastics enterprises shall take the necessary measures actively so as to tap the domestic market and readjust the industrial structure. While the export volume of plastic products drops, the import of such products is being increased gradually, with its proportion in surplus trade balance of light industry dropping slightly—dropped to 6.14% from 6.36% in 2006.

5. Trends of Plastic Applications

(1) Current Industrial Development of Plastic Profiled Materials
The plastic window/door applications are greatly promoted by the continuous enhancement of the national policies with regard to energy/resource conservation and comprehensive utilization, West China Development, planning of top three economic zones and revitalization of old industrial zones in Northeast China, as well as the super large-scale planning of Tianjin New Coastal District and others in China, whereas the evident change is happening to the southern provinces, central plains, Middle and West China and rural areas with slower development of such applications, where see more and more applications of plastic windows and doors and enjoy the stable increasing trend. The overall market demand is constantly increasing. It is analyzed on the basis the production operations of some enterprises that the output and sales of such products is 10％~15％ higher than that in 2006. The output and sales of shaping materials in 2007 is expected to hit more than 2,300,000T (excl. low-quality shaping materials). It is observed from the production operations this year of all such enterprises concerned that the supply and demand of such products from medium- and large-sized enterprises enjoying large scale, high product popularity, positive reputation of product quality, favorable operating environment and offering prices on the low side are still optimistic and subject to stronger expansion, whereas the market demand of some small and medium-sized enterprises is less than that last year due to many factors—some of such enterprises drops such market demand by 20％~30％, compared with that last year. Since the PVC resin price goes up and fluctuates this year, most of enterprises in such industry operate with meager profit. Generally, the overall situation of such industry as a whole witnesses the fundamental turn for the better—some stronger enterprises are developing towards the objective of 50,000T, 100,000T and 200,000T; a few of such enterprises changes their operational strategy and lines of production, whereas more enterprises make utmost efforts in developing new products and improving technical contents of their products, striving to create the products with their own characteristics and differentiation so as to be more mature and to expand more rationally while driving such industry to readjust and integrate continuously under the market rules for the sake of stably reinforced comprehensive strength.

China’s total export of shaping articles sees less increase estimated at more than 60,000T. Many enterprises in such industry have been making hard efforts in tapping the world market over years, but the increase of such market is very small. We should analyze and find out the possible causes carefully, summing up the experience of success, understanding the general knowledge of international trade, abiding by the rules of such trade, so as to try for higher international trade volume.

(2) Current Industrial Development and Features of Plastic Pipe

Current Development: the processing capacity of various plastic pipes has exceeded 4,500,000T and there are thousand of plastic processors with various scales of production. It is surveyed that the output of such products hits more than 3,400,000T in 2007, with an increase of 20% over last year. China has become one of the big powers in terms of plastic pipe manufacturing and application. The concentration of such sector has become higher and higher and the proportion of economic and technical indicators of the pillar enterprises with certain scale in such sector has been uplifted further. At present, the number of the enterprises with certain scale becomes higher and higher—there are more than 100 enterprises with the production capacity at more than 10,000T and approximately 20 enterprises with the production capacity at 100,000T or above.

Features: China has become one of the big powers of plastic pipe manufacturing and application, with the industrial concentration enhanced the number of enterprises with certain scale increased continuously; there are more varieties of materials and structures and the grade of such products sees the narrower gap between international advanced level; the application domain has been further broadened and the step towards the market internationalization has been quickened; enterprises attaches great importance to brand building; the current market has not been regulated some enterprises have been discovered with many problems such as poor product quality impacting the sound development of such industry. China attaches great importance to build the conservation-oriented society and current task of such energy conservation is arduous, whereas plastic pipe enjoys a broad space of application market thanks to its outstanding features of conservation of energy, water, land use and materials.

Prospect: China is still in the period of rapid economic development now. The rapid development of construction industry and housing industry, accelerating renewal of urban water supply pipelines and rapidly growing applications of plastic pipes to drainage and sewage treatment and other aspects will provide a broad market to plastic pipes for construction projects; as guided by the related national policies, plastic pipe sector is widening the application domain further and the agricultural pipe is the big market of the most successful application of plastic pipe. There is 320 million of rural population in China subject to unsafe drinking water. It is planned that China will basically solve the security of rural drinking water by 2015—this is a field where plastic pipe is applied the most successfully.? The survey conducted in 2005 shows that 96% villages haven’t the drainage and sewage treatment systems. plastic pipes will take a very large market share in rural drinking water and sewage treatment. The water-saving irrigation area has been increased by 150 million mu in China during 2005—2010 and of which, the low-pressure pipe irrigation area hits more than 30 million mu; the sprinkling irrigation area hits more than 20 million mu and the micro irrigation hits more than 9 million mu.? The area of such water-saving irrigation projects has been increased greatly and the plastic pipe will play a more important role in such application therefore. The area of new buildings in cities and rural areas during “11th Five-year Plan” period will hit 1,000 million square meters respectively and the plastic pipe sector will be driven to develop more rapidly.

(3) Current development of China’s Synthetic Leather

Leatheroid and synthetic leather are mostly made from PVC, polyurethanes, polythene and terylene superfine fiber. Such materials are turned into the necessities for human life, agriculture, traffic, culture and sports by means of plastic processing techniques. The sector enjoys its rapid development since the beginning of the 21st century and China has become a big power in the world in terms of manufacturing, consumption and trade of leatheroid and synthetic leather. The production lines and output of leatheroid and synthetic leather in China by 2006 make up two-thirds of the total of the world, some times higher than 17% as the proportion of China’s ten neighboring countries and regions occupying in such total of the world.

• Breakthrough Growth of Economic Aggregate for Leatheroid and Synthetic Leather

The output of our leatheroid and synthetic leather fluctuated around 500,000T during the “9th Five-year Plan” period and exceeded 1,000,000T during the “10th Five-year Plan” period and had broken through 1,500,000T during the “11th Five-year Plan” period, with more than 500,000T increased every three years. The gross industrial output value exceeds RMB50 billion yuan and the sales income hits RMB49.2 billion yuan. The situation of good, fast and sound development has been maintained.? In 2007, the output of enterprises above the designated scale hits 1,675,000T, with a net increase of 315,000T and the growth rate at 21% by comparing with that in 2006—of which, the output of leatheroid hits 1,050,000T, with the growth rate at 26%; the output of synthetic leather hits 625,000T, with the growth rate at 19%. The sales income of leatheroid and synthetic leather makes up 6.4％ of that of he plastic industry, ranked the first by annual mean rate of growth in China’s light industry. The output last year is three times of that in the year prior to China’s reentry to WTO, with the growth rate increasing from 2% prior to such reentry to 21% after such reentry. For growth of total output of China’s leatheroid and synthetic leather, please see the following chart:

• Continuously International Demand for China’s Leatheroid and Synthetic Leather

The total export and import volume of China’s leatheroid and synthetic leather hits 450,200T, with an increase of 33.1% over the same period last year and of which, the export volume hits 337,200T, with an increase of 35.8% over the same period last year and the export value hits USD1.101 billion; the import volume hits 113,000T, with an increase of 25.5% over the same period last year and the import value hits USD0.656 billion. The import volume has been dropped from 154300T to 90,000T in 2006, seeing an gradual decrease since 2000, with the annual growth rate at -9%, but China increased the import of leatheroid and synthetic leather last year, with the volume approaching the total import in 2004.

2000
2001
Export volume/’0000T
Import volume/’0000T

Top-grade Synthetic Leather as Leader of Industrial Development

The product mix of China’s leatheroid and synthetic leather has been changed radically in the new century—leatheroid makes up 79.93% of the total output of such products during the first five years while synthetic leather makes up 20.07%, but leatheroid made up 37.3% last year. With the rapid progress of modern technologies, the top-grade products of leatheroid and synthetic leather have become the industrial leaders.

The superfine fiber synthetic leather means a new generation of synthetic leather product and such product made in China boasts the first-class quality. With the true simulation of natural leather’s form and texture, such product is of revolutionary significance to leatheroid and synthetic leather industry. Such product can match with the natural leather and completely replace with top-grade natural leather in terms of internal microstructure, appearance, texture, physical properties, comfort, touch, permeability and elasticity, which has been extensively applied to top-grade shoes, clothes, furniture, balls and auto ornaments and others.

Recycling economy and ecological green synthetic leather will become mainstream of leatheroid and synthetic leather industry, whereas to popularize clean production, to promote energy conservation and discharge reduction and to make products to be more environment-friendly and ecological features will be the key emphasis of such industry. The developed countries initiated the concept of “green revolution” and the ecological products represent the new trend of current global consumption and production. The traditional PVC leatheroid had been at the vogue-oriented development stage and the extensive application of new-type and special materials such as green nano-coloring agent, green plasticizer, nontoxic tasteless auxiliary agent, coating agent and various nano-type antimicrobial materials facilitates the green revolution of such industry and promotes the functional development of leatheroid and synthetic leather so as to meet the varied demands of consumers.? Ecologic leather has been the development trend for the leatheroid and synthetic leather in the future. It is predicted that the future market will sees the rapidly increase of demand for ecologic leather in five years by 2012.

Records of hi-tech enterprises in synthetic leather industry and number of independent intellectual property rights and patents have been upgraded continuously, with hi-tech system created gradually. The degree of automatization of manufacturing facilities for leatheroid and synthetic leather is high and many fields are involved in such industry, including chemical industry, textile, plastics, leather, arts and design. Such industry has become one of hi-tech sectors on the basis of its functionality and features. Now all top research institutes provide more and more achievements with respect to leatheroid and synthetic leather in terms of sophisticated techniques, new technologies and new materials and processes so as to realize the transformation between industry and research findings and promot the development of productivity of such industry.

The national brands, local brands and regional economic brands have been systemized. Both domestic listing enterprises and overseas listing companies are involved in such industry; Chinese brands, provincial and municipal famous brands and hi-tech enterprises have become the key bases of industrial R&D; such industry sees rapid development and the chain has been created, while large and superlarge-sized production bases have been expanded continuously. In accordance with the analysis of key enterprises, the output of such products from Jiangsu, Zhejiang, Guangdong, Fujian and Hebei accounts for 70% of the total in China. Since the birth of “China’s Capital of Synthetic Leather” in Wenzhou, some areas in Zhejiang, Guangdong, Jiangsu, Fujian and Hebei have created the characteristic industrial bases of leatheroid and synthetic leather and such bases are playing an more important role in developing the local economy.

(4) Plastics recycling is enhanced to impel the sustainable development of plastics industry. Our Association has been proposing for recycling and reduced consumption of plastic bag, driving the implementation of energy conservation and discharge reduction and encouraging the recycling of resources so as to promote the plastics recycling and to built the harmonious plastics industry for the purpose of sustainable development of such industry.? Our Association is making suggestion about polices relating to sound development of plastic bag sector in supporting Chinese authorities concerned, while coordinating the Standardization Administration of the People’s Republic of China to formulate the plastic shopping bag-related national standards for plastic shopping bag, food-contact plastic shopping bag, degraded plastic shopping bag and so on, including six standards such as product standard, standard for testing method. Such standards provide the specific specifications and requirements for environmental protection, performance and testing process with regard to plastic shopping bags. Such standards shall be completed this Marc as planned.

(5) Outstanding performance of plastics is shown in “green” automobile trend. Green autos are quite outstanding on the North American International Auto Show held in Detroit recently. In the exhibition hall varies and colorful promotions lead to a simple fact that the future road leading to green autos is paved with plastics.? To automakers that want to loose weight of autos and to improve the mileage performance of autos, the reason for using plastics is more sufficient than ever. The compact plastic packing is helpful to hide the mixed-power battery and even the wire for transmitting current to connect battery with wheels are covered with engineering plastic, whereas those autos using bio-diesel and other new-type mixed fuel shall need the special mixed resin to make hoses and oil tank.

(6) The fire-related national policies and flame retardation-related national standards shall be implemented to promote the safe application of flame retardant plastics. The Fire Administration under the Ministry of Public Security promulgated the enforced national standard i.e. (GB20286-2006) Requirements and Mark on Burning Behavior of Fire Retarding Products and Subassemblies in Public Place on March 1, 2007, and the Regulations on Mark on Fire Retarding Products was enforced on May 1, 2007 officially. For the future, the building products, plastic products (incl. outer coverings of electric appliances), wire and cable, furniture parts, textile fabric, foamed plastics used in the new or rebuilt public places shall meet the requirements under GB20286-2006, while the counterfeit-proof flame retardant marks shall be added thereon. In accordance with the GONG XIAO Document No. [2007] 503 i.e. the Circular on Reinforcement of Control of Fire Retarding Products in Public Place (“the Circular”) released by the said Fire Administration on December 7, “when the fire acceptance and fire safety inspection prior to opening of a business, the application and marking of fire retarding products shall be included in the contents of required inspection and all procedures shall be observed stringently so as to prevent and control hidden trouble of fire from the sources. If any public place uses any fire retarding product inconsistent with those requirements under the Requirements and Mark on Burning Behavior of Fire Retarding Products and Subassemblies in Public Place after July 1, 2008, then such public place shall not pass the fire acceptance or fire safety inspection prior to its opening of business. ”

Our Association will act up actively in line with the Circular and strongly promote the related standards and requirements thereof in the industry, while ensuring the quality and safe use of fire retardant plastic products, cooperating with the authorities concerned in handling, using and promoting of marks of fire retarding products. Additionally, our Association shall perform its social duty in the fire retarding plastics industry, serving the industry and enterprises very well, creating the reliable fire system by means of fire retarding plastic products and fire-proof advanced design and technologies so as to start a new situation of application of fire retarding plastic products in public places with efforts.? Meanwhile, our Association will promote the energy conservation, discharge reduction and green plastics in such industry, popularizing the concept of green plastics and driving the progress of plastics in conservation of energy, materials, water and land and contributing to the sustainable development of China’s plastics industry.

II. Consumption and Demand of China’s Synthetic Resin in 2007

Shown as the latest statistic data, the output of China’s synthetic resin has hit 30,735,500T in 2007, with an increase of 18.54% over the same period last year; the import volume of such product hit 18,969,200T, with an increase of 5.04% over the same period last year; the export volume hits 3,823,700T, with an increase of 52.70 over the same period last year; the apparent consumption hits 45,780,400T, with an increase of 12.1% over the same period last year. (Please see Table 5)

Table 5: Output and Consumption of Synthetic Resin in 2006 and 2007 (Unit: ’0000T)

1. China’s synthetic resin production and consumption keeps higher growth and the dependence of such product declines year by year. In 2007, the total output of synthetic resin hits 30,736,000T, with an increase of 18.5% over the same period last year; the total consumption rises to 45,780,000T, with an increase of 12.1% over the same period last year, while the import dependence declines by comparing with that in 2006, and hits 41.4%, with a decrease of 2.8% over the same period last year.

2. The apparent consumption of polyolefin hits 21,565,000T, making up half of the total output of synthetic resin. The output of PP hits 7,127,000T, exceeding that of PE, while the apparent consumption of PE and PP exceeds 10,000,000T, with PP consumption increased by 15.84%--approximately 10% higher than that last year (6.4%); it is believed that its consumption in 2008 will exceed that of PE and act as the variety of highest consumption, showing the strong market demand for such product.

3. Production and consumption of PE, PP and PVC as main synthetic resins see higher growth. In 2007, the output of PE, PP and PVC is increased respectively by 16.1%, 21.7% and 19.8% over the same period last year and the consumption three products is increased respectively by 5.5%, 14.7% and 13.3%.

4. The output of general synthetic resins is obviously faster than consumption while import dependence declines remarkably. In 2007, the net import of synthetic resins drops somehow, with the import dependence of PE, PP and PVC at 39.8%, 30.2% and 12.7%, respectively 5.2%, 3.4% and 0.6% lower than that last year.

5. China’s PVC output accounts for 31.6% or so of total output of synthetic resins in 2007 whereas PE is ranked the first by its import volume and apparent consumption.

6. The center of ABS resin market is gradually shifted. The rise of auto industry and electronics changes the market situation of ABS resin. The consumption of ABS resin declines gradually in the field of large electric appliances so far, but quietly increases in the fields of small electric appliances, office equipment and transport. The application of ABS resin enjoys higher potential in the field of traffic and transport; the speeding up of production and consumption of autos and motorcycles will make autos’ internal ornaments to become the new consumption highlights on ABS resin market. Furthermore, yacht, mobile house and other leisure articles have also provided new outlets to ABS resin, while ABS resin enjoys the bright market prospect in applications of ABS resin in pipes, pipe casting, medical devices and alloy blends.

7. Trends of plastic raw material industry. China’s PP production is expanded quickly.It is estimated that China’s PP industry will see another round of hot investment and then the capacity of approximately 6,000,000T/year will be available in succession and of which, 65% belongs to SINOPEC and CNPC. Out of the declared newly increased capacity, 2350000T/year is from SINOPEC and 1350000T/year from CNPC. Viewed from the distribution of such capacity, the new capacity from SINOPEC is mostly distributed in the Pearl River Delta, Changjiang areas and circum-Bohai areas, whereas the capacity from CNPC is all distributed in Northeast and Northwest China.

Ethane industry sees hot development. Both domestic and foreign companies are still eager in investment in construction of ethane projects during “11th Five-year Plan” period. China will have multiple large facilities to be operated in succession during 2008～2010 and China’s capacity by 2010 will be estimated at 17,800,000T/year. Out of such projects, the top project to be operated in 2008 is the 1000000T ethane project of Dushanzi Petrochemical Works.

PVC production is affected by heavy snow. Affected by the southern heavy snow and ice disaster, Central, South and East China suffered power failure and transport interruption and the PVC production was affected seriously therefore. PVC industry is the hi-power consumption industry and the power failure caused the “reduction of output’ and the upstream enterprises of PVC witnessed the badly interrupted transportation due to the continuous snow, so that the operating rate of PVC capacity dropped, most of enterprises had to limit their output and some enterprises paused their delivery and offer for the time being. Meanwhile, the calcium carbide and other raw materials saw the tension in supply due to such bas weather.

8. Present situation of engineering plastic industry

Engineering plastic is the upstream industry of electric information, traffic and transport, aviation and spaceflight and machine manufacturing, playing an important role in the national economy, whose development not only supports the national pillar industries and modern hi-tech industries, but also drives the transformation of traditional industries and readjustment of product mix. In recent years, the application domain of engineering plastic tends to be more extensive and the consumption is continuously increased, with the rapid growth of China’s manufacturing industry. Particularly, such industry embraces the unprecedented development opportunities after China’s reentry to WTO.? The market demand cannot be satisfied and most of medium- and top-grade products have to apply the imported raw materials, although China’s engineering industry has been expanding rapidly, with the production capacity improved continuously and varieties of such products increased all the time.

Table 6: Consumption of Engineering Plastic in Recent Years

* The data in 2007 are the estimated ones.
** The data may not be accurate, for special engineering plastic was not counted before.

Table 7: Consumption Proportion of Domestic Engineering Plastic Market in 2007 (%)

Table 8: Proportion of Engineering Plastic Consumed Auto industry in 2007

III. Continuously Increasing Output of plastic Machines in 2007
The output of China’s plastic machines in 2007 hits 736,900T, with an increase of 26.29% over the same period last year. It is observed from Table 9 that the export of top plastic machines in 2007 sees the greater growth in terms of both number and export value, with such machines exported at 39,700 pcs or sets, with an increase of 65.4% over the same period last year, and the export value at USD0.82 billion, with an increase of 51.9% over the same period last year. Among extrusion machine, blow molding machine and hollow molding machine, the export volume of the last one has been increased by approximately 50%, with the export value increased by more than one time. Such case is inspiring and demonstrates that China’s plastic machines witness the continuous improvement of quality and continuous addition of value while their export volume has been increasing.

The increase export of such machines also shows that the manufacturers of such machines are fruitful in taping the international market whereas Chinese plastic processors need fewer plastic machines. It is known that China’s plastic machine makers were active in participating in the international plastics and rubber trade fairs held in various countries and the records on number of such participants, exhibited machines and visitors have been broken through, while the exhibited machines enjoyed the universal positive comment from their counterparts and other visitors thanks to the continuous improvement of the quality of such machines “Made in China”. The plastic machine makers with better benefits have a very large share from the sales value of its export in 2007, and most of them have more than half of the sales value from export.

Table 9: Customs Import/Export Statistics of Plastic Machines in 2007

It is observed the data of import that the number of such three machines decreases whereas the import value increases—for blow molding machine and hollow molding machine in particular, their import value increases by 89.4% although their number of import decreases by a half. Such case means the degree of self-sufficiency of such two machines in China is uplifting greatly, that China’s large-sized and top-grade machines can still meet the domestic market—the development of such machines shall be enhanced strongly so as to tackle such problem step by step.

IV. Current Development of China’s plastic Additives
China’s plastic additive industry has been developed with the industrialization of PVC. After 50 years’ building and expansion, China’s plastic additive industry has become a top industry with complete varieties of products and more than 1,000 enterprises, having made a progress in technical level, product mix, production scale and hi-caliber technician and other aspects.

In 2006, China boasted approximately 1000 enterprises of plastic additives and of which, 700 enterprises are operating. Except for the plasticizer manufacturers, absolutely most of such enterprises are small- and medium-size enterprises. The additives consumed by China’s plastic products were estimated at 2,350,000T in 2006, while PVC products consumed about 180000T additives. In 2007, China’s PVC output hits 9,700,000T, with the apparent consumption at 10,000,000T; the additives consumed by PVC is about 2,000,000T, and the total consumption of plastic additives will exceed 2,500,000T.? It is estimated in 2008 that China’s production capacity of PVC will reach 17,000,000T; the apparent consumption will reach 14,000,000T; PVC products will consume about 2,300,000T additives and the total consumption of plastic additives will exceed 2,800,000T—meaning that the total demand of plastic additives will grow at a higher rate.

As to the production scale of China’s plastic additives, most of the manufacturers of such additives are small workshop-type enterprises, except for those of plasticizer, while the general low-grade plastic additives are manufactures. Additionally, the quality of such additives is unstable; the variety is single, with few of them as the hi-performance additives. The R&D of plastic additives in China mostly imitates the foreign mature products, with quite fewer new-type and hi-performance additives researched or developed. In recent years, China’s plastics industry assumes the situation of industrial clustering development and the number of the enterprises with certain scale grows rapidly, while the industrial structure is readjusted to the orientation of scale and intensiveness gradually.? As to the basic information about China’s output and demand of plastic additives in 2006 and 2007, please see Table 10.

Table 10: Basic Information abut China’s output and Demand of plastic Additives in 2006 and 2007 (Unit: ’0000T)

With the development of global economic integration, the international trade frictions happen frequently and China’s export trade encounters various resistances due to many factors, as well the EU directives WEEE and RoHS in particular. In fact, the REACH Directive means a new-type trade barrier including technical barrier, environmental barrier and social barrier. Such EU directives have impacted China’s plastic additive industry greatly and some Chinese plastic additive producers suffer loss additionally due to raw materials’ high price due to high oil price and the narrowed profit space, so that China’s plastic additive industry faces a seriously bad situation.

To cope with related overseas directives, rules and regulations and to meet the human requirements for environmental awareness, the Chinese government had worked out a series of rules and regulations, including the Regulation on the Pollution Control of Electronic Information Products, forbidding applying lead salt and some heavy metal-type stabilizers to many products.

V. Prospect of plastics industry and Our Tasks in 2008

1. Prospect

China’s plastics industry will keep the stable growth in 2008 and the domestic demand will be enlarged stably. Beijing will host the Olympic Games and this even will further tap the application and development of plastics market, while many business opportunities will be brought to green plastics in particularly and the negative effect from the decreased export will be eliminated gradually.

The future demand of domestic plastics market mostly includes plastic products for packaging, construction, industry, traffic and electro communication. The application of plastic products in sports and fitness apparatus and medical devices will be increased greatly and the toy industry will turn to application of green plastics.

Engineering plastic will see the rapidest growth and enjoy increasingly extensive application domains with the rapid development of China’s manufacturing industry, with the consumption of such product increased constantly.

2. Tasks

In accordance with the circular released by the General Office of the State Council, no store or supermarket shall provide any plastic shopping bag free of charge since June 1, 2008 and no super-thin plastic bag with the thickness less than 0.025mm shall be made, marketed or used from then on. Undoubtedly, the implementation of such provisions will impose some certain impacts on some plastic film processors and some regions that have to face the great pressure of readjustment of production structure and transformation.

he ban of super-thin plastic bag manufacturing, use and the ban of use of PS-made fast food box in 1999 demonstrate that China has enlarges the importance attached to environmental protection and the insiders of plastics industry shall be clearly aware of the seriousness of such issue.? In 1999 when the production and use PS-made fast food box were banned, a group of enterprises concerned were closed, suspended, merged or transformed, whereas the production and use of super-thin plastic bag has also affected some enterprises. If the human awareness of plastic recycling has not been improved, some other plastic products will be banned for production and use, with the increasingly enlarging of plastic consumption - such case means a big challenge to plastics industry. It is strongly appealed that the insiders shall go out of such industry and reinforce communication with government departments, while approaching to the public and popularizing the concepts “plastic is unblamable and the ultimate solution to white pollution lies in recycling” and “human unsorted recycling makes white pollution”. In recent years, some media’s irresponsible and even wrong reporting has intensified the some people’s horror concerning use of plastics and plastic packaging products and the development of plastics industry will be affected somehow therefore. Hence, the insiders shoulder heavy responsibilities for the sound development of plastics industry.