|What's next of pandemic - prepare to go or wait?|
|Publish Date: 2020/07/03|
Impacted by COVID-19 pandemic, global economy is stuck in slow lane. According to the United Nations World Economic Situation and Prospects report, the world's economy will shrink by 3.2% in 2020. Many companies are facing real predicament, while some other see the emerging opportunities of online retailing, medical products, remote working and online education, accompanied by surging demand for packaging, medical, electrical and electronics industries.
Before the pandemic is contained, companies need to turn their attention to the long term. As reflected by the statistics of CHINAPLAS, some companies are already planning ahead for the post-pandemic era.
Who are looking into the post-pandemic era?
More than 9,000 audiences from end user industries of plastics joined the recent 9 sessions of CHINAPLAS webinar. Speakers from Engel, Microban and Nanjing KY witnessed changed behavior of audiences, who used to listen passively, while now they are thoroughly looking for solutions so as to prepare for the post-pandemic markets.
Renowned enterprises from end user industries of plastics have also expressed their views during the interview recently:
● (Skyworth Group) For the business of smart TV box, new broadband products like 5G wifi router for family and 5G CPE will be under the spotlight. It is estimated that 4K HDR smart TV box will rise up to 70% of overall broadcasting appliance market capacity in 2020.
● (Unilever) Investment will be increased to extend the strategic plan in China. It includes further upgrade of supply chain by enhancing its flexibility to assure emergency supply and daily market demand being satisfied. Moreover, digitalization and automation will be accelerated due to smart factory and digital strategies.
Not only end user industries are extending their reach to the post-pandemic markets, but also upstream manufacturers. As of 22 June, more than 3,000 companies have submitted space reservations for CHINAPLAS 2021, such as SABIC, Kingfa, Polyplastics, Jushi, Momentive, Daikin, Polyone, Sasol, Pret, Tederic, Wittmann Battenfeld, CML, Yizumi, Siemens, Haitian, Jwell, Liansu, Battenfeld-Cincinnati, Jing Cheng, Simcheng, Demark, Akei, Aoki, Aoxiang, Macchi, etc. CHINAPLAS will be held at Shenzhen World Exhibition and Convention Center for the 1st time next year. Shenzhen is one of the core driving engines of Greater Bay Area development and an important manufacturing base and R&D centre in China. Plastics and rubber technology suppliers are excited about the news of CHINAPLAS 2021 moving to Shenzhen and show confidence in the post-pandemic markets.
What can be planned for the post-pandemic era?
Despite of the decelerated social and economic development, market demand is delayed instead of vanished.
Fueled by the Belt and Road Initiatives, urbanization, Greater Bay Area plan, 5G infrastructure, smart manufacturing, IoT, circular economy and new energy, China's GDP growth rate reached 6.1% in 2019. Beyond government policy and major trends, there is also enormous market demand, which is temporarily suppressed by the pandemic. But it will be eventually released when the pandemic is contained, and will stimulate the development of application industries of plastics & rubber, including packaging, electrical & electronics, building, medical, automotive, etc.
Furthermore, the ""2020 Government Work Report"" has announced new measures to strengthen economic development strategies and empower China economic growth:
---Expand effective investment: On top of current 3.75 trillion, additional government bonds that worth RMB1.6 trillion will be issued. The national government has also approved a budget of 600 billion investment.
---New infrastructure, new urbanization initiatives and major projects: They include development of new infrastructure and next-generation information network, wider applications of 5G technology, more charging stations and promotion of new energy vehicles, so as to activate consumption market and boost industrial structure upgrades.
---Key construction projects: The government will put greater efforts to develop major transportation and water conservancy projects, as well as increase the construction capital for national railway by 100 billion.
---Steadily advance new urbanization: The synergy brought by vibrant city cluster will further facilitate industrial structure upgrades. Public facilities in county seats and their service capability will also be enhanced. Furthermore, renovation of 39,000 old residential communities will be kicked off, with improved living standard and service facilities.
---Implementation of regional development strategies:
● Further develop the western, north-eastern and central part of China through construction of far-ranging infrastructure, to accelerate their economic development.
● Integrated development of economic zones, including Beijing-Tianjin-Hebei Economic Zone, Guangdong-Hong Kong-Macau Greater Bay Area and Yangtze River Delta, while simultaneously emphasizes protection of ecosystem at Yangtze River Economic Belt and Yellow River Basin, as well as implementation of the quality development outline. Eco-friendly production is emphasized again than ever.
● Develop marine economy and related industries, such as offshore pipeline projects, shipbuilding industry, offshore oil and gas production facilities, etc.
The mentioned strategic directions have laid down a solid foundation for further development and enormous opportunities for the plastics and rubber industries, as well as other manufacturing sectors.
Challenges and opportunities usually go hand in hand
Companies which can take the long view and act fast always outperform others during crisis. Yet some of today's biggest, best-known companies, such as General Motors, Hewlett-Packard and Microsoft got their starts during past US recessions. On the other side of the world, Taobao and JD caught the chances during SARS in 2003, thus enjoyed rapid business growth. In 2008, outbreak of the subprime mortgage crisis also fueled the new-generation global tech giants, such as Tesla, SpaceX, Airbnb, Uber, etc.
Stephen A. Schwarzman, CEO and founder of Blackstone Group said ""when you see major trends that are going to be happening. And if you put yourself in front of that major trend, odds are, you are going to be successful. Most people will be scared and do nothing"".
1.United Nations: Department of Economic and Social Affairs