Published on June 18, 2014

The chemical industry of China has witnessed the dawn of a new phase, which will bring growth at a more settled pace. This steady pace of growth combined with urbanization, increased domestic consumption, and rising demand for auto and electronic products will offer a wide range of opportunities.

The chemical industry is expected to grow by 9-11 per cent between 2013-15.

This dependable pace of growth in chemical manufacturing has not changed the fact that China remains reliant on imported materials. China continues to have a net chemical deficit which has made the sector vulnerable to price fluctuations in the global market.

In the first half of 2013, output of key chemical products was less due to lack of major investments and a number of large transportation and infrastructure projects, as a result of which demand for basic raw materials declined in the previous year.

Market capacity has gradually stabilized without stimulus from the government. Also, chemical manufacturers have not reduced production as firms don't want to lose workers, while the government encourages companies to maintain job stability and production.

The industry in 2013 was propelled by firms involved with specialty chemicals, organic chemical materials, rubber products and synthetic materials manufacturing.

However, overcapacity and low demand in high output sectors continues to affect the performance of the industry.