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Keywords of this article:  automotive 
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The change of the China-US trade relationship has brought limited impact to the Chinese plastics industry.
The change of the China-US trade relationship has brought limited impact to the Chinese plastics industry.
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With the focus on “the impact of China-US trade relationship on the Chinese plastics industry”, AdsaleCPRJ.com recently conducted a survey aiming at understanding the industry professionals' views on the market of this year and the next year.

The
online survey received valid feedback from a total of 510 Chinese readers who are working in different sectors, including E&E (29.80%), Packaging (19.41%), Automotive (13.73%), Medical (10.20%), Construction (5.88%), Material manufacturers (13.14%), Machinery manufacturers (3.92%) and others.

Sales revenue expected to increase in 2018

In terms of the expectation for their enterprises’ salesrevenue in 2018, 32.16% of the respondents predicted an increase of more than 10%, while 25.49% expected an increase of not more than 10%. 18.82% expected the sales revenue to remain the same as in the previous year.

In addition, the respondents also rated for “the optimism of business development in 2019” on a scale of 1-10 marks where 1 is the lowest and 10 is the highest. The average was 7.51 marks, reflecting a relative optimism on their enterprises’prospects and the industry in 2019.

Limited impact from China-US trade relationship

According to the survey results, 39.02% of the respondents said the additional China-US tariffshave led to a decrease of 10%-20% in orders, and 37.45% said the orders were decreased by 20-30%. Only 6.27% said the orders were reduced by over 50%.

Therefore, from the results,
the change of the China-US trade relationship has brought a negative impact to the Chinese plastics industry, but the extent was limited.

In an interview with CPRJ, Mr. Ma Zhanfeng, Vice Chairman of China Plastics Processing Industry Association, commented on the survey results. He explained that the export value of Chinese plastics processing industry to the US only accounted for 15% of the total worldwide export value. Therefore, only limited impact to the Chinese plastics processing industry has been seen due to the change of trade relationship between China and the US.

Low reliance on exports in the Chongqing auto industry

The Chongqing auto industry focuses on domestic demand, and has low reliance on the US market.
After years of development, Chongqing automotive industry has built up a complete industry chain. In November 2018, the 8th Edition CPRJ Plastics in Automotive Conference & Showcase and 2018 Annual Conference of Society of Automotive Engineers of Chongqing was successfully held in Chongqing.

Mr. Lou Jianping, Vice President of Society of Automotive Engineers of Chongqing and General Manager of Saic-Hongyan Commercial Vehicle Co., Ltd, pointed out in an interview: “The domestic demand remains the primary driver of Chongqing commercial vehicles. The change of China-US trade relationship has only brought low impact to the Chongqing auto industry due to its relatively low reliance on the US market.”

Mr. Liu Changren, Vice President of Society of Automotive Engineers of Chongqing, also shared some statistics: The automotive industry holds a certain market share in the China-US trade. In 2017, the US was the largest importer of Chinese auto structural parts with import value of US$17.0 billion, accounting for 24.8%. Meanwhile, the US was the fourth largest exporter of auto parts to China with export value of US$2.8 billion, accounting for 7.3%.

 “Wheels and tires are the main auto products exported from China to the US. However, the Chongqing manufacturers seldom export these products to the US, added Mr. Liu.

China is a major manufacturer and exporter of tires worldwide. According to the statistics of China Rubber Industry Association, the exports of passenger vehicle tires and light truck tires
contribute 40% of the total production volume, in which the US is the largest importer with 30% of the market share. Currently, Shandong province is the primary production site of tires in China with more than 300 tires manufactures.

Decentralized purchasing helps reducing impact

In the survey, 31.76% of the respondents said they would purchase raw chemical materials from local suppliers or foreign suppliers outside the US. 17.89% said they would expand their investments in overseas, and 14.37% said they would apply for tariff exemption in the US.

Meanwhile, 12.06% said they would adjust the price of finished goods. 11.26% of the respondents longed for a subsidy from the government, while 12.26% would like to have a tax reduction.

Mr. Ma, Mr. Lou and Mr. Liu also shared the same view, saying that the Chinese enterprises should purchase from different suppliers to ensure smoothproduction. Moreover, the Chinese enterprisesshould also explore some new international markets, especially those countries in the “Belt and Road” Initiative. Most importantly, they should continue their investments in technology innovation which is crucial in long-term business success.

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