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China has become the largest plasticsproducing and consuming country in the world. Meanwhile, the regional structureof its plastics industry is changing according to macroeconomic developmentsand government policies.


Shanghai has been shifting its focus of industrial development to new materials.
Shanghai has been shifting its focus of industrial development to new materials.

The eastern coastal area of China, including the six provinces and one municipality of Eastern China (Jiangsu province, Zhejiang province, Anhui province, Fujian province, Jiangxi province, Shandong province, and Shanghai) has made a remarkable contribution to the success of the Chinese plastics industry, and is the most active and promising region for the industry.

Thanks to the rapid development and improvement of the infrastructure and investment environment, industrial clusters spring up in Western and Central China. More automotive, home appliance and packaging enterprises are eyeing the huge potentials and to expand in the region, boosting the development of the plastics industry there.

A new chapter in Eastern China

In Eastern China, one of the most economically developed regions in the country, demand for plastics, resins, additives and plastics processing machinery is enormous. A complete value chain, including the production of the five major universal resins, the five major engineering plastics, plastic products, plastics processing machinery, has therefore developed.

As the plastic product output of Eastern China accounts for 43% of the national output, the region is the pillar of the Chinese plastics industry.

According to the statistics provided by the China Plastics Processing Industry Association, the total output of the Chinese plastic products reached 75 million tons in 2017, up by 3.44% over the previous year. Zhejiang province contributed 10 million tons and ranked first, accounting for more than 13% of the total output. Meanwhile, the outputs of Shandong, Fujian and Anhui provinces substantially increased, with year-on-year growth of 10.02%, 7.36% and 11.21% respectively.

Zhejiang province is the cream of the Chinese plastics industry. Its output of plastic products has ranked first in China for six consecutive years since 2012.

Products like profiled bar, artificial leather, synthetic leather, construction plastic products, plastic products for daily use, plastic woven bag and BOPS sheets of Zhejiang province take up a large share in the Chinese production.

Besides, the province is powerful in design and manufacturing of plastics processing machinery and molds. Ningbo has become the biggest injection molding machine production base in China, with output taking up more than 50% in the country.

Shanghai is the economic center of China, however, influenced by the recent years’ intensive industrial restructuring, its plastic product industry has further downsized, with current output accounting for only 2% or so of the national output.

In other words, the production of the low-end plastic products, which are produced in large quantity and have a wide scope, has been decreasing in recent years.

On the other hand, the plastics industry in Shanghai has gradually shifted its focus of development to new high-tech materials, e.g. the engineering and modified plastics that are used in high-end applications like automotive and E&E, restructuring Shanghai to be a hub of new material production and development.

Shandong province is a big agricultural province in China. With increasing demand for agricultural films and post processing volume, it is the largest producer of agricultural films in the country.

Tongcheng of Anhui province is the home to more than 1,000 plastic bag manufacturers, and has become one of the three major bases of printing and packaging in China.

Zhangjiagang of Jiangsu province, on the other hand, is a large producer of injection blow molding machines and mixers, with the output accounts for more than 45% of the national output.

Industry alliance formed in Central and Western regions

In recent years, in the wake of the promotion of the Belt and Road Initiative and Made in China 2025, and because of the tightening of resources and increasing labor cost in Eastern China, the infrastructure and investment environment in Central and Western China has gained rapid development.

On March 9, 2018, seven plastics industry associations in Central and Western China jointly initiated the China Central and Western Regions Plastics Industry Alliance (CCWPA) in Zhengzhou, Henan province. On May 8, the Alliance was officially established. The Henan Plastics Association was designated as the first chairing unit of the Alliance.
Automotive is the pillar industry of Wuhan.
Chongqing Liangping Industrial Park is a provincial and municipal industrial park approved by the National Development and Reform Commission. The Park occupies an area of 50km2 and is the stronghold for promoting centralized and sustainable development of targeted industries. It targets to become a RMB 100 billion industrial park that influences the development of Central and Western China.

In 2018, Liangping launched the “Intelligent Liangping” three-year action plan (2018 - 2020) and confirmed more than 60 major intelligent projects, aiming to form an industrial cluster of such fields as intelligent hardware and smart manufacturing equipment, and accelerate the construction of “Smart Liangping”.

In order to closely follow the global market and technological trends, the automotive industry of Central China has become innovation-driven and is fast growing.

As such, new energy and intelligent connected vehicle projects of Dongfeng Motor Corporation, Dongfeng Renault, SAIC-GM, Dongfeng Yangtse, Hubei CLW, Hubei Xinchufeng Automobile and other automakers were launched in Central China one after another.

On August 8, 2018, the National Intellectual Property Administration approved the proposal to set up the China Wuhan (Automobile and Parts) Fast Intellectual Property Protection Center, which offers fast support for the protection of intellectual property rights in the automotive industry and helps local industry transform and upgrade.

The automotive industry of Wuhan Development Zone is developing with momentum. Its output reached RMB 251 billion in 2017, and the production and sales reached 1.2 million vehicles.

In particular, there are nearly 1,000 automobile part enterprises, with total output estimated to account for over 20% and surpass RMB 50 billion.

The challenges and opportunities ahead

While making significant progress, the Chinese plastics industry faces difficulties and challenges at the same time. Due to increase in petroleum and coal prices, logistics and freight, labor cost and depreciation of RMB, the price of the raw materials and plastics has been rising sharply. The production cost of downstream plastic product manufacturers is also difficult to control in recent two years.

To cope with these, the Chinese plastics industry must focus more on research and development, drive more innovations and improve its technology development.

Domestic environmental protection policies are putting more pressure on enterprises’ operations. In particular, in the Yangtze River Delta, some small-sized enterprises that are incapable of getting market shares through product innovation and function upgrade will be forced out of the market.

However, medium and large-sized enterprises dare to innovate will develop well. Therefore, the strong become stronger and the weak turn to be weaker. In other words, the industry transformation and enterprise integration will be faster.

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