Chemical Industry in China

China Chemical Industry holds the third position in the nation. Though it has got a ranking after the Textile Industry and Machinery Industry, it contributes almost 10% of China’s GDP. China Chemical Industry has established a consistent growth path over the years. In 2004, it recorded a 30% increase in production of petrochemicals. This achievement awarded the China Chemical Industry the tag of the fastest growing industry in China.

Though the productive capacity of China Chemical Industry is awesome, it suffers from crisis of raw material and resources that are required for producing chemicals and Chemical Products. For the raw materials and resources, China Chemical Industry is dependent on Imports. Therefore upward price trends of petroleum and other chemical inputs are causing much disturbance to China Chemical Industry. Other than the shortage in raw materials, China Chemical Industry also suffers from Limited Energy Supply, Transport Problems and Electricity Shortages. The infrastructure also requires to be improved to maintain the growth rate.

Despite these problems, the China Chemical Industry is growing due to Strong Demand for Chemicals within the country and also owing to the Cost Advantages that China Chemical Industry enjoys over the Western Chemical producing countries. Moreover, many local Chinese companies are involved in the process of setting up extensive production capacity. Not only the local companies but the Western Multinationals are also investing in China Chemical Industry. So, the increase in production capacity of China Chemical Industry is mainly contributed by the Direct Investments in form of cooperative.   

As a result of all these initiative, the Chinese Economy is expecting that China Chemical Industry will be able to increase its world market share to 13% from present 8% within 2015. According to a Deutsche Bank survey, China Chemical Industry is going to experience a tremendous Growth Boom in the near future which will place China Chemical Industry in the rank of second largest Manufacturer of Chemicals only after U.S.