By: Steve Toloken
September 26, 2013
TAIZHOU, CHINA — China's plastics processing industry continued its slower pace of growth in the first half of the year, with exports in particular seeing a slowdown caused by global economic uncertainty and rising costs hurting competitiveness, according to the country's main plastics trade association.
The country's plastics industry grew 8.1 percent in the first six months of 2013, roughly the same as 2012 but still significantly slower than the 22.3 percent growth in production volume that plastics processors saw in 2011, according to the Beijing-based China Plastics Processing Industry Association.
Exports seemed to bear the brunt, with the value of shipments rising just 1.77 percent, to 636.6 billion Chinese yuan ($104 billion) in the first half, CPPIA said in figures released Sept. 25 in at the Asia Plastics Forum, a gathering of Asian plastics trade associations, held in Taizhou, China.
"The Chinese plastics processing industry has a large overcapacity, labor costs are up and the renminbi is appreciating," said CPPIA Secretary General Ma Zhanfeng. "We need to move from low end consumer products to higher products."
CPPIA told the APF meeting that China's plastics processing industry is the world's largest, with production volumes of 29.3 million tons in the first half of the year, accounting for between 20 and 25 percent of global production.
"China's plastics processing industry has become the No. 1 in the world in terms of volume and capacity, but we are also facing a severe situation since 2012," he said. The overcapacity in most plastic products is leading to more intense competition for companies in lower-level products, he said.
While CPPIA predicts stable growth for this year, economic data indicates the industry's restructuring to more sophisticated manufacturing remains very much a work in progress, Ma said.
For example, he said that figures show that China's plastics product exports have only about one-third the value of imports — 21.8 yuan ($3.56) per kilogram for exports vs. 62.8 yuan ($10.27) per kilogram for imported plastics goods.
"This indicates that most of the plastic products exported from China are still low- and middle-end products, and we need to adjust such export product structure as soon as possible," he said.
He told the APF meeting that China's former low-cost advantages have begun to disappear, requiring more emphasis on technology upgrades and innovation.