Chinese group leader wants diplomatic approach

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: October 15, 2013 3:28 pm ET
Updated: October 15, 2013 3:30 pm ET

Related to this story

Topics China, Machinery, K 2013, Business News & Features

GUANGZHOU, CHINA — China’s plastics machinery industry has changed a lot in the last six years — by one estimate it has overtaken Germany to be the world’s largest production base of plastics equipment, and it now accounts for 30 percent of the global market.

While that could be cause for cheering, the new chairman of the China Plastics Machinery Industry Association seems more focused on the challenges facing the industry, including a slowing domestic market and handling potential restrictions on exports of Chinese equipment.

Borch Zhu, who took over as chairman of the Beijing-based group in May and whose term runs until at least 2017, said he sees his most important job as a diplomatic one, building bridges with counterparts around the world.

Given the challenges, the diplomatic skills will come in handy, with India imposing steep tariffs on Chinese-made plastic molding machines and European associations raising questions about the safety standards of Chinese imports.

Zhu, who is also president of Guangzhou-based injection molding machinery maker Borch Machinery Co. Ltd., takes over after a period of rapid development.

China’s $7.3 billion market for plastics equipment now represents more than 30 percent of the world’s $24 billion market, according to Haitian International Holdings Ltd., China’s largest injection press maker.

In 2007, China ranked No. 2 in worldwide plastics machinery production, with a 15.9 percent share, while Germany took the top spot with 24.7 percent.

But by 2011, that had flipped, with China accounting for 30.5 percent and Germany taking the second spot at 22 percent, Haitian said, citing figures from the German machinery association and various national statistics offices.

While the growth indicates that CPMIA needs a louder voice in the world, Zhu also said the Chinese industry faces many challenges — most immediately the slowdown in China’s manufacturing economy and last year’s flat sales in plastics equipment — and more long-term, the need to change perceptions of Chinese equipment.

Too often, he said, Chinese equipment is seen as low- to mid-level, but it needs to upgrade to mid- to high-level.

“This is a very painful transition,” he said. “We cannot only be the champions of quantity, but the champions of quality, of environmental protection, saving power, of automation.”

To help Chinese firms modernize, Zhu said he wants CPMIA to build more direct data and information exchanges with other associations, have stronger links on standards for technology, safety and other topics, and promote more cooperation between Chinese companies and global firms.

Zhu is also directing his attention to a few political issues.

He said the CPMIA is paying close attention to whether the Indian government will renew its steep anti-dumping duties on Chinese-built injection molding machines during a five-year review in May.

Zhu said the duties are a big issue for CPMIA members, although he maintains that it’s hurt Indian molding companies more than Chinese equipment suppliers, by raising prices for their equipment. Some Chinese companies have built factories in other countries in part to avoid the duties, he said.

The CPMIA is also monitoring moves in Europe questioning the safety of Chinese imports.

The Italian machinery association, Assocomaplast, for example, began a program several years ago subjecting imported machines from around the world, but in practice mostly Chinese, to detailed safety inspections.

Zhu said the CPMIA supports tough safety standards.

“If the requirements are very strict it is not a bad thing for China,” he said. “It will push the Chinese manufacturers to improve their safety standards.”

But he said the concern for Chinese industry is whether it is being treating fairly.

While most of the Italian inspection program has been directed at Chinese imports, and Italian officials said they found safety violations in 90 percent of the equipment, Zhu declined to say if he thought the Chinese industry was being treated unfairly.

He said there could be cultural differences and that he wanted to better understand what was driving the decision.


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Chinese group leader wants diplomatic approach

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: October 15, 2013 3:28 pm ET
Updated: October 15, 2013 3:30 pm ET

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