China's plastic industry should resume double-digit growth in the second half of the year, after stumbling from the global economic crisis, the head of China's largest plastics industry association said June 24 at NPE2009 in Chicago.
Liao Zhengpin, president of the China Plastics Processing Industry Association, said the industry grew 9.3 percent in the first four months of the year, as China's gross domestic product growth slowed to 6.1 percent overall.
Liao added that Beijing's stimulus spending and other factors are expected to push plastics growth back above 10 percent in the second half of the year.
Still, he said, China's plastics industry faces challenges, such as significant technology gaps with developed economies.
He said China's economy would continue to be dependent on advanced foreign technology for upgrades, and called for additional international exchanges.
Liao said Chinese companies still have to put additional spending into research and development and move away from producing lower-value products dependent on cheap labor.
High-value-added products are still lacking, he said.
CPPIA statistics show that China's plastics processing industry has taken a significant hit from the slowdown that began late in 2007 in developed economies, as China's plastic product exports to the United States fell 18.5 percent in the first quarter of 2009.
Exports to the European Union dropped 17.3 percent, and exports to Japan fell 7.7 percent.
But those declines were offset by growth in China's domestic economy, including a boost in government stimulus spending and reconstruction in China's Sichuan province after last May's massive earthquake.
With rising costs in coastal areas and government attempts to boost local economies in China's less-developed western areas, plastics industry growth is shifting from provinces like Guangdong, Zhejiang and Jiangsu to western locales including Inner Mongolia and Guizhou, Liao said.
Chinese industries such as building products are doing well, where growth in sheets, tubes and profiles topped 32 percent in 2008, according to CPPIA
There is a sustained and rapid growth of plastic production and market demand remains strong, the group said in a news release.
Liao also unveiled some of the industry's plans for the Chinaplas 2010 trade show, to be held April 19-22 in Shanghai.
He said Chinese plastics officials are planning a summit with leaders of the Japanese plastics industry, and a news conference with leaders of the Society of the Plastics Industry Inc.
In addition, mainland Chinese plastics leaders have planned another industry summit meeting with their Taiwan-based counterparts in March 2010 in Taipei, the island's capital, Liao said.