In the run-up to this year's Chinaplas show, I was very interested in how two divergent trends would play out — a more difficult economic situation, balanced against China's continuing growth and the need for its plastics industry to modernize.
The show, which is roughly the size of Germany's K fair and twice the size of NPE, continues to get larger. This year's edition of the annual fair topped 155,000 attendees and 3,400 exhibiting companies, making Chinaplas easily the largest plastics industry trade show in 2017.
China continues to be a driver for plastics demand globally. Consulting firm IHS Markit projects that China will account for a little more than half of the global growth in demand for polyethylene, that workhorse resin of the industry, through 2021.
Of course, the economic difficulties are widely reported.
The American Chamber of Commerce in Beijing came out with a report in April that warned of a deteriorating environment for foreign firms and argued that "2017 will likely be one of the most challenging years in decades for U.S. companies in China."
Chinaplas tended more toward the optimistic picture.
Battenfeld-Cincinnati, for example, said it was experiencing two years of growth of 20-plus percent at its China manufacturing plant as the country continues large infrastructure spending, which fuels demand for higher-quality plastics pipe.
Other foreign suppliers to China's industry made similar statements about how local companies are upgrading, and that provides a generally positive outlook on their long-term demand.
The global machinery industry came to Chinaplas pushing the same Industry 4.0 technology around increasing automation and digitization as it does at other global shows.
The German machinery trade group VDMA, for example, held its second annual Industry 4.0 conference at Chinaplas, which ran from May 16-19 in Guangzhou.
In general, executives said China's plastics processing companies are still struggling with bringing automation and technology upgrades into their factories. But the Chinese industry is keenly interested, both because of rising labor costs and because of the government's Made in China 2025 plan, launched in 2015, for domestic upgrading.
Foreign executives talked about how China Manufacturing 2025, as it's also known, will boost their sales. It calls for tripling China's use of industrial robots, for example.
But one overseas business group, the European Union Chamber of Commerce in China, said in a March report that parts of CM2025 favor domestic industry.
For example, it said European businesses in the new energy vehicle industry in China, an area of keen interest in the plastics supply chain, are under "intense pressure to turn over advanced technology in exchange for near-term market access."
EUCCC also said that government subsidies for industrial robotics are contributing to overcapacity in the low- and mid-tiers of that market.
Those big picture policy questions don't get talked about much at a show like Chinaplas. It may be that plastics is not a critical enough industry to warrant the attention that more prominent sectors like new energy vehicles get.
These policy concerns are not unique to China. The German machinery industry, for example, has been vocal about criticizing what it sees as protectionism from the new U.S. administration.
It wasn't clear to me from the fair how much those big policy questions about China will impact the plastics industry. They're clearly in the background for the industries that plastics firms supply to.
But it was clear from the size of Chinaplas and the big turnout of global exhibitors that the Chinese economy will continue to be a major driver for the world's plastics industry.
Toloken is news editor — international at Plastics News. Follow him on Twitter @Steve_Toloken.
