The
chemical industry of China is expected to face a number of challenges
but not without enjoying its share of opportunities. Urbanisation, increasing
investment in infrastructure projects and growing consumer spending will be
major sources of demand for bulk chemicals, specialty chemicals and high
grade polymers.
The
government is currently engaged in improving domestic consumption. The growing
population and household income, increasing consumers and governmental support
for domestic consumption are reasons to be optimistic. The retail market is
likely to witness exponential growth and private consumption will account for a
greater share of GDP, from 35 per cent in 2009 to 40 per cent in 2016. Consumer
electronics are expected to grow by 23 per cent per year between 2008-2015.
With
continuity in urbanisation consumption sources will also increase. China will
likely achieve an urbanisation level of 60 per cent by 2020. Development of
infrastructural facilities is on top of the priority list of the government and
is also planning to use efficient transport logistics to link the country
together.
Settling
the rural workers into city life could cost around RMB 650 billion a year.
About 390 million more people from rural areas are expected to be urbanised
before 2030. The government will have to spend around RMB 51 trillion (USD 8.3
trillion) to complete the process of urbanisation. Theses figures indicate that
China's domestic consumption may increase from RMB 16 trillion in 2011 to RMB
30 trillion in 2016.
The
urbanization process will also improve infrastructure construction and
investment in many related industries. Increased building construction and
output in the manufacturing sector will drive gains. Changing building codes to
limit energy use in building applications as we all as measures to limit energy
consumption in manufacturing processes will further growth of the industry.
Building
construction sector will continue to account for over two fifths of China's
insulation demand. Construction is expected to witness a growth of 24 per cent
until 2015. Urbanization, with greater focus on green buildings will spur
further growth.
Water
treatment is also growing at a fast pace. Increased water stress and
environmental concerns in China generate huge potential for water treatment
chemicals. The water treatment chemicals market is expected to be worth USD 3.3
billion a year by 2018.
Waste
water treatment chemicals sector is also expected to witness major growth.
Chemical firms have been engaged in developing green chemical products and nanotechnology
to make the waste water treatment programme more effective.
Urbanisation
and stable demand for automotive, wind & solar energy, water treatment,
consumer electronics, packaged foods, construction sectors and water treatment
will increase consumption of fine and specialty chemicals.
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