Chemical industrial growth hits 6-year high

According to a report released by the Ministry of Industry and Information Technology, China's petroleum and chemical industry performed well in 2017 and the economic growth hit a six-year high.

1. General operation

(1) Production keeps stable

China's petroleum and chemical industry operated stably in 2017.

The output of ethene was 18.21 million tons, up 2.4% year on year; that of sulfuric acid was 86.94 million tons, up 1.7%; caustic soda, 33.65 million tons, up 5.4%; and calcium carbide, 24.47 million tons, down 1.7%.

The output of benzene was 8.34 million tons, up 3.7%; methanol, 45.29 million tons, up 7.1%; compound materials, 150 million tons, up 6.6%; tires, 926 million units, up 5.4%; and chemical fertilizer, 60.65 million tons, down 2.6%.

(2) Business income grows faster

There were 28,005 petroleum and chemical enterprises above designated size in 2017, the industrial added value grew 3.7% year on year, and the accumulative main business revenues totaled 13.45 trillion yuan, up 15.8%, the fastest growth over the past six years.

The chemical sector's main business revenues rose 13.8% to 9.10 trillion yuan.

The petroleum and chemical industry's profit in 2017 reached 831.36 billion yuan, rising 52.1%, the fastest growth over the past seven years, with the chemical sector's profit growing 39.7% to 607.24 billion yuan.

(3) Foreign trade expands further

The import and export of the petroleum and chemical industry totaled 583.37 billion yuan in 2017, up 22.1%, with the export increasing 12.9% to 192.98 billion US dollars. and the trade deficit rising 45.1% to 197.42 billion dollars.

(4) Structural reform optimizes

The development of synthetic resin, synthetic fiber and electrical chemicals became faster, the revenues and profits of synthetic materials, basic chemicals and special chemicals grew rapidly, and made significant contribution to the overall revenues and profits of the chemical industry.

New progress has been made in reducing excess capacities. The capacity of ammonia lessened 1.65 million tons in 2017; that of urea was down 2.8 million tons; calcium carbide, down 3.5 million tons; and PVC, down 280,000 tons.

2. Major problems

In spite of the rapid development and highlights of the petroleum and chemical industry in 2017, there are still challenges and restraints.

(1) Investment still weak

The petroleum and chemical industry completed fixed-asset investment of 2.06 trillion yuan in 2017, down 2.8%, with 1.50 trillion yuan investing in the chemical sector, down 5.2%, compared to a decrease of 2.7% in 2016.

The situation is attributable to two reasons: slow transition from old driving forces to new ones and macroenvironment.

(2) Frequent occurrence of accidents

There are nearly 300,000 dangerous chemicals producers and operators in China, while over 80% are small chemical enterprises with weak safety and protection capabilities.

According to the State Administration of Work Safety, the chemical sector had 218 accidents in 2017 with a death toll of 271 people.

Improper deployment of domestic petroleum and chemical industry is a hidden risk and safety issue.

(3) Greater pressure on petroleum and chemical import

The imports of synthetic materials and organic chemical materials kept growing in 2017, which imposed pressure on the domestic market.

Customs statistics show that the total imports of synthetic materials was 48.70 million tons in 2017, up 8.3%; the net imports was 38.81 million tons, up 8.2%; the total imports of organic chemical materials was 62.23 million tons, up 6.3%; and the net imports was 47.83 million tons, up 4.8%.

It is due to three reasons:

First, domestic market demand grew rapidly, the apparent consumption of synthetic materials and organic chemical materials rose 7.0% and 0.5%.

Second, affected by the environmental protection supervision, some producers reduced and stopped production, and the supply grew slow.

Third, there are still gaps between China's high-end chemicals and the world's cutting-edge level.

3. Key works in 2018

(1) Push forward the move and reform of dangerous chemicals producers

Concerning authorities will establish a special team for move and reform of dangerous chemicals producers, to enhance the supervision, inspection, tracing, analysis and report.

Meanwhile, expert will evaluate and discuss the implementation plans submitted by each province/autonomous region/municipality, guide and urge localities works, and summarize and spread typical lessons and experiences.

In addition, it is necessary to ensure SMEs and large enterprises with severe risks completing the move and reform before the end of this year.

(2) Bolster the weakness in chemical new materials

Centering on automobile, next-generation information technology, aerospace, rail transport, energy conservation and environmental protection, and healthcare sectors, the Implementation Plan for Bolstering the Weakness in Chemical New Materials will be constituted and implemented.

Guidance will be given to the carbon fiber and compound material industrial development alliance, electrical new material industrial alliance, in a bid to boost the application and popularity of carbon fiber, electrical chemicals, and film materials.

Establish automotive lightweight non-metallic materials industrial alliance to boost the application of engineering plastics, carbon fiber composite materials.

(3) Launch intelligent reform on chemical parks

Create chemical park evaluation system, investigate chemical parks across the country, and evaluate the chemical parks.

Support intelligent reform of chemical parks with existing funds, improve the infrastructure and public service in chemical parks, enhance the ability of the chemical parks in taking in dangerous chemicals producers.

(4) Boost integration of informatization and industrialization of chemical industry

Launch pilot operation of intelligent manufacturing and industrial Internet and publish relevant standards as soon as possible.

Establish dangerous chemical supervision and information sharing platform, integrate information resources of concerning authorities on dangerous chemicals’ supervision, build a big database, and form a comprehensive information platform managed by the government with information submitted by enterprises and information shared.

(5) Enhance serviceability, help expand investment of petrochemical industry

Enhance the connection of fiscal, tax, finance and trade policies and industrial policy, and give greater support to key enterprises and key programs.

Enhance the support to move and reform of dangerous chemical producers, technical upgrade of petrochemical industry, intelligent manufacturing pilot, intelligent chemical parks, high-end product development, green and safe production, and establishment of public service platform.

(6) Participate in BRI, help enterprises going global

Encourage tire, fertilizer, chloralkali and other key industries launching international capacity cooperation with countries along the Belt and Road Initiative.

Encourage enterprises going global. Improve fiscal and tax policy support, coordinate the petrochemical industry and the financial and insurance institutes, and address the financing demand of enterprises developing overseas markets.