Petrochem industry estimated to grow by 15% in China

11-Apr-05

China's petrochemical industry collected revenue of 24.2 trillion yuan (US$2.9 trillion) in 2004, up 32.5% year-on-year, and profits rose by 58.7% ; to 2.8 trillion yuan (US$337 billion). This indicates that the growth of the Chinese petrochem industry is almost twice the average level of industrial growth in the country. After an all-time high of industry sales revenue and profits in China in 2004, this year too seems poised for robust growth. Rising demands for petrochemicals from the domestic and international markets will fuel the further expansion of the Chinese petrochemical industry, estimated to have a robust growth of at least 15% this year. The projected fast growth of China's petrochemical related sectors including automobiles, electronics, textiles and property in 2005, the major contributors to the estimated 8% gross domestic product increase, will further boost domestic demand. The continued high oil price on the international market is also conducive to the growth of China's oil and gas upstream sectors. The economic growth pattern since the opening up of the economy and reforms of the 1980s has resulted in industrial structure imbalances in the petrochemical sector, which are now a major bottleneck to the sector's further growth. In an effort to stabilize production and advance the industry's competitiveness on the global stage, the government has drawn up a host of measures to optimize the industrial structure of China's petrochemical sector. These measures aim to improve the production of agriculture use petrochemicals, diversify products to reduce dependency on exports, and encourage the growth of traditional petrochemical and to promote investment in advanced technologies in eastern areas and make the most of the rich energy resources in the west. Statistics show that energy consumption in the petrochemical sector accounts for about 40% of the country's total, and the sector's energy consumption per unit produced is 4.1 times higher than in the United States and Canada. The government plans to adopt measures such as tax reduction to encourage energy conservation.