PVC growth in China has been predicted at 8% by Freedonia, a well-known market research company - mainly attributed to a boom in the construction sector as well as by advances in consumer spending and growing share of plastics in packaging applications. The construction sector will drive the growth of PVC by increase in demand for pipes, profiles and window sections. China's highly active construction sector accounted for 70% of PVC extruded products. From 8.2 million tons of PVC consumed in China during 2005, demand will grow to 12 million tons in 2010. China was the largest market for PVC in the World in 2005.

Extrusion is the most important process used to manufacture PVC products in China , with extruded products projected to make up more than half of the market in 2010. Use of PVC in pipes, windows and doors will continue to bolster the market, as China strives to reduce energy loss from buildings and to lower costs of production and maintenance. Extruded PVC demand is expected to increase by 9.2% annually to reach 6.0 million tons in 2010. The second largest use, molded products, will grow more than 6% annually through 2010, based on strong demand in packaging applications. Increasing growth in synthetic leather production will drive demand for dispersion coated PVC, which will be the fastest growing use through 2010.

China's northeast region is experiencing the strongest growth in construction activity, leading to high demand for PVC. The Central-East region, around Pearl River Delta, is the largest regional market, accounting for more than 30% of PVC use, based on the region's advantages of a highly educated work force, more developed technologies and wealthier consumer market. The second largest regional market - the Central-South, around Yangtze River Delta - consumed slightly less than 30% of total national demand. This share will shrink slightly due to the limited resources and insufficient room for further development in Guangdong province, which is the largest PVC consuming province nationwide. The Southwest and Northwest will remain the two most underdeveloped regions.

Though construction is the largest market for PVC, the PVC packaging market is also growing rapidly. Packaging will soon replace the consumer and institutional market as the second largest sector, losing market share due to competition from materials such as polyurethane. Packaging will replace it as the second largest market by 2010, with PVC making inroads into applications traditionally served by paper and metal.