As the largest global market for ethylene derivatives and a rapidly industrialising economy, the standard expectations are for China to move towards greater self sufficiency, However, China’s self sufficiency is projected to peak in 2018 and then decline. This reflects the growing pre-eminence of gas-based feedstocks for ethylene production in locations such as the US, which will see them become leading sources of new ethylene supply though to 2030. Consistently dominant Middle East supply plus a new wave forecast to come from Russia and the Caspian will add to US exports to create tougher competition for Asian producers.
Wood Mackenzie says that China is and will remain the overwhelming contributor to ethylene equivalent demand growth. Mr Vince Sinclair, Head of Asia Pacific Petrochemicals Research says, "China is already a maturing ethylene market so year-on-year growth will not be large on a percentage basis.  However this still translates into 2 mln tpa of ethylene equivalent growth and China will still make up close to 50% of the 90 mt world growth in ethylene equivalent demand from 2014-2030. For a developing economy the size of China, a fast pace of capacity build may be expected to keep up with demand and reduce import reliance. However, China will see ethylene equivalent self-sufficiency peak at around 50% in 2018, before declining below 45% by 2030. It will be one of the primary target markets for new ethylene equivalent export supply, with imports of ethylene equivalent forecast to double by 2030 to over 40 mt. We see this as a consequence of Chinese National Oil Companies (NOCs) hesitance in investing in ethylene capacity with high capital spend plus resistance to industrial projects based on increasingly vocal environmental concerns. Despite more cautious NOC investment, domestic production growth will continue to increase, but from a more diverse range of ethylene feedstocks. Meanwhile, a steady increase in export-oriented supply from the US has occurred due to the shale gas discovery in North America. Additionally, other advantaged feedstock locations including the Middle East and Russia will act to further discourage NOCs from making investment decisions in expensive cracker projects. Sinclair puts expected US exports to China into context, "The US will more than double its exports of ethylene equivalent from now to 2030. By then, it will have increased exports of ethylene in just the major derivatives to around 17 million tons. This level of surge in exports will be reminiscent of the surge of Middle East exports to China in 2008-2011. The Middle East will retain top spot as the largest supplier of ethylene derivatives to China through to 2030, accounting for up to 40% of world trade. A third, albeit smaller wave of competitive export supply is also expected to develop in Russia and the Caspian, as it leverages its local hydrocarbon abundance."

Developments in the China coal chemistry sector will counter some of the impacts of additional ethylene derivative imports into China from other regions, beginning with the success of China's first Coal-To-Olefins (CTO) plant by the Shenhua Group in Baotou, Inner Mongolia. The local coal and petrochemical industries have been actively seeking similar investment opportunities due to the abundance of cheap domestic coal resources in China. Although there has been a lot of excitement around coal-based ethylene projects in China, limitations on water resources and the threat of environmental pollution will dampen the rate of capacity build-up well below what has been announced to the public sector. As much as 11 million tons of coal/methanol-based capacity has been announced from 2013 to 2020 but only a few projects totalling 3.7 mln tons of ethylene received National Development and Reform Commission (NDRC) approval as of end-2013.
Sinclair concluded, "although coal based chemistry will increase in China, it will not be enough to materially increase the self sufficiency of the country. Current and future developments in advantaged feedstock in other parts of the world will have an impact not just on how export availability will develop until 2020, it will go beyond to impact global trade and the competitiveness of the Chinese market through to 2030. Ultimately, the pace of investments in new naphtha based Chinese steam crackers will be adversely impacted; thus reducing the country’s ability to satisfy its own demand growth. With China remaining central to the global demand picture, highly advantaged supplier such as the US and Middle East will see increased opportunities within China. This translates to stiffer competition for other Asian producers targeting the Chinese market."