China's sales of plastic pipes ranked as the highest in the world, registering a growth of 15% pa, as per the China Association of Plastic Processing Industry. However, this sector is plagued with several issues like overcapacity, low quality, environment issues and competition from PE pipes.

The huge market capacity and low threshold of access have made the plastic pipe sector a hot spot of investment in China in recent years. But the effects of over investment and overcapacity of production of low-end products have started surfacing in this sector. Processors manufacturing PVC pipes have a chunk of the market share, but their production is still focused on water supply and drainage pipes and fittings, leading to saturation of the market and fierce competition. To capture market share in an overcrowded supply scenario, some enterprises have adopted price-cutting policy. Few small enterprises have dumped poor-quality products at very low prices, making competition grow fiercer.
Since 2003, pipe processors have been faced with mounting pressures from price hike of raw materials, particularly PVC. Several small and midsize enterprises faced with difficulties and are on the verge of losses.
To add to their problems, PVC pipe producers are faced with the problem of a ban on the use of lead. Conventionally, lead salt has been used as a main heat stabilizer in PVC pipes in China because of the advantages of low price and fine performance. For the purpose of environmental protection, the Ministry of Construction issued an announcement in 2004, for the nationwide use of CPVC water supply pipes produced with non-lead-salt stabilizer. Beijing Municipality restricts use of PVC drinking water pipes made with lead salt stabilizer as of April 1, 2005. Concurrently, China's electric power sector also bans the use of lead-salt and organic tin stabilizer in CPVC protection pipes within the licensed part of power grids in order to prevent from environment pollution. Alternatives to lead salt stabilizer are high in prices, thus increasing the cost of production of pipe products.

The fast growing PE pipes, besides their original market shares of gas and heating pipes, have made an entry into the market for water supply and drainage pipes and fittings for urban and rural use. At the same time, the price rise rate of PE is smaller than that of PVC, exerting smaller pressure on production costs.

Despite these issues, a boost in real estate market and transformation of urban public utilities will propel China's demand for plastic pipes that is expected to continue growing in the coming years.