| Economic growth in China in the year 2005 is expected to be at a slower pace, mainly due to uncertainty in oil prices. If oil prices continue to keep spiking to a higher level and beyond US$55/barrel, economic growth will slow down. Asian Bank however predicts that China will grow at 8.7% in 2006 and possibly almost 9% in 2007. Inflation is expected to remain at 3.6% in 2005 and could be lower in the next two years. The Chinese Government has taken steps to ensure that prices do not rise beyond 4%. Higher industrial growth due to higher investments and tighter economic controls could provide the required boost to economic growth.
The plastics industry however, is expected to show double digit growth for the year. Rising demands for petrochemicals from the domestic and international markets will fuel further expansion of the Chinese petrochemical industry, estimated to have a robust growth of at least 15% this year. After an all-time high of industry sales revenue and profits in China in 2004, this year too seems poised for robust growth. 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. Fast growth is also projected for China's petrochemical related sectors including automotive, electronics, textiles and property in 2005. These sectors are the major contributors to the estimated 8% GDP increase, and will further boost domestic demand. |
