China’s petrochemical industry to flourish - analysts

21 January 2010 07:04  [Source: ICIS news]

GUANGZHOU (ICIS news)--China’s petrochemical industry will flourish this year alongside continued rapid growth of domestic economy, analysts said on Thursday.

The world’s third-largest economy grew by a higher-than-expected 8.7% in 2009 while industrial growth reached 11.0%, according to official data released by the National Bureau of Statistics of China on Thursday.

The raw chemical and chemical manufacturing sector registered a 14.6% year-on-year increase, based on the official data.

Analysts estimate a double-digit GDP growth this year as the global economic recovery firms up.

"We predict that GDP would grow by a faster 10.6% this year. Demand of fuel and petrochemical products will obviously increase along with galloping economy," said Xue Hua, a macro economy analyst at Shenzhen-based brokerage house China Merchants Securities.

Dr Ba Shusong, deputy director general of Financial Research Institute, development research centre of the State Council or China’s cabinet, said the country's GDP had entered a new-round of growth cycle in 2010 and "we expect that overall growth will be 9-10% for the year".

Analysts also said the government could gradually withdraw stimulus packages and attempt to curb inflation as consumption improved and overseas demand rose.

The consumer price index (CPI), a price gauge for retail, rose 1.9% year on year in December, higher than the 0.6% in November. The production price index (PPI), a gauge for wholesale, grew by 1.7% on year in the December, the first rise in last 13 months.

"Improvements on overseas demand will spike Chinese exports and therefore relieve China’s dependence on expanding domestic demand," Xue said.

Interest rates could be hiked in the first quarter of the year, Xue added.

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By: Fanny Zhang
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