China chemical industry to grow global market share to 13% in 2015

13 July 2011 11:22  [Source: ICIS news]

SINGAPORE (ICIS)--China’s chemical industry is expected to grow its global market share to 13% in 2015 from 8% this year in line with the country’s strong economic growth, a consultant said on Wednesday.

“There will be a gradual shift in the chemical market from North America, western Europe and Japan to China, India and other emerging regions [in Asia],” said Daniel de Blocq van Scheltinga, managing partner at Hong Kong-based financial and strategic advisory firm, Polarwide.

However, constrained resources in Asia will be a hurdle to the growth of the Chinese chemical industry, said de Blocq Van Scheltinga, who was speaking to delegates at the 5th Asian Aromatics & Derivatives Conference in Singapore.

Insufficient supply of oil in the face of soaring energy demand, high inflation, rising wage costs and lower production costs in other emerging markets in Asia, such as Vietnam, Indonesia and India, may derail growth in China’s chemicals market, he said.

“Reforms are needed to maintain the edge of lower cost,” de Blocq Van Scheltinga said.

“Already, labour costs [in China] are higher than [in] Vietnam, Indonesia and India,” he added.

Tight monetary policies undertaken by the Chinese government to curb high inflation may also hurt the country’s economic growth and introduce a credit crunch for companies, de Blocq van Scheltinga said.

Insufficient returns from the country’s heavy investments in infrastructure may also result in bad debts in the Chinese banking system, he added.

The 5th Asian Aromatics & Derivatives Conference runs from 13-14 July.

By: Nurluqman Suratman

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