Home Blogs Chemicals and the Economy The other side of the China debate

The other side of the China debate

Chemical companies, Consumer demand, Economic growth, Financial Events
By Paul Hodges on 30-Apr-2011

Liveris.jpgThere are always two sides to every debate.

Dow Chemical CEO, Andrew Liveris, clearly has a radically different point of view to the blog’s about the likely outlook for China’s demand.

Liveris told analysts in this week’s earnings call that “any indications of high inventories (in China) are likely to be transitory“. As ICB editor Joe Chang reports, he went on to describe China demand as “quite robust“, arguing that:

• “There is some decline in credit growth due to tightening to curb inflation, but the Chinese run a fairly directed economy, so it’s really to avoid the speculative side on property
• “Household savings are still very high and the government’s 5-year plan is to stimulate the domestic sector. So any aberrations of the inventory kind are very short term”
• “They’re spending on infrastructure, energy, the environment, new materials for aerospace and automotive, and that is all very directed
• “In the next five years, they want to spend $1.7 trillion (€1,120bn) in these sectors“.

Liveris concluded that “I don’t think we have a lot to worry about in the short term“.