China’s new stimulus policy – A good sign for chemical markets?

CHINAS STIMULUS POLICYThe economic growth in China is slowing down and Sino-US trade war is undergoing during the economic downturn, which have caused weak demand. Under such urgent circumstances, there come increasing export tax rebate and rumour of 50% cut to car purchase tax which have drawn attention from chemical market. From ICIS view, these 2 policies can benefit petrochemical market and alleviate market supply pressure in short term. In long term, increasing export tax rebate can help more China petrochemical products to be part of global trade considering that 7 world-class integrated refinery and petrochemical bases will be built. What is important is that new petrochemical trade surplus and deficit status worldwide will occur, especially Asia, which will result in new global trade flow. 50% cut to car purchase tax is difficult to have long-term effect. The combination of policies is needed to stimulate domestic demand.

Key topics covered:

  • Increasing export tax rebate can relieve the negative impact caused by Sino-US trade war on enterprises who export petrochemical terminal products and promote petrochemical material to export more at the same time.
  • After integrated refinery and petrochemical bases will have been built, increasing export tax rebate will alleviate market supply pressure by enabling domestic products to be part of global trade and influencing global trade flow.
  • 50% cut to car purchase tax can only stimulate domestic demand in short term. The extra demand for upstream material created by the policy is limited.
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AcidsAlcoholsAromaticsBase Oil / Lubes / Motor OilButadiene / C4 / ElastomersFertilizers / Agri ProductsFibre ChainIntermediatesOlefinsOleochemicalsPhenolics, Chlor-alkaliPolymers / Polyolefins / ThermoplasticsSolventsSurfactantsUpstream FeedstockPolyurethane chainSpecialty ChemicalsOther
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Oil Refinery / Refinery Gases / PetroleumNaphthaAcidsAlcoholsAromaticsBase Oil / Lubes / Motor OilButadiene / C4 / ElastomersFertilizers / Agri ProductsFibre ChainIntermediatesOlefinsOleochemicalsPhenolics, Chlor-alkaliPolymers / Polyolefins / ThermoplasticsSurfactantsSolventsOther
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CHINAS STIMULUS POLICY

The economic growth in China is slowing down and Sino-US trade war is undergoing during the economic downturn, which have caused weak demand. Under such urgent circumstances, there come increasing export tax rebate and rumour of 50% cut to car purchase tax which have drawn attention from chemical market. From ICIS view, these 2 policies can benefit petrochemical market and alleviate market supply pressure in short term. In long term, increasing export tax rebate can help more China petrochemical products to be part of global trade considering that 7 world-class integrated refinery and petrochemical bases will be built. What is important is that new petrochemical trade surplus and deficit status worldwide will occur, especially Asia, which will result in new global trade flow. 50% cut to car purchase tax is difficult to have long-term effect. The combination of policies is needed to stimulate domestic demand.

Key topics covered:

  • Increasing export tax rebate can relieve the negative impact caused by Sino-US trade war on enterprises who export petrochemical terminal products and promote petrochemical material to export more at the same time.
  • After integrated refinery and petrochemical bases will have been built, increasing export tax rebate will alleviate market supply pressure by enabling domestic products to be part of global trade and influencing global trade flow.
  • 50% cut to car purchase tax can only stimulate domestic demand in short term. The extra demand for upstream material created by the policy is limited.

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