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.
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