BLOG: Challenges facing China as it tries to bridge the rural-urban wealth divide

John Richardson

27-Sep-2021

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

The second slide in today’s blog post is a perfect example of “glass half full, glass half empty”.

Those who always see a glass as half full will see the 66% of the Chinese population who only consumed 45% of the country’s polyethylene demand in 2020 as a huge opportunity. China’s “common prosperity” policy pivot could put this right, unlocking fantastic, stellar growth.

Make no mistake, by the way, the shift to “common prosperity” could well be the biggest even in the petrochemicals industry since at least the Global Financial Crisis. The debt problems at the Chinese property developer Evergrande are a symptom of this new direction.

On to the “glass half empty” view. There are reasons to believe that China will fail in its bid to narrow the yawning rural-income divide, which explains why the other 34% of China’s population accounted for 55% of PE demand in 2020. We explore the reasons in today’s post.

Failure to narrow the divide would derail “common prosperity”, leaving China searching for another sustainable growth model.

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

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