BLOG: China polyolefins 2022 growth and import risks increase

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

China’s polyethylene (PE) and polypropylene (PP) demand growth in 2022 could average just 1% with very steep declines in imports possible.

The early data for this year mirrors what happened in early 2020 – but then, bang, look what happened: China enjoyed an export-led recovery as it supplied most of the durable goods that rich Westerners bought during lockdowns.

But this time could be different. Inflation at its highest levels since the 1970s and further supply chain threaten China’s exports.

The old “China put option” – the worst thing are the better they will soon become – may also no longer be valid. On so many occasions over the past 20 years, China has rescued faltering economic growth with big domestic stimulus.

But consider on this occasion:

• China being unwilling to go really big on stimulus because it would set back its vital Common Prosperity economic reform agenda.
• The danger that, even if it decides to go for big stimulus, a prolonged struggle to bring its latest outbreak of the pandemic under control may limit the benefits.

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.