CBI member, McKinsey & Company has published an updated study on the development of China’s chemicals industry.
The report hooks onto the fact that despite China’s chemicals industry having been the world’s largest by measure of revenue since 2011, its colossal size is not indicative of stability and new market dynamics are beginning to emerge.
The report highlights how China’s chemical market has contributed half of the growth of the world chemical market over the past two decades, but faces new pressures related to China’s economic slowdown and US-China trade tensions.
The report continues to outline the reasons why investors and companies should remain optimistic however, highlighting the fact that even if China’s growth rate was to slow to 5% per year, China would still be adding the equivalent of the annual sales of Brazil’s or Spain’s chemicals industries.
Broadening the scope to assess what is driving China’s massive growth within the chemicals industry, McKinsey’s report isolates a transition within China towards companies seeking to meet consumer demand rather than follow industrial policy.
According to McKinsey, within China’s domestic chemicals market, the area of the market with the most potential for growth is higher-end personal-care products, such as fragrances. Another area within China’s chemicals market that McKinsey has identified with potential for substantial growth is supplying chemicals for the manufacture of finished goods prioritised by the Made in China: 2025 programme.
Examples of this include, coatings and new materials for high-speed trains and advanced composites for use by China’s expanding aerospace industry.
Finally, the report identifies opportunities for foreign investors in China’s chemicals market and provides an overview of the types of financing foreign entrants can expect to be able to access when looking to enter the market.
Please follow the link to find the full report here.
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