The plastic processing industry in China has been confronting a number of challenges including low level of technology, high production costs, lower export (drops by 4% in 2016) and out-of-date product standard. Although the economy continued to cool down in 2016 and difficulties are expected, China remains to be the largest market and key force for global plastic industry.
2017 seems to be a promising year for the plastics and rubber industry. China’s plastic machinery trading has experienced an increase in volume yet decrease in value in the import market, while both the export volume and value rise.
The product portfolio in China is undergoing constant restructure. Significant growth is observed in the profit as well as production of daily plastic commodity, plastics components and plastic films. Meanwhile, the production of man-made leather and synthetic leather decreased, as a way to adjust to market demand change.
China is estimated to make up more than 50% the total increase in demand for polyethylene by 2021, with an estimation of demand for modifies plastics rising to 21.1 million tonnes widely used in downstream industries such as auto mobility, construction, electronic industry, military and domestic appliance.
Also, China remains to be the second biggest plastics machinery export market for Germany. Overseas suppliers are seeking opportunities as China’s manufacturers and plastics industry evolve.
Besides, here’s an increasing demand for more sophisticated, high quality products from the emerging middle class in China, which requires better machines to produce and thus generates for opportunities for foreign suppliers mostly Germany. It is critical to adopt the better automation solutions in order for companies to compete on productivity, efficiency, higher standards and accomplish better results.
Challenges are witnessed as the manufacturing sector decelerated in China. Major pressure comes from primarily the increasing labour cost, as well as rising material cost which triggers larger fluctuations.
Low level of technology posed another challenges. Although Chinese firms generate a wide interest in Industry 4.0 technology in terms of productivity improvement, there is a lack of quailed human capital and low level of understanding on how to use automation technology.
Besides customers are struggled with the fluctuating Chinese currency Yuan and problems to finance their investments and operations.
Obviously challenges are not restricted to companies in China. Foreign firms like American ones suffer from economic slowdown and are faced with the tougher investment environment in China. However, continuingly rising demand is observed of other players in the plastics supply chain, which serves as a huge driver as many companies are expanding their facilities. The key to success lies in new materials, automation and informatization.