SINGAPORE (ICIS) – Click here to view the latest blog post on Asian Chemical Connections by John Richardson.
The ‘paradigm shift’ cliché is so overused that it can often be meaningless.
Not in this case, however. There is no doubt that China is undergoing a profound paradigm shift where changes in government policies mean that real estate will no longer be such an important economic driver.
A new study reveals that no other economy is or has been as dependent on real estate as China. The real estate sector represents 29% of Chinese GDP.
This shift in real estate policies, combined with decarbonization, has HUGE implications for the global petrochemical industry.
Focusing only on the short-term implications for polyethylene (PE) in today’s post, don’t expect the traditional improvement in demand in the fourth quarter.
Total Chinese PE demand was already heading for a reduction of 1.6 million tonnes from 2020, even before the Evergrande crisis accelerated and the government’s firmer focus on “common prosperity”.
And PE imports were already heading for a reduction of 3.4 million tonnes – again before the policy changes.
The results of PE demand and imports in 2021 could now be even worse.
Editor’s Note: This blog post is an opinion piece. The opinions expressed are those of the author and do not necessarily represent those of CIHI.