China has nearly doubled its chemicals capacity in five years and now accounts for about half of global output of certain products, putting pressure on foreign rivals. A Rhodium Group report found China's industry is moving into higher-end segments formerly dominated by foreign companies, raising tensions with the EU and US.
Chinese producers are displacing foreign counterparts across production and supply chain channels. Exports to advanced economies are rising while China also outcompetes incumbents in faster-growing emerging markets. The chemicals trade surplus is on track to exceed $1.2tn this year.
The EU opened three anti-dumping investigations into Chinese imports in September, while Beijing retaliated against European exports of a chemical used for dyes and pharmaceuticals. China has boosted investment in manufacturing after a property sector implosion.
Production of plastics ingredients soared: styrene up 97%, ethylene up 80%, polyethylene up 75%, polypropylene up 71% and PVC up 15% between 2020 and 2025. Exports grew rapidly apart from ethylene, averaging over 40% annually. However, profits have declined — up to 31% of chemicals producers and 29% of plastics and rubber makers were lossmaking.
Source: Financial Times Companies · Summarized by HeadlinesBriefing