Post-pandemic Trends in China's Chemical Raw Material Exports

Chemicals and New Materials: Industry Prosperity Expected to Recover, Import Substitution Will Be the Main Theme.

In 2023, the chemical industry is expected to rebound from the bottom, benefiting from stable domestic economic policies gradually being implemented, among other factors. Independent substitution technologies will continue to be introduced, and companies may embark on overseas expansion or usher in a new round of hotspots. China's chemical industry has continuously improved its technical level and production capacity in recent years, enabling it to produce higher quality chemical products. This will help increase the competitiveness of China's chemical raw material exports.

Trend 1: Industry Trends Bottoming Out and Rebounding, Industrial Supply and Demand Improving

Since 2022, factors such as rising inflation, the Fed's interest rate hikes, and other downward pressures on the global economy have led to significant downward pressure on China's economy due to the repeated outbreaks of the pandemic and downward factors in industries such as real estate. Downstream demand has been sluggish, and the chemical industry has been in a slump. In 2023, as the global pandemic is gradually brought under control and the economy recovers, international demand for chemical products is also expected to gradually recover. This will create more opportunities for China's chemical raw material exports. Along with the gradual slowdown of the Fed's interest rate hikes, the faster implementation of a package of stable economic policies and follow-up measures in China, domestic demand is expected to recover overall. Especially in the chemical industry, the introduction of support policies for industries such as real estate in China is expected to boost the prosperity of relevant upstream chemical products and raw materials. At the same time, due to geopolitical influences, the tight supply of natural gas in Europe has deeply affected the production capacity of local chemical enterprises, creating greater room for China's chemical enterprises to supply overseas markets.

Trend 2: The process of domestic substitution continues, and the upgrading of Chinese enterprises going global is expected.

In recent years, the continued driving force of deglobalization has prompted domestic chemical companies to build their own technological competitiveness, making import substitution the main theme of the future chemical market. Currently, Chinese chemical companies are accelerating the process of domestic substitution, actively promoting independent research and development of leading technologies, supply chain reshaping, and screening of alternative products.

Trend 3: The Importance of Soft Power is Highlighted, Brand Marketing Gradually Becomes the Focus.

With the improvement of the hard skills of technology research and development and lean production in domestic chemical enterprises, the enhancement of soft power represented by brand marketing has also gradually become a focus. In the digital age, due to the significant reduction of information barriers, B-end (enterprise user business) customers have increasingly high requirements for service experience and product performance, and their expectations for the experience of high-quality solution development have gradually developed throughout the entire lifecycle. Against this backdrop, chemical companies are beginning to consider whether their existing corporate culture, brand marketing and other soft power can meet current customer needs and provide them with better services. XiMi group leaders in the chemical industry typically focus on brand value dissemination and strive to achieve outstanding customer experiences. They integrate customer experience into their corporate thinking and strategically shift from a product-centric approach to a service and solution-centric approach.

Trend 4: Strong Government Support and Increasing Demand in Emerging Markets

The Chinese government has always been committed to promoting the development of the chemical industry and has implemented a series of supportive policies, including encouraging technological innovation, strengthening environmental protection, and promoting international trade. Among them, the Chinese government has also been actively promoting the "Belt and Road" initiative, which will open up more markets for China's chemical raw material exports. Through the "Belt and Road" initiative, Chinese chemical companies can establish connections with more countries and regions, and explore new trade opportunities. At the same time, as the global economy transforms and develops, the demand for chemical raw materials in some emerging markets is also growing. For example, markets in India, Southeast Asia and other regions are rapidly increasing their demand for chemical products, which will create more opportunities for China's chemical raw material exports.

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