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China sets out its chemical industry policy direction for the next five years

  • 30 June 2021
China sets out its chemical industry policy direction for the next five years
China’s new five-year plan (FYP) for 2021-25 has been ratified by the National People’s Congress. It prioritizes key industries and technologies for accelerated innovation and development and emphasizes environmentally sustainable development. 

While international trade and investment were central to China’s growth the past decades, the focus in the  
FYP now shifts to building domestic markets. Quality is emphasized over quantity. Domestic demand for major chemicals is expected to maintain 3-5% growth over the coming five years. Analysis with thanks to ICTA partner CPFIC.

Central elements of the FYP are:
  • Innovation is central, with a focus on high-end materials in priority sectors including aerospace, electronics, energy, environmental protection, medical and national defense. The goal is to invest 1.5% of revenue in scientific research by 2050. Several national innovation centers and dozens industry innovation centers are to be established. 
  • By 2025, domestic supply sufficiency is expected to be significantly improved with reduced dependence on imported key raw materials and high value-added products representing 40% of exports.
  • Green sustainable development will be accelerated as a cornerstone of the chemical industry’s development. It entails improvement of green standards, promotion of green technology (including CCS) and products to reach the Chinese ambition to peak carbon emissions before 2030 and reach carbon neutrality by 2060. This will be supported by implementation of Responsible Care. By 2025, value-added energy consumption, water consumption and CO2 emissions must be reduced by 10% vs. the 13th FYP.
  • Digitalization is expected to improve production and operational efficiency throughout the chemical industry. A hundred pilot smart factories will be established and at least 30% of provincial and national chemical parks will be ‘smart’.
  • Industry will be upgraded to eliminate over-supply and inefficient production. At the same time production of new chemicals and materials will be promoted, focusing on materials for 3D printing, specialty fibers, functional pigments, UV-cured coatings and other high-value offerings.