China Plastic Processing Industry Association

The Development of China’s Plastic Processing Industry in 2011

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1. The plastic processing industry in 2011

2. Analysis on the demand conditions of the plastic products market in 2011

3.Situation faced with during “the Twelfth Five-Year-Plan”

4. Prospect of the development of the plastic processing industry in 2012

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Dear honored leaders and guests:

Invited by the meeting and entrusted by the leaders of China Plastic Processing Industry Association, I’m here to report the development plastic processing industry in 2011. First, I’d like to express my sincere gratitude for your listening!

The year 2011 is the first year of “the Twelfth Five-Year-Plan”. As China’s economy kept developing rapidly, the plastic processing industry had not only satisfied the demand of the domestic market, but also achieved an outstanding increase. However, because of the decrease of the export growing rate and the increase of the factor cost, the whole running state of the industry is not so promising.

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According to the National Statistics Bureau, in 2011 the plastic product industry still kept a big increase. From January to December, there were 12966 enterprises above the scale ( scales revenue reaches to RMB 20 million), with an total industrial output value of RMB1607.977 billion, increased by 27.5%. The production value was RMB 1576.484 billion, with a year-on-year growth of 27.5%. The sales-output ratio reached to 98%. And the volume of production was 54,7431 million tons, rising 22.35% compared to the last year.

The plastic processing industry in 2011

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In 2011, enterprises above the scale produced 54.7431 million tons of plastic products, with a year-on-year growth of 22.35%.

The production of plastic film was 8.4363 million tons, increased by 11.17, including 1.4678 tons of agriculture film which was increased by 14.49%.

The production of foamed plastic was 1.4116 million tons, increased by 14.49%.

The production of plastic artificial leather was 2.4026 million tons, increased by 9.57%.

The production of daily plastic was 4.5837 million tons, increased by 5.26%.

The production of others was 37.9088 million tons, increased by 28.59%.

A. The production kept a rapid increase

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Chart1: Production and Growth of Plastic Products in 2011

NameProduction （ million

ton ） Growth （ % ）Plastic products 54.7431 22.35

Plastic filmincluding: agriculture film

8.43641.4678

11.1714.49

Foamed plastic 1.4116 25.38

Plastic artificial leather 2.4026 9.57

Daily plastic 4.5837 5.26

Other 37.9088 28.59

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In 2011, there were 12966 enterprises above the scale in the plastic processing industry, with the total industrial output value of RMB 1607.98 billion, increased by 27.5%. It accounted for 9.75% of the total output value of the light industry, decreasing 0.52% compared to the proportion of last year.

Among those enterprises, there were 1374 plastic film enterprises with an output of 212.97 billion RMB, gaining 28.1% year-on-year growth, 1733 plastic plate, pipe, section bar enterprises with an output of RMB 381.17 billion, increasing 30.1%, 1731 plastic thread, rope and knitting enterprises with an output of RMB 191.17 billion, gaining a year-on-year growth of 36.1%, 1731 daily plastic enterprises with an output of 182.07 billion, increased by 24.1%. From the statistics above, plastic processing industry still achieved a good record in the area of packet, construction and daily use, and expanded its application in basic areas.

B. The total industrial output value hit a historical high

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Chart2: Output and growth of the Plastic Processing Industry in 2011

Number of enterprises

above the scale

Output （ RMB/billion)

Growth （ % ）

Plastic processing industry

12966 1607.98 27.5

Plastic film 1374 212.97 28.1

Plastic plate, pipe and section bar

2323 381.17 30.1

Plastic thread, rope and knitting

1733 191.17 36.1

Daily plastic 1731 182.07 24.1

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Sales revenue of the plastic production was RMB1558.374 billion, reaching to a growth of 27.52%, including plastic film RMB208.241 billion with an increase of 28.73, plastic plate, pipe, section bar RMB367.066 billion with an increase of 29.64%, plastic thread, rope and knitting RMB188.905 billion with an increase of 37.9%, plastic packing box and container RMB135.368 billion with an increase of 28.22%, foamed plastic RMB68.061 billion with an increase of 25.98%, plastic artificial leather RMB176.453 billion with an increase of 29.55%, daily plastic RMB176.453 billion with an increase of 23.95%, plastic parts RMB119.532 billion with an increase of 16.74%, and other plastic products RMB202.212 billion with an increase of 22.99%. The statistics show the good economy performance of the plastic processing industry.

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Chart3: Sales Revenue and Growth in 2011

Name of the productNumber of enterprises

Sales revenue （ RMB/billion ）

Growth （ % ）

Plastic products 12963 1558.374 27.52

Plastic film 1374 208.241 28.73

Plastic plate, pipe and section bar 367.066 29.64

Plastic thread, rope and knitting 188.905 37.90

Plastic packing box and container 135.368 28.22

Foamed plastic 68.061 25.98

Plastic artificial leather 92.535 29.55

Daily plastic 176.45 23.95

Plastic parts 119.532 16.74

Other plastic products 202.212 22.99

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From January to December of 2011, the plastic processing industry had a large margin of increase, realizing total profit from tax 129.295 billion RMB, with a year-on-year growth of 31.6%. The total profit reached to RMB88.229 billion, with a growth rate of 32.5%.

C. Major economic indicator substantially increased

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Chart 3: Profit from Tax, Profit and Growth in 2011

IndustryProfit from tax （ billio

n ）Growth （ % ）

Profit （ billion ）

Growth（ % ）

Plastic products 1292.95 31.60 882.29 32.50

Plastic film 163.72 41.09 117.97 43.61

Plastic plate, pipe and section bar

342.71 36.97 239.47 39.90

Plastic thread, rope and knitting

171.99 39.33 111.78 40.96

Plastic packing box and container

134.08 30.20 92.79 29.98

Foamed plastic 61.43 32.12 40.98 30.29

Plastic artificial leather 69.85 35.02 47.86 36.15

Daily plastic 123.38 25.77 81.12 26.63

Plastic parts 81.50 4.31 52.98 1.39

Other plastic products 144.28 25.07 97.36 23.31

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According to the statistics from the customs, the export volume of plastic products was 13.047 million tons, 10.8% lower than the volume of last year. The export value was $39.309 billion, 9.36% higher than that in the last year, accounting for 8.87% of the total light industry export value. The import volume was 1.848 million tons, and the import value was $18.066 billion. The average unit price of the import product was 3.24 times higher than that of the export product. It shows that China’s export plastic products are mainly daily use products with low additional value.

D. Export volume decreased while export value increased

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Chart 4: Import and Export Volume and Value in 2011

Import volume （ mil

lion tons）

Import value （ $ billion

）

Export volume （ million ton）

Export value （ $ billion

）2011 1.848 18.066 13.047 39.309

2010 1.838 16.20 14.622 35.94

Growth （ %） 0.5 11.5 -10.8 9.36

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According to the National Statistics Bureau and the Customs Information Center, there were 330 plastic processing equipment enterprises above the scale, with an output value of 46.75 billion RMB, rising 16.4% from the last year. The production volume reached to 240 thousand sets, with a year-on-year increase of -4.31%; export volume was 44.1 thousand sets, with an export value of $1.32 billion; import volume was 13.4 thousand sets, with an import value of $ 1.921 billion. The export volume was 3.29 times larger than the import volume, while the average import price was 4.79 times higher than the export price. The plastic processing equipment not only satisfied the demand of domestic market, but gained an increasing export value in the international market. However, the low price of the equipment exported shows the low brand recognition and low technological content of China’s plastic processing equipment.

E. Production volume of processing equipment decreased, while the production value increased

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In 2011 the production of synthetic resin increased 10%. Its self-sufficiency rate reached to 72.5%, which was 3.97 higher than the last year. Its import volume declined 858 thousand tons, 3.6% lower than that in last year. The apparent consumption volume reached to 66.14 million tons, which was 2.49 million tons more than that in the year 2010 with an increase rate of 3.9%. However, the apparent consumption of plastic in 2010 increased 11.9% compared with the statistics in 2009. It shows that the plastic consumption market in 2011still kept increasing, while the growing rate had decreased by 8%.

The consumption of Polythene (PT), polypropylene (PP), PVC still went beyond ten million tons, accounting for 70% of the total synthetic resin consumption. Because of the good price, The PVC gained an increase of 10.2%, higher than the increase of PP (6.9%) and PT (5.0%). The production volume of PP was closed to the production of PT, showing a rapid increase. The production volume of polystyrene (PS) increased 12.4%. ABS increased 14.8%, with a growing self-sufficient rate.

F. The consumption of plastics

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Chart 5: The Production Volume and Consumption of synthetic resin in 2011

Name of products Volume Import

VolumeExport Volume

Apparent consumption

Self-sufficient

rate （ % ）synthetic resin 4798.2 2304.2 488.4 6614.0 72.5

Five general colophony

4087.3 1558.7 135.0 5511.0 74.2

PE 1084.4 744.4 32.2 1796.6 60.4

PP 1074.6 393.6 18.7 1449.5 74.1

PVC 1295.2 131.7 44.2 1382.7 93.7

PS 422.7 103.8 35.6 490.9 86.1

ABS 210.4 185.2 4.3 391.3 53.8

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1.Analysis on the demand conditions of the plastic products market in 2011

A.The large increase after the requirement of measurement changed covered the fact of the actual decline of the growth rate

In 2011, the National Statistics Bureau applied new requirement of measurement, which could only reflect the information of enterprises whose sales revenue reached above 20 million RMB. If the statistics of 2011 can be calculated according to the measurement requirement used in 2010, the situation and growth of the industry can be learned more clearly to help figure out the development and prospect of the industry.

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In 2011, there were in total 12966 enterprises above the scale, and the growth rate of their production volume was 22.35%, total industrial output value 27.5%. From the data above it can be figured out that in 2010 the production volume of plastic products of those enterprises was 44.743 million tons, and the output value was RMB1261.16 billion. The volume production of the enterprises with sales revenue between 5-20 million (7809) were 13.5608 million tons, and the output value was RMB163.09 billion. Considering there was not much change of the two statistics, the production volume in 2011 according to the measurement requirement in 2010 was 68.3039million tons, increasing 17.15%; the output value should be 177.107 million RMB, increased 24.35%. The growth rate had declined 3.99% and 6.73% comparing to that of last year.

From the analysis it can be concluded that the growth rate of production volume and output value in 2011 decreased according to the measurement requirement of 2010, so did the apparent consumption amount of 2011. It is mainly caused by the insufficiency demand of the domestic and oversea markets as well as the not so promising operation state.

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Economic Indicators of 2011 according to the Measurement Requirement of 2010

2010Growth （ %）

2011 Growth （ %）

Growth rate (%)

Production volume（ million tons）

58.3038 21.14 68.3039 17.15 -3.99

Output value （ billion RMB）

14242.5 31.08 17710.7 24.35 -6.73

Profit from tax （ billion RMB）

925.24（ 1-11月）

35.00 1167.27 （ Jan.-Nov.）

26.16 -8.84

Profit（ billion RMB）

620.07（ 1-11月）

42.11 787.46 （ Jan.-Nov.）

27.00 -15.11

Note: the profit and the profit from tax in 2010 were statistics from the National Statistics Bureau from January to November

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Aim of the Plan

During “the Twelfth Five-Year-Plan”, China’s plastic processing industry will focus on the transition and upgrading of the industry, products, enterprises and featured fields, set up completed industrial innovative supplying system, enlarge the application area, and accelerate the proceed of the development from the manufacturing country to the advanced technology country.

----Increase of the economy performance quality: From 2011 to 2015 the production volume of the plastic products produced by enterprises above the scale will increase 12%, and the output value increases 15%; the profit from tax and profit will increase about 18%. The industry will continue optimizing the structure of the export products, increasing the export proportion of proprietary intellectual property brand, keeping 9% yearly growth of the import and export trade.

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In 2011, the apparent consumption statistics showed the plastic consumption increased 3.9%, 8% lower than the number of the last year. The market demand was fatigue and weak.

The consumption of PT increased 5.0%, demonstrating that technological content of the general plastic packets was not high enough, and that the policy of limiting plastic was further enforced. The consumption of PP increased 6.9%, exceeding the consumption of PT, showing that PP products like plastic knitting products, BOPP, PPR tubular products, modified sections, injection moldings had enlarged their application area in the market, and also showing their development potential. PVC gained an 10.2% increase which means PVC tubular products, profiled bar, film markets had stable demand and kept its outstanding cost performance which was generally recognized in the high oil price times. The consumption of Ps increased 7.8%, with the increase rate declining; ABS decreased 0.8%, and the decrease rate was a bit high, which shows that the demand of the automobile, appliance and office supplies industries has declined.

B. The low growth rate of plastic shows the fatigue and weak market demand

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The plastic processing industry is an important industry of the light industry. In 2011, its total output value reached to 1.6 trillion RMB, accounting for 9.75% of the output value of the light industry. It accounted for 3.58% of the GDP, not reaching the standard of 5%, so it can not be seen as a pillar industry of the national economy. While the great demand and development space will make the plastic processing industry keep growing rapidly. As the new material of 21st century, plastics will be more and more widely used with the developing of science technology and the deepening of the industrialization. Making clear the position of the industry, grasping the pulse of the industry development, putting the good chance of the current development, and put the aim, direction and tasks in “Instructions on Plastic Processing Industry development Planning during the “Twelfth Five-Year-Plan” (hereafter Plan) into practice will instruct us analyze the prospect of the industry, put forward working plans, and will help us play an important part in leading the industry developing healthily. The development of the association is based on the healthy development of the industry.

C. Make clear the position have confidence in developing the industry

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It can be concluded from the analysis above that it is difficult to achieve the growth during the “twelfth Five-Year-Plan” as rapid as that during the “eleventh Five-Year-Plan”. It depends on the environment of the economic development both at home and abroad. In China, the standard of average consumption is still low, and has great potential to develop, so there is a promising prospect. From another point, it is also a chance to transit and upgrade the industrial structure. We should change the extensive manage mode with the cost of environment and low efficiency, and explore intensive and efficient developing mode, namely, pay attention to the development of science and technology.

Looking at the trend of last year, we suspect that the development of the first 6 months of this year will be modified. In the next 6 months the operation environment for the enterprises will be better, and the market demand will also respond and adjust. However, obvious increase may not occur.

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The Plan first makes clear the position of the plastic processing industry. Plastic processing industry is an emerging manufacturing industry which focuses on processing plastics and covers raw material, auxiliaries, plastic machinery and mould, scientific research. The industry is a foundational industry which provides products and accessories, special materials for the areas of industry, agriculture, construction, transportation, aviation, and hi-technology. At the same time it is a industry for people’s livelihood supplying safe consumer goods of good quality, which is the necessary means of production and living. It is the new pillar industry of the national economy.

The Plan identifies that the plastic is a kind of ductile material and solidity material using composed or natural polymer compound as raw material, plasticizer, filler, lubricant, colorant as auxiliary element and made under certain temperature and pressure. Defining the material and the product is helpful to distinguish the position between the synthetic resin industry and the petrochemical industry in the domestic economy, in order to encourage the industry to make confidence, attach more importance to the role and development of plastic processing industry, and become a new pillar industry of the national economy.

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The Plan puts forward that in the next 5 years the plastic processing industry should propel the green and low carbon development of the industry by system innovation, technological innovation and quality innovation. The seven tasks are the foundation for strengthening the innovation of the hi-tech products and upgrading the technology. The industry should push forward clean production to improve the energy conservation and emission reduction standard, should foster emerging industry to improve the high-end level of the industry, should optimize the layout of the industry to improve the construction standard of the industrial cluster, should carry out the innovative system construction so that the overall strength of the enterprises will rise, should increase the added value of the export products and optimize the trade structure, and should propel the safety engineering construction of the plastic products.

Plastic is an important area of the future material technological revolution. Therefore, the industry must grasp the opportunity to develop the new technology, new process and new products depending on the progress of science and technology, and focus on researching the key technologies that are important to the whole industry to get a breakthrough.

D. Push forward the progress of science and technology, set up the innovative system to increase the quality of the industry and lay the foundation for the industry restructuring

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The plastic processing industry is responsible for providing means of production of good quality for the domestic economy and safe means of livelihood for people. The safety of the products is concerned with the safety and security of people’s life and property. Therefore the industry must improve the quality of the products with a sense of social responsibility, to make sure the safety and security of the products.

Paying attention to the safety of the products and propelling the safety engineering construction is the cardinal task of the industry. We should push forward the safety engineering construction of the plastic products during the “twelfth Five-Year-Plan”. The whole industry should forbid any conducts that use toxic and harmful substances with a strong sense of social responsibility, honest and self-discipline, strength the standard system construction of packaging material for food to explore long-term mechanism and assessment system of the packaging material supervision, as well as set up the tracing mechanism and method of the packaging materials for food.

E. Propel the safety engineering construction of the plastic products

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With the development of science and technology and the improvement of people’s living standard, the requirement to the safety of the plastic products are more and more strict. Especially the packaging materials for food, drink have become key targets to the food safety supervision. Since December 6th, 2009 when seven ministries including the ministry of health published the Inform of Cleaning Packaging Materials for Food, the industry has made progress in regulating packaging materials and additive, monomer resin coating, and further built and optimized the safety standard system of packaging container and materials for food according to the Inform and the Usage Standard of Packaging Materials and Additives (GB9685-2008) for food.

In view of environmental protection, EU has put forward the routine and time table for totally forbidding the usage of heat stabilizer containing lead salt in PVC. The usage of green and environmental-friendly heat stabilizer and other auxiliaries has been put on the agenda.

what’s more, the safe use of all kinds of products such as plastic doors, toys, Thermal insulation materials, inflaming retarding materials and Freon substitution also should be paid attention to.

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（ 1 ） Developing opportunities A. There is still room for developing in the domestic market

“The Twelfth Five-Year-Plan” considers expanding domestic demand as a basic strategy, which will push the steady and quick growth of the domestic economy, and also ensure the steady and rapid growth of the plastic processing industry, so there is still gig room for developing. Meanwhile, the period during “the Twelfth Five-Year-Plan” is an important period for China’s enterprises to transform and upgrade. Pushing forward the strategic restructuring and upgrading will bring new opportunities for plastic processing industry. With the fast-paced industrialization, the construction of new socialist countryside and the quick development of the heavy industry, new application areas for the plastic processing industry will be enlarged. With the development of transportation, information, new energy and logistics industries, the plastic processing industry which provides them new plastic materials sees new opportunities. As the policies like “Benefaction to People” have been put into practice, people’s living quality has been improved, and their consumption demand for means of daily life will be enlarged. And as the state puts forward strategies like West Development and Prospering Northeast China Industrial Base, and strengthens the water conservancy facilities construction, the midwest and northeast regions’ economy will develop, so as the allied industry serving all aspects of domestic economy, the plastic industry will achieve further development and improvement.

3. Situation faced with during “the Twelfth Five-Year-Plan”

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B. Economic globalization continues providing opportunities

Though the international financial crisis has not ended yet, it does not changed the long-term developing tendency of the world economy order. The comparative advantages of China’s plastic processing industry have been strengthened, and the industry will get historical opportunities in taking part in the international division of labor as well as making use of resource, technologies, talents and management experience of the oversea market. With the adjust of the division of work of the world plastic processing industry, the technology in developed country has further developed, and the invest of the plastic technology R&D center of multinational companies to China will continuously increased. With the reform of petrochemistry technology, new energy technology, information technology, new resource will be provided for the plastic processing technology reform. At the same time, responding to the change of global climate and the technological innovation in the area of energy and environmental protection like energy saving and emission reduction will help the industry take advantage of the plastic materials and enlarge its application areas.

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A. International economic environment becomes more complex, and the trade friction becomes intensified With the spread of the financial crisis, the world economy and international financial market suffers partial turmoil, and there is an obvious lack of drive to push the growing of world economy. Because of it, trade protection resurges, and trade friction become intensified. Developed countries set obstacles to stop China’s plastic products from exporting by technical and standard barriers. And the development of the emerging economic entities also brings great challenges to the export of China’s plastic processing industry.

B. New pressure faced with in production and operationDuring the “twelfth Five-Year-Plan” the plastic processing industry enters into a key step to adjust its structure and steadily develop. The unreasonable products structure, oversupply of some of the products, the increase of the cost and the change of the rates will bring new pressures and challenges to China’s plastic processing industry. Meanwhile, the growing pressure to save energy and reduce emission will bring big challenges to the industry to take responsible for the resource and environment.

（ 2 ） Chanllenges

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A.Stable and loose economy policy will encourage the steady growth of the plastic processing industry

In 2011 China’s economy still kept growing fast, though its growing rate decreased by seasons. Both the main business income and output value of the enterprises above the scale in plastic products industry achieved an increase of 27%, showing the growing state of the emerging industry. In 2012 the government will continue its stable financial policy and appropriately loose currency policy, and combine stimulation with regulation. It is predicted that this year’s GDP will increase about 7.5%. The government’s lowering the goal of growing is helpful to solve the structuring conflicts and make sure the steady fast growing of the economy. Under this background, domestic demand in 2012 will not change. The focus will be on the mode of structure adjustment and quality of economic growth. As the allied products, the plastic products will gain increase with the healthy development of the domestic economy. In the long run, plastic products will continue enlarging their application in many areas.

4. Prospect of the development of the plastic processing industry in 2012

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B. The export of plastic products will keep growing

With the deepening of the euro crisis and the unpredictable international situation, the consumption demand of developed countries will not see a favorable turn in a recent period, so the decelerated growth of the export of plastic products is not unusual. The USA is the biggest market for China’s plastic products export; there are still stable demand from Japan, Europe market; the demand of countries and regions like South America, Africa, Middle East, Russia and India has steadily increased. Most of the export products are daily necessities with low technological content, and are rigidly demanded by the oversea market. Therefore, it will still see certain growth, though the growing rate will depend on the economic rebound of the oversea market. Recently the crude oil price is as high as $110, and the raw material of plastic begins rising, showing that the market start to rebound.

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C. Pay attention to quality and benefit

At present, the low technological content and old product structure restrict the industry from transforming and upgrading. Processing companies suffer the low benefit, lose, and the potential operation risks. The rising of the labor cost, the lack of labor will continue affect the output and benefit of the processing industry. Besides, the lack of working capital of the minor enterprises can still not be solved. The export enterprises face the higher pressure brought by the shrinking international market and changing currency exchange rate. The shrinking export market and the rising cost become the main factors to limit the profit. If the enterprises don’t restructure and upgrade, promoting their brands and technological content to set off the cost, they will hardly survive and develop in the future. The plastic processing industry must pay attention to technological innovation and the quality of the products, and meet the challenge. Fostering the cluster development of the processing industry should be the focus of the association and the government. The industry should strengthen the service of industrial cluster, advocate green and innovative developing mode, in order to develop sustainably and fasten its transformation from the speed growth mode to quality growth mode.

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Let’s work together for the sustainable development of China’s plastic processing industry ！

China Plastic Processing Industry Association (CPPIA)

Address: No.6 East Chang’an Road, BeijingPost code: 100740Tel: 010-65592882Fax: 010-65278590Website: www.cppia.com.cnE-mail: cppia@163.com

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Thanks!