China Market Insider New Five-Year Plan: How is China's Chemical Industry Arming the South?

Author / Editor: Henrik Bork* / Ahlam Rais

With an action plan to promote ‘green petrochemical clusters’, the Chinese southern province of Guangdong wants to encourage further growth in the industry. The ambitious plans are valid up to 2025, i.e. parallel to the People's Republic's new five-year plan, which is currently being tied up in the corridors of power in Beijing. What is the industry’s future in the region?

Related Vendors

With the ‘China Market Insider’ format, PROCESS reports regularly on the Chinese chemical and pharmaceutical market.
With the ‘China Market Insider’ format, PROCESS reports regularly on the Chinese chemical and pharmaceutical market.
(Source: © sezerozger -

Beijing/China – Due to its coastal location on the South China Sea and the simultaneous proximity to the rapidly growing markets in South China and Southeast Asia, the province's expansion plans are gigantic, mentions PROCESS (China) as it has just documented an overview of the most important petrochemical projects already under construction or decided upon.

For example, the province's refinery capacities for crude oil are to be expanded from the current 70 to 90 million tonnes per year, for ethylene from 4.3 to 9 million, and for aromatics from the current 850,000 to 5 million tonnes per year. In the next five years, the policy of concentrating the industry in a few locations will continue. "The five major refinery Verbund sites and chemical parks will reach an even larger scale and enjoy even clearer advantages," writes PROCESS in Beijing.

The five most important locations are Guangzhou, Huizhou Daya Bay, Zhanjiang Donghai Island, Maoming and Jieyang Dananhai. The action plan also mentions the "fine chemicals base at the port of Zhuhai-Gaolan and several large chemical parks.”

For the Guangzhou petrochemical site, the plan promotes, among other things, the development of high-quality green chemical products, such as the processing of synthetic resins, engineering plastics, new chemical materials and daily chemical products. Sinopec's Guangzhou branch is considered to play a central role in the development of an "environment friendly, safe and efficient" site.

PROCESS Insights 2020-06
Economic Evaluation of Petrochemical Projects after Corona

In the post Corona time and due to the oil price crash, the economics of large petrochemical projects has changed significantly, which made it necessary to reevaluate the planned projects. When evaluating the economics of a large project such as a cracker-based polymer complex, many factors have to be considered and have to be tested in different scenarios.

In this paper, our expert will provide you with a simple model and method for the economics evaluation of petrochemical projects and will explain possible scenarios.

Buy now!

For the Huizhou Daya Bay site, an explicit mention of the Daya Bay Petrochemical Park, the CNOOC Huizhou petrochemical refinery, and the ethylene projects of CNOOC Shell and Exxon-Mobile in Huizhou is made. The development of fine chemicals at this site will be the focus of attention over the next five years. In the past 20 years, several dozen Fortune 500 companies have already settled there, not only Exxon Mobile and Shell.

On Zhanjiang-Donghai Island, Zhongke Guangdong's refinery and chemical integration project will receive special support. BASF's new joint project is also receiving special attention from the planners. Overall, the central planners want to build a "relatively complete petrochemical value-added chain" at the site within the next five years.

At the Maoming petrochemical site, Sinopec's ethylene plant, the Maoming high-tech development zone and the Maonan petrochemical zone are at the top of the development plan. Production of refined oil, lubricants, solvent oils, organic raw materials, synthetic resins, synthetic rubber and liquid wax is to be increased.

At the Jieyang-Dananhai site, the construction of new facilities of Petrochina's local subsidiary in Guangdong is to be accelerated. Cooperation between the site and the one in the Bay of Daya is also to be improved. Here, too, the list of specifically mentioned products that are particularly worthy of promotion shows the government's desire to gradually upgrade the chemical industry in southern China, for example by referring to clean oil, fine chemicals and high-performance polymers.

* Henrik Bork, long-standing China correspondent of the German newspapers 'Süddeutsche Zeitung' and 'Frankfurter Rundschau', is Managing Director at Asia Waypoint, a consulting agency specialising in China and based in Beijing. "China Market Insider" is a joint project of Vogel Communications Group, Würzburg/Germany, and Jigong Vogel Media Advertising in Beijing/China.