Since the beginning of last year, the state has been clamouring for a "sweeping spell" on the export of plastic products. From September 15, 2006, the state reduced the export tax rebate rate for plastic products from 13% to 11%, and on July 1 this year, lowered the export tax rebate rate to 5%, and then to July 23 the Ministry of Commerce and the General Administration of Customs. It is easy to see that the intention of the national policy regulation is clear: to limit the export of plastic products in large quantities.
Objectively speaking, a large number of plastic products exported, not only for the country in exchange for a large amount of foreign exchange, but also solved the employment problem of millions of people, contributed to promoting the economic development of the Pearl River Delta, the Yangtze River Delta. So why does the state have to export red plastic products frequently?
The first is to ease the contradiction between the supply and demand of plastic materials. China's plastic raw materials have always produced less than necessary, and foreign dependence is generally higher. In recent years, with several ethylene projects completed and put into production, coupled with the rapid growth of PVC production capacity of calcium carbide process, the self-sufficiency rate of plastic raw materials has increased, but the current dependence on foreign materials still exceeds 43%. At the same time as a large number of plastic raw materials are imported, a large number of plastic products are exported every year, and the main exports are low-value-added, low-tech products. In 2006, China’s total imports of five major synthetic resins reached 13.387 million tons, and exports of plastic products reached 13.5302 million tons that year. The large export of plastic products has aggravated the contradiction between the supply and demand of domestic plastic raw materials. With the high external dependency ratio, it is very easy to trigger market fluctuations. Statistics show that since 2002, the price fluctuation of international plastic raw materials has been about 80%, and the price fluctuation of domestic plastic raw materials has exceeded 120%. The price of plastic raw materials fluctuates sharply and rises. As a result, the cost of plastics processing companies rises, profits decline, and business risks increase. This is very detrimental to the healthy development of the entire industry.
The second is to optimize the structure of export products and reduce trade friction. From 2001 to the present, the average annual increase in the export of plastic products in China exceeded 13%, and the average annual increase in exports exceeded 25%, and the trade surplus continued to expand. However, the huge amount of exports and trade surpluses cannot conceal the fact that they are winning by quantity and relying mainly on exports of low-end, low-tech, and low-value-added products. Taking the export of plastic products from Guangdong Province in 2006 as an example, the average price of exported plastic products in the province was US$1,546/ton, up 14.5% year-on-year, while the price of plastic raw materials rose by more than 30% year-on-year. The direct consequence of winning by volume and exporting low-value-added products is that while we provide inexpensive plastic products for the international market, we are frequently subjected to anti-dumping measures by others. On April 8, 2005, the South African International Trade Commission conducted an anti-dumping investigation against PS and parts of products originating in China, India, and other countries. From August 30, 2006, the European Commission was originally established in China and Thailand. The plastic bag implements a five-year anti-dumping measure; on July 19, 2007, the U.S. Department of Commerce issued a notice deciding to impose anti-dumping investigations and anti-subsidy investigations on composite woven bags originating in China... if we do not change the mode of foreign trade growth. Without further optimising the structure of export products, trade frictions encountered may become more and more serious. The profits of the vast majority of exporting enterprises will become less and less, and the development space will become smaller and smaller.
The third is to narrow the gap between the eastern and western regions. Compared with general trade, processing trade enjoys certain tax benefits. Due to its unique geographical advantages, the eastern region has experienced an exceptionally rapid development of processing trade in recent years, which has led to the rapid development of the local economy. However, the capacity of the environment and resources in the eastern region is nearly saturated, and the competition among enterprises is very fierce. The processing trade in the central and western regions is lagging behind. With large capacity for environmental resources and large market demand, there is great room for development. Through policies to guide the transfer of eastern enterprises to the central and western regions, it will not only ease the pressure on the environment and resources in the eastern region, but also promote the development of the central and western regions, narrowing the gap between the eastern and western regions.
The fourth is to rationally allocate and use resources effectively. In addition to raw materials, the largest energy consumption in the plastics processing industry is electricity. China's power supply is characterized by “the West is rich in the East†and adopts a series of measures to restrict exports, while adopting different policies at the same time. Whether it is to eliminate a part of backward production capacity or to guide the eastward migration of eastern enterprises, the power supply in the eastern region will be reduced. Pressure, at the same time, transform the advantages of resources in the west into economic advantages and promote the common development of the eastern and western regions.
Therefore, the country's macro-control is reasonable, and the majority of plastics processing companies should change their ideas as soon as possible, through technological investment, scientific and technological research, product upgrading and structural adjustment, and strive for better and faster development after a short period of “labor painâ€.
Objectively speaking, a large number of plastic products exported, not only for the country in exchange for a large amount of foreign exchange, but also solved the employment problem of millions of people, contributed to promoting the economic development of the Pearl River Delta, the Yangtze River Delta. So why does the state have to export red plastic products frequently?
The first is to ease the contradiction between the supply and demand of plastic materials. China's plastic raw materials have always produced less than necessary, and foreign dependence is generally higher. In recent years, with several ethylene projects completed and put into production, coupled with the rapid growth of PVC production capacity of calcium carbide process, the self-sufficiency rate of plastic raw materials has increased, but the current dependence on foreign materials still exceeds 43%. At the same time as a large number of plastic raw materials are imported, a large number of plastic products are exported every year, and the main exports are low-value-added, low-tech products. In 2006, China’s total imports of five major synthetic resins reached 13.387 million tons, and exports of plastic products reached 13.5302 million tons that year. The large export of plastic products has aggravated the contradiction between the supply and demand of domestic plastic raw materials. With the high external dependency ratio, it is very easy to trigger market fluctuations. Statistics show that since 2002, the price fluctuation of international plastic raw materials has been about 80%, and the price fluctuation of domestic plastic raw materials has exceeded 120%. The price of plastic raw materials fluctuates sharply and rises. As a result, the cost of plastics processing companies rises, profits decline, and business risks increase. This is very detrimental to the healthy development of the entire industry.
The second is to optimize the structure of export products and reduce trade friction. From 2001 to the present, the average annual increase in the export of plastic products in China exceeded 13%, and the average annual increase in exports exceeded 25%, and the trade surplus continued to expand. However, the huge amount of exports and trade surpluses cannot conceal the fact that they are winning by quantity and relying mainly on exports of low-end, low-tech, and low-value-added products. Taking the export of plastic products from Guangdong Province in 2006 as an example, the average price of exported plastic products in the province was US$1,546/ton, up 14.5% year-on-year, while the price of plastic raw materials rose by more than 30% year-on-year. The direct consequence of winning by volume and exporting low-value-added products is that while we provide inexpensive plastic products for the international market, we are frequently subjected to anti-dumping measures by others. On April 8, 2005, the South African International Trade Commission conducted an anti-dumping investigation against PS and parts of products originating in China, India, and other countries. From August 30, 2006, the European Commission was originally established in China and Thailand. The plastic bag implements a five-year anti-dumping measure; on July 19, 2007, the U.S. Department of Commerce issued a notice deciding to impose anti-dumping investigations and anti-subsidy investigations on composite woven bags originating in China... if we do not change the mode of foreign trade growth. Without further optimising the structure of export products, trade frictions encountered may become more and more serious. The profits of the vast majority of exporting enterprises will become less and less, and the development space will become smaller and smaller.
The third is to narrow the gap between the eastern and western regions. Compared with general trade, processing trade enjoys certain tax benefits. Due to its unique geographical advantages, the eastern region has experienced an exceptionally rapid development of processing trade in recent years, which has led to the rapid development of the local economy. However, the capacity of the environment and resources in the eastern region is nearly saturated, and the competition among enterprises is very fierce. The processing trade in the central and western regions is lagging behind. With large capacity for environmental resources and large market demand, there is great room for development. Through policies to guide the transfer of eastern enterprises to the central and western regions, it will not only ease the pressure on the environment and resources in the eastern region, but also promote the development of the central and western regions, narrowing the gap between the eastern and western regions.
The fourth is to rationally allocate and use resources effectively. In addition to raw materials, the largest energy consumption in the plastics processing industry is electricity. China's power supply is characterized by “the West is rich in the East†and adopts a series of measures to restrict exports, while adopting different policies at the same time. Whether it is to eliminate a part of backward production capacity or to guide the eastward migration of eastern enterprises, the power supply in the eastern region will be reduced. Pressure, at the same time, transform the advantages of resources in the west into economic advantages and promote the common development of the eastern and western regions.
Therefore, the country's macro-control is reasonable, and the majority of plastics processing companies should change their ideas as soon as possible, through technological investment, scientific and technological research, product upgrading and structural adjustment, and strive for better and faster development after a short period of “labor painâ€.