BEIJING, May 17 (Xinhua) -- China is expected to overtake the United States as the world's largest chemical market by the end of 2011, Tim Hanley, Global Chemical Sector Leader of Deloitte, said here Tuesday.
Hanley, who is on a short visit to China, said in an interview with Xinhua that the key growth driver for the Chinese chemical industry is the rapid growth of the Chinese economy and high demand for chemical materials from the automotive, construction, textile, packaging, agriculture and other end-user industries in the country.
Hanley and his team are working on a Deloitte report on the outlook and trends of the global chemical industry. He said the global chemical industry is on solid ground with stronger revenue performances during the first half of 2011, especially in China.
As the the world's second largest chemical producer after the United States, China's chemical output exceeded 900 billion U.S. dollars in 2010, accounting for approximately 15 percent of global demand.
Hanley sees China as a very active chemical trader, with a 70 percent increase of its exports of chemical products since 2000, and a rise of 50 percent of imports during the past decade.
"More and more western chemical companies are interested to invest in China for its vibrant local markets, growing affluence, and the consolidation of a fragmented local industry to build scale," Hanley said.
But Hanley also noted that China's chemical industry still has major challenges, such as low levels of industry concentration, limited capacity for innovation and energy inefficiency.
According to Hanley, apart from the leading chemical players like Sinopec, Sinochem, there are more than 28,000 small chemical enterprises in China, most with very limited, undifferentiated products, leading to over-supply in many low-value-added products.
In addition, the energy consumption per unit for Chinese chemical output is now 4.1 times that of the U.S. and six times that of Japan, prompting Chinese chemical companies to invest more in energy-saving technologies and use of low-emission producing equipment, he said.
Hanley said Chinese chemical companies should speed up industry restructuring and technical innovation to produce more advanced and high-value-added products.
The Chinese government should also encourage much faster industry consolidation, he added.