The traditional image of China has been that this was a country where rules were lax and those rules were not adhered to anyway, certainly in relation to the environment. It is true that the Chinese chemical industry used to have free reign to pollute, however this situation has undergone dramatic changes during the past decade and especially since Xi Jinping took over as President of China in 2013.
It is really during the past couple of years that we have witnessed an increased pressure on the Chinese chemical industry or perhaps more correctly, the local provincial and county/city Government’s running of China’s numerous chemical parks. I am thinking, in particular, of the major tragic accident which occurred at the Chenjiagang Chemical Industry Park in March this year where up to 1000 people were either killed or injured when a massive explosion wiped out a big industrial area.
The reaction from the Chinese Authorities was swift and resulted in the immediate closure of not only the Chenjiagang Chemical Industrial Park, but also large industrial areas across the Jiangsu Province. The much more environmentally conscious policies of China have had and will have an increased impact on not only the Chinese chemical industry, but the global chemical industry as we have all become used to sourcing the majority of our chemical substances from China during the past two decades. So what will the effect be of China’s environmental clamp down?
First of all, it will mean the closure of thousands of chemical plants as China’s authorities will demand closure of any company which cannot or will not adhere to the regulatory demands.
Secondly, prices of all Chinese chemical products will increase and is something which we have already witnessed during the past couple of years. We simply have to get used to paying normal prices again after having lived in a rather unrealistic world for more than a decade with cheap raw materials and finished products coming out of China, mainly for the benefit of the Western consumer.
Thirdly this will mean a more level playing field for the global chemical industry and it will be more viable for European and American companies to invest in production in their own markets which again will fuel economies and create jobs.
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