An overview of Chinese pesticide industry transfer to northwest China: Inner Mongolia and Ningxia attracted most capacity

There were 676 petrochemical-dominant industrial parks in China as of 2018, according to statistics released by the Chemical Industrial Park Working Committee of China Petroleum and Chemical Industry Federation. 

Of these, 57 were national-level chemical industrial parks (inclusive of economic development zones and high-tech development zones), 351 were provincial-level chemical industrial parks and 268 municipal-level chemical industrial parks. There are 14 super-large parks with the petrochemical production value of more than Yuan100 billion, 33 large parks valued at Yuan50-100 billion; 224 parks worth Yuan10-50 billion; and 405 parks valued below Yuan10 billion. 

Over the last 10 years, the Chinese Ministry of Industry and Information Technology, together with the provinces of Jiangsu, Shandong, Hubei, Henan and Liaoning, have been constantly calling for an improvement in the operations of chemical enterprises and chemical industrial parks. Jiangsu has made the utmost effort to streamline the chemical industry operations within the province, having begun corrective action processes from 2007. 

In 2020, Jiangsu issued a Catalogue of Chemical Productions to be Restricted, Eliminated and Prohibited in Jiangsu Province (under government document ref 2020-32). The catalogue prohibits setting up of new chemical parks, and new production units outside chemical parks, as well as prohibiting the incorporation of new pesticide technical manufacturers (chemical synthesis). 

The continuous implementation of environmental regulations in Jiangsu, Shandong and Zhejiang has led to the transfer of the pesticide industry to regions with resource and environment backup. Among the transfers, Zhejiang and Hebei have shown significant progress. 

The transfer of pesticides and intermediates are mainly concentrated in China’s northwest and central regions, with priority being given to Inner Mongolia Autonomous Region and Ningxia Hui Autonomous Region, followed by Gansu Province, Shaanxi Province and Hubei Province. 

Table 1 and Table 2 show the new increases of production capacity of technicals and intermediates in each province and autonomous region in the last two to three years, where Inner Mongolia and Ningxia have accommodated the largest new capacity of technicals and intermediates. Inner Mongolia has taken in roughly 93,880 tons of pesticide technical and 361,600 tons of special intermediates; Ningxia has carried new capacity of 132,000 tons of pesticide technical and 100,200 tons of special intermediates; Hubei has set up new capacity of 27,400 tons of pesticide technical and 141,530 tons of special intermediates.

Table 1   Increased Pesticide and Intermediate Capacity in Northwest China

Table 2   Increased Pesticide and Intermediate Capacity in Central China

The transfer of the Chinese pesticide industry can be divided into three stages - a hurried relocation from 2018 to 2019; completion of a new facility after hurried relocation from 2020 to 2022 when the problems involving the operations of a new facility are gradually emerging, and finally, in the third stage from 2023 to 2025, the Chinese pesticide industry is expected to normalise gradually. Eastern provinces with fragile ecological conditions may be busy in rectifying the production capacity while eastern, central and southern provinces will gradually relax regulations. Of course, the environmental requirement is going to be certainly more stringent.