Policy support drives innovative development of Chinese fine chemical industry

Recently, the nine national agencies, including the Chinese Ministry of Industry and Information Technology, the National Development and Reform Commission, jointly issued the Implementation Plan for Innovative Development of Fine Chemical Industry (2024-2027), which serves as a guide to the high-end, green and intelligent development of the fine chemical industry, providing a solid foundation for promoting new industrialization and shaping a manufacturing country.

The Implementation Plan proposes that by 2027, China will foster 5-plus world-class leading innovation enterprises with solid collaboration capabilities; cultivate 500-plus ″specialist and novel little giant″ enterprises; and create 20-plus chemical parks dominated by fine chemicals with strong competitive advantages, whilst local governments are guided to lay stress on extension, supplementation and enhancement of the existing industry chain to establish characteristic industrial clusters and build an industrial pattern with complementary advantages.

The Chinese fine chemical industry has considerable advantages. In terms of industry volume, the business revenue of the Chinese fine chemical industry (excluding medicine) accounts for nearly 50% of the world’s total revenue, ranking first place for many years. The Chinese fine chemical industry generates more than 30,000 kinds of fine chemicals, and the output of pesticides, dyes, coatings, pigments, and food and feed additives ranks first globally. From the industry chain perspective, the leading enterprises have been very competitive in the fields of polyurethane and fluorine chemicals; more than 1,000 ″specialist and novel little giant″ enterprises have been active in segmented industry sectors; more than 400 chemical parks have prioritized the development of fine chemicals, forming a large number of delicate chemical-featured industrial clusters.

The Chinese fine chemical industry faces problems such as low R&D spending, weak technical equipment, inadequacy of supply of high-end products, safety and environmental pressure, and insufficient upstream and downstream collaboration, which restrain the high-quality development of the fine chemical industry. Currently, the Chinese fine chemical products are mostly low-end products, being primarily raw materials and general-purpose products. In contrast, the supply of high-end products, such as high-end scientific research-oriented reagents, high-performance catalysts, special surfactants and high-performance resin, is insufficient. The fine chemical industry is urgently required to focus on the needs of critical industrial chains and supply chains to increase technical research efforts in the direction of extending and enhancing the industrial chain, making up for the weakness of the industrial chain and improving the competitiveness of advantageous products.

In response to the above issues, the Implementation Plan proposes three measures: The first will be to promote the extension of the chain of conventional industries; the second will be to speed up the research and development of critical products; the third will be to upgrade the quality of superior products, where the ″variety, quality and brand″ action shall be taken in the industries with comparative advantages such as coatings, dyes and fluorosilicone organic material industries while service-oriented manufacturing be developed to provide customized, functionalized, specialized and serialized product and service.

The data show that currently, the presence of chemical enterprises in China’s fine chemical parks is less than 50%; the leading industries in some chemical parks are not clearly defined; the industrial chain and supply chain between enterprises in the park are not very relevant leading to serious homogeneous competition, which fails to give a play of the collaboration, industrial linkage, cost reduction and efficiency increase which are envisaged for chemical parks. On the other side, the industry distribution is concentrated on East China while neglecting the importance of West China, where East China takes a dominant position. In contrast, Central/West China is in a weak position, resulting in an imbalanced development between regions. 

To improve the development quality of chemical parks, efforts shall be made to guide industrial transfer in an orderly manner, and promote a rational regional division and cooperation. . The Implementation Plan makes clear that it is necessary to organize and carry out activities, such as the industry transfer and collaboration within the chemical industry, as well as to guide the local governments to scientifically plan and extend the fine chemical industry chain, promote the creation of segmented fine chemical industry clusters, thus forming an industrial pattern with respective characteristics and complementary advantages of the east, central and west China.

To focus on key points and promote the industrial chain's extension, supplementation and enhancement. The Implementation Plan proposes to develop several high-end products and break through many vital technologies to enhance the competitiveness of superior products; promote several green, safe, intelligent and advanced technologies; build various industrial parks with distinctive characteristics and business outcomes of leading industries; strengthen coordination and optimize the innovation system and industrial layout; lay out fine chemical innovation platforms and improve the innovation system; grow stronger the leading enterprises, cultivate small and medium-sized enterprises and stimulate the vitality of collaborative innovation; guide local governments to stress on leading industries, extend, supplement and enhance the industry chain to create characteristic industrial clusters and build an industrial pattern with complementary advantages.