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Market forces should be allowed to stop China’s chemicals over production. The warning is in a report issued by the European Union Chamber of Commerce in China.
One of the most rapidly developing industries in the country, the chemicals production is also one of the many sectors where China is experiencing excessive production, pushed by the possibility of quick profits. This is causing quite a whole lot of environmental problems, with PVC, ethylene derivates, polyester and other substances coming out at an increasingly higher pace. This is of course a result of the country’s quest for self-sufficiency in the production of chemical substances.
A new EU Chamber of commerce report calls this market protection and claims this might strain China’s commercial relations with other countries, hinder the domestic manufacturing industries’ potential for development and lead to an increase in environmental pollution.
The overcapacity should be curbed by stimulating domestic consumption, encouraging competition and market-driven consolidation. But also by strengthening the independence and powers of Chinese central government agencies so that it could enforce its environmental laws stricter.