On November 23, Li Guojun, vice president of the China Plastics Processing Industry Association, told reporters that for the first time since July, China's plastic product exports have seen a sharp decline, driven by adjustments in domestic processing trade policies and rising international trade barriers. Meanwhile, import volumes have increased, signaling a shift in the industry’s foreign trade dynamics. Li believes this transformation could help reshape the industry structure, ease trade tensions, and move away from the current situation where many domestic companies compete with each other rather than focusing on innovation and value creation.
Recent customs data supports Li’s assessment. From January to October this year, China’s primary plastics imports rose by 6.1%, while the growth rate of plastic product exports fell from 8.9% in the same period last year to 5.2%. This 3.7 percentage point drop highlights a significant slowdown in export expansion.
Li explained that for years, processing trade has played a major role in China’s foreign trade, often acting as a "tailor for others"—a system that made Chinese products vulnerable to anti-dumping investigations. Plastic products were no exception. In recent years, the government has shifted its policy from encouraging exports to restricting them. Starting September 15, 2006, the export tax rebate for plastic products was reduced from 13% to 11%, and then further cut to 5% on July 1 this year. On July 23, the Ministry of Commerce and General Administration of Customs added plastic products to the list of restricted items under processing trade, including 1,853 new 10-digit commodity codes. This change has led many plastic manufacturers to cut back on exports due to the lower tax rebates, resulting in a sudden drop in export volumes and a corresponding rise in imports.
Experts note that plastic products have long been a key export item for China. Since 2001, annual exports have grown by over 13%, with an average increase of more than 25% per year. However, this growth was largely based on low-value, labor-intensive processing, relying on resources and cheap labor to earn minimal profits. This model does little to support long-term industry restructuring. The large export volume and trade surplus mask a reality: China is exporting low-end, low-tech, and low-value products. Currently, there are about 90,000 plastic processing companies in China, but only around 9,000 are classified as large-scale enterprises.
Li Guojun said that with the ongoing changes in national trade policies, domestic plastic companies are now being pushed to upgrade their products and restructure their operations. This shift, though challenging, may ultimately lead to a more sustainable and competitive industry.
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