Global economic woes have not spared the emerging plastics colossus, according to the report, which states that the Chinese plastics industry is experiencing shrinking demand, declines in plastic prices, and plastic plants closures. The report also indicates that “almost all industry participants have a lower market expectation as pessimism pervades the entire plastics industry.”

The production of Chinese plastic products is estimated to be around 36.9 million tonnes in 2008, falling sharply in the second half of the year after a strong start. Given the environment, Frost & Sullivan’s China consultant for chemicals, materials and food practice, Sammi Sun, believes consolidation is forthcoming. “In China, a great number of small-scale plastic product manufacturers are surviving through selling low-tech products with low profit margins,” Sun states in a release. “A lot of them are likely to be eliminated during the recession period. Large-scale companies are expected to survive through enhancing product quality and winning more market share.”

Sun believes moves by the Chinese government to offset economic hardship, including lowering interest rates, strengthening infrastructure, cutting export taxes, and raising export tax rebate rates, could benefit plastics.—[email protected]