China’s 13^th Five Year Plan & the Wastewater Treatment Industry

Background

The fact that China’s rapid social and economic development is resulting in the degradation of the ecological environment is not news anymore. Water pollution is just one of the environmental challenges facing China’s policy makers. Just how serious is the problem? According to statistics from the National Development and Reform Commission (NDRC), around 32.5% of China’s 7 major river systems and 29.2% of China’s major basins do not meet the prevailing water quality standards (grade III and below) in 2015.

 This has been largely due to the long history of unfettered emission of untreated/under-treated industrial, agriculture as well as domestic wastewater into these water bodies. Not only this, investments in wastewater treatment facilities have been both lacking and lagging behind. In the 12^th Five Year Plan (FYP) period, investments into treating wastewater have decreased, even as investments into cleaning up industrial air emission have increased substantially (see figure 1 below).

This article is based on a GCiS multi-client market research report: China Biodegradable Plastics Market Research Report.

China’s Green Revolution

 According to GCiS China Strategic Research, 135,000 tons of bio-plastics were sold in the China market in 2016. Largely driven by regulatory mandates in environmental protection, the bio-plastics market is expected to continue growing over the next 5 years. Following the State Council’s ‘Order to Limit Plastics’ in 2007, Jilin and Jiangsu have gone further to implement a ‘No Plastics Order’ in 2015 and 2017 respectively. The latter order bans the production and sale of disposable plastic bags or tableware made using non-biodegradable materials. Local Jilin officials are also made accountable as their annual performance review will incorporate performance indicators related to the implementation of the order.

This article is based on a GCiS multi-client market research report: China Blowing Agent Market Research Report.

As part of the Montreal Protocol, China's has already begun in 2013 to phase out its usage and consumption of Hydro-chlorofluorocarbons (HCFCs). Hence, HCFC consumption and production quotas will continue to shrink from now until the complete phase-out timeline in 2030. According to a study by GCiS China Strategic Research, HCFC is still the second largest segment in China's blowing agent market in 2016, with an estimated market value of RMB 1.4 Bn. And, about 91% of China's HCFC blowing agents are sold to its building materials industry. 

According to a China Control Valves Market Research Report, the control valves market in China was estimated at close to RMB 3.5 Bn in 2015. But with slower growth in the economy as a whole, China’s control valve market is expected to shrink over the next five years. In the past 2-3 years, downstream industry players in traditional heavy industries chemical and metallurgy have either reduced their capital investment or have become more conservative in making new ones. Demand from these 2 industries is expected to shrink, leading to smaller market shares by 2020 (as shown in figure 1 below).