China's Petochemical Industry In Post-WTO Era

In recent years, China's sustained, steady and fast economic growth has become a "bright scene" in the world economy. People's living standard has been improved greatly. All these have paved the way for the rapid development of China's petrochemical industry.Petroleum, described as "black blood", plays an indispensable role in industrial economy. China's petrochemical industry acts as not only the "pillar industry" to the national economy, also the important source of national income. In China, the general rule is that petrochemical growth is faster than GDP. In other words, the development of domestic petrochemical industry contributes to the boom of the economy.Having a bearing on the national economic security, petrochemical industry has been safely guarded by monopoly. The strict protections, such as high tariff, low quotas, indeed generated huge profits, but they also contributed to weakness particular to the monophonic trades - high production cost, limited product mix, slow technological innovation, etc.Affected by the Asian financial crisis, the world oil market has been in low spirits. All multinational corporations have begun to adjust their development strategies and product mix, strengthen the superior industries and improve their competitiveness through capital trade, leading to a flourish tide of industrial restructuring throughout the world.After the entry to WTO, with the further opening of domestic market, China'spetrochemical industry will face a new environment for development and a more complicated market situation for competition. In line with the WTO commitments, the cancellation of non-tariff barriers, tariff concession and granting of trade right and distribution right to foreign companies are supposed to be done within five-year transitional period. All this will directly result in the influx of large amount of oil imports, price drops and huge losses of the domestic industry. It will bring sustained and far-reaching adverse impacts on China's petrochemical industry under the current system and structure.This paper gives the general account about the present production and market situations of China's petrochemical industry, and analyzes the main problems rooted the industry, and the impacts of WTO commitments. It also puts forward suggestions aiming as improving the competitiveness of the industry...