Platform Pattern Makes Better Polymer Industry


 It is well known that we have come to an era of rapid science development and information mutual communication.People’s life is changing,consumption and industries are upgrading followed with fast development in the new material industry.During the 12th Five-Year Plan session,the state council promulgated on “speeding up the cultivating and developing strategic emerging industry "decision which explicitly defines new material industry as the basic and leading industry of national economy and promotes the industry development to support  energy saving products,high-end medical instruments,upscale equipments ,new energy automobiles and other strategic newly emerging industry development.

According to the China Plastics Processing Industry Association statistics about polymer material downstream industry,polymer material(modified material) doubled its domestic  demand in 2015 compared with 2010 and it only occupied 10% of the total polymer material consumption while in developed countries the percentage was around 20%.It shows great potential in the industry.Besides,polymer material demand and output value has been at over 10% in domestic market over the past years.Automobile and household appliance,two major industries in the downstream,are showing positive growth trend.The former has maintained over 10% growth over the years.Polymer material is applied largely in household appliances with 29.5% average growth rate in recent years and will account for more in the future.  

 In the meanwhile,there are many shortcomings in the industry:dispersed and small companies with low concentration,minor brands,high mobility and poor technology accumulation.All of these have led to high operation costs,bad brand premium, low-level development,difficult enterprise financing and lack of attention from capital market.It is time for the industry to make its reform and upgrading,activate social resources,integrate industries,accumulate core competitiveness to achieve leapfrog development.However,in the two most common development patterns,lots of drawbacks remained to be changed:


The First pattern--park-district economy

As everyone knows,developing park-district economyand forging industrial cluster

is the propeller to the development of a regional economy which has been proved efficient.  MIIT survey shows there are more than 6000 industrial parksdistribute in our country and parks above province level are over 1500. To accelerate progress in the new material industry, by 2014,National Development and Reform Commission,  Ministry of Industry and Information Technology of thePeople's Republic of Chinaand Ministry of Science and Technology have licensed establishment of 7 high-tech zones,32 new industrialization demonstration base and 90 high-tech industrialization bases in the 31 provinces, cities and autonomous regions.Through decades of development,some trouble has appeared:

1.     High dependence on foreign-funded enterprise, difficult to implement technology spillover effects

 By introducing foreign-funded enterprise to implement technology spillover effects and strengthen production technology level is the theory starting point of  Chinese policy on foreign capital.Yet in most parks,foreign companies impose restrictions ontechnology importand diffusion and lack of innovation while there are still quite great difference on technology and human resources between local enterprises and foreign firms.Local companies are not able to take in the technology spillover.

2.    High dependence on large company, industrial agglomeration effectis not significant

Most park industrial clustershave high dependence on large companies and there is much differences between core companies and middle and small-sized enterprises. Local governments generally give certain inclination in policy and resources to park core companies which increases the difficulty of small-sized enterprisesdevelopment.


 3.   Improper park policies implementation causes resources waste and migrant enterprise phenomenon

Since 1990s,parks have developed rapidly and local governments have been planning new parks.To attract more investment,many places have offered favorable investment conditions,for example,repeatedly lowered land transfer revenue, utilitiesand other taxt standard which led to inefficient land production and huge waste of natural resources.In addition,some enterprises migrated among adjoining areasfor best policy condition.Once the preferential policy period expired,they would migrate very quickly.It directly caused plenty of problems and went against the industry and regional economy development.

4. Unclear leading industry  orientation and uncertain prospects

 Except Beijing,Shanghai and some parks in developed areaplace service industry as their prior development direction,other parks especially midwestern parks generally take equipment manufacturing and high-tech industry as major development area.However from economic base  and R&D environment point of views,expect for some parks with advantages to develop high-tech industry, most parks come up with the industrial development planningnot quite match with their actual conditions.


The second pattern—make space

In recent years,make space pattern has sprung up in many areas.It has followed the developing trend of times actively. As things stand,there are four common types:activity gather, counseling and training,  investment and landed property thoughts.This pattern is still taking exploratory steps and it also has some drawbacks:

1.   Insufficient supply resources

A lot of people act as the landlord and provides place only which has made access to technology,information,finance and other recourses difficult.  

2.  Poor service

Supporting serviceis not professional and lack of industry chain support,make space has become a bar outline.

3.  Low  requirements for market access

There is no access control for entrepreneurs so that so  all levels are tossed together which turns to low success probability.

4.  Unitary profit model

With immature mode,imperfect system and unprofessional service,it basically makes profits on rent and is hard to be sustainably profitable.Therefore,Jinyoung has seized the opportunities and launched the polymer material business founding platform to promote the industry development.


New platform and new pattern is coming in the 2016 Chinaplas,we will see.