Modern Plastics Worldwide - July/August 2009 - dae uptlax

WORLD TOUR
ASIA-PACIFIC
Business, Strategies & Markets
Blue skies prevail in China; are
stormy skies ahead?
By Stephen Moore
They say you can gauge the health of
China’s export-driven economy by the
level of atmospheric pollution in Southern
China. Assuming that is true, then a recent
low smog-level drive through the industrial
city of Dongguan clearly indicated
that China’s export machine is suffering
as the global economy flounders. Indeed,
June’s exports from the country dropped
year-over-year by 21.4%, the eight straight
monthly decline, though the pace of decline
is slowing. The big question is whether
the domestic stimulus-driven recovery in
China is sustainable or not. Some opine
that the government succeeded in kickstarting
the domestic economy through
its stimulus efforts, but once the effects
of these have flooded through the system,
a repeat package of similar proportions
would be difficult, and China would thus
then depend on a global recovery to bolster
its export-led economy. Clariant’s Juer-
Most of the world may be mired in recession but China is exhibiting
resilience, according to industry insiders who spoke with us in late May at
the Chinaplas tradeshow in Guangzhou. The next months will tell if the
relatively good times can hold.
gen Heise, head of
Greater China in
Guangzhou, China
for the additives
and colorants supplier,
is one forecasting
such a twopronged
recovery,
saying, “We expect
the current run-up
to come to a halt
in a few months,
before a real recovery
around May
2010.”
However, Engel
Machinery Asia (Pyeongtaek, South Korea)
President Robert Bodingbauer expects the
current global crisis to boost China’s longterm
prospects. “Once the world recovers,
I think the majority of companies will
look at investing in production facilities in
Chinaplas 2009 attracted 69,298 visitors, including 11,340 from overseas.
Arburg’s Man: The strong get stronger.
Asia rather than
Europe and other
developed economies.
The main
beneficiary will
be China,” stated
Bodingbauer.
Southern China
export strife
The plastics processing
sector in
Southern China
presently is characterized
by two
extremes, according
to Max K.W. Man, general manager at
injection molding machine manufacturer
Arburg’s Shenzhen operation. “They either
have no work whatsoever or they are busy.
Customers are looking for the strongest
companies when they place their orders,”
he said. The rest of the year will likely be
critical to the survival of many, he predicted.
“Processors reliant on export orders
have to prove to the banks that they have
orders in order to get financing,” said Man,
who added that while Arburg has suffered
from the downturn, it has not been hit to
the same extent as machine suppliers serving
the low-end market. “We have already
seen some confidence restored in the second
quarter, although machine buyers are
taking longer to sign,” he said.
Healthy homeland
Domestically the picture remains relatively
bright. Since March, various
government stimuli and initiatives have
kicked in, and the local economy has
begun to tick again. While the major-
34 JULY/AUGUST 2009 • MODERN PLASTICS WORLDWIDE mpw.plasticstoday.com