One of the hidden worries: insufficient demand triggers market weakness Affected by the world economic environment, China's economic growth began to slow down. Whether from the perspective of GDP growth, industrial added value, or corporate orders, the Chinese economy is already in contraction. Insufficient demand has become a major issue in China's economic development, including the development of the paint industry. The direct impact of the world economic downturn on China is a sharp drop in external demand. The impact of the world financial crisis on China's paint and coating industry began to appear in September 2008, and overseas orders fell by about 10% year-on-year. As the main export variety, the export volume of architectural coatings and wood coatings decreased significantly. In addition, due to shrinking export markets for plastic toys, ships and machine tools, the corresponding demand for paint varieties has declined, ranging from 5% to 15%. While the export situation is not optimistic, the internal consumption of China's coating products is also facing the problem of whether it can be started quickly and effectively. Although the country has recently taken various measures to expand domestic demand, from the perspective of China's chemical industry itself, it is still possible to experience a relatively difficult period in 2009. The downturn in the upstream market and the cooling of consumer hotspots mean that domestic demand for coatings in the downstream is also in a weak state. In short, 2009 will be a difficult year for Chinese paint companies. Although the government has issued many plans to stimulate the economy and revitalize the industry, due to the lagging effect of fiscal policy, the full recovery of economic growth is expected to wait until the fourth quarter of 2009. According to expert predictions, in the first half of 2009, domestic demand for paint will increase by 2% to 5% year-on-year, and the year-on-year growth rate of demand in the second half of the year may be able to increase to about 10%. However, the export market is expected to have negative growth throughout 2009. Experts predict that by the beginning of 2010, the effects of China's economic stimulus and industry revitalization plan will gradually appear in the paint market. Therefore, the Chinese coatings industry is expected to come out of the stage of downward growth in 2010, and the export market will return to positive growth in 2010. In short, China's paint production is expected to regain double-digit growth rates in 2010. The second worry: lack of talent Although the Chinese paint market still has a large growth space and promising prospects, we must recognize that there is still a large gap between the development level of the Chinese paint industry and the developed countries. Including market capacity and per capita consumption level, market standardization degree, industry concentration, talents, enterprise scale and financial resources, technological innovation capability, business model and ideology, laws and regulations, etc. Among them, the gap in talent ranks first. Chinese enterprises generally lack management and management talents with comprehensive qualities such as global business philosophy, group management ideas, financial foreign trade ideas, integrated upstream and downstream marketing models, and the introduction of foreign companies. At present, China's coatings industry is dominated by small and medium-sized private enterprises. The cultural level of enterprise owners and managers is generally low. Most enterprises have the disadvantage of market regionality and product unity. Few enterprises have established factories abroad to operate. Lack of sustained and stable, high-quality technical personnel dedicated to the development of new products and processes. Due to the lack of infrastructure, scientific research funds and experimental equipment, product development is mostly at a low level. The technical personnel of Chinese coating companies often do some experiments on raw material substitution and replacement, with fewer innovative ingredients. Industry experts have a serious fault phenomenon. Except for some well-known technical experts of the older generation, the young and middle-aged generation of technical experts have almost no nationally recognized professional leader. There is a lack of a professional teaching team with high theoretical and practical levels. At present, there are no real paint universities and paint majors in China, so a formal paint professional teacher team cannot be formed. The paint industry experts are all guerrilla services for enterprises, industries and governments. Without a standardized education system, paint education cannot form a systematic theory. The training of professional and technical talents in the paint industry mostly depends on the "master to teach apprentice" model, and the inheritance and systemicness of the technology and formula are not strong. The paint industry generally lacks high-quality production experts and skilled construction teams in the later period. There is a serious lack of paint grading personnel, analysis and testing personnel in production, or uneven levels of quality, and insufficient professionalism. The late construction site lacked paint supervision and professional and technical personnel guidance. Government policy support provides potential for the growth of the paint market At present, China is the second largest paint market in the world, second only to the United States. In 2007, the total output of Chinese coatings was about 6.2 million tons, an increase of 22.3% over 2006. In 2008, the total output of Chinese coatings reached 6.38 million tons, with a total output value of 155 billion yuan. Although currently affected by the economic environment, the growth rate of China's coating market has dropped significantly, however, China is still one of the fastest growing regions in the world's coating market. The Chinese paint market is fiercely competitive, with approximately 4,500 active paint companies. The world's major paint and coating companies have established production bases or joint ventures in China, including AkzoNobel, PPG, Nippon, BASF, etc. Architectural coatings, automotive OEM coatings, automotive repair paints, wood paints, marine paints, anti-corrosion paints, coil coatings, etc. are the most widely used coating varieties. Among them, construction and woodware are the two largest application products in the Chinese coatings market, and their sales account for 30% and 24% of the total sales respectively. Automotive OEM, automotive repair, marine, anti-corrosion, and coiled materials are promising application fields in the future. The coatings market in these application fields is expected to maintain a high growth rate. Although, due to the impact of the slowdown in world economic growth, China ’s coatings industry ’s exports have declined and foreign investment has decreased, however, because China ’s own economic situation is stable and has maintained rapid growth for many years, the Chinese economy has a good foundation. The impact on entities is much lighter than in some developed countries. Together with the “4 trillion yuan plan†and the top ten industry revitalization plans, it provides strong support for the steady development of the Chinese economy, mitigates the negative impact of the world economic slowdown on the Chinese paint market, and provides the possibility for the growth of the Chinese paint market. Flashlight,Flashlight Rechargeable,LED Flashlight,USB Rechargeable Flashlight,Blaze Flashlight Yuyao Flylit Appliance Co.,Ltd , https://www.flylitappliance.com
Two potential worries and a major advantage in the paint market
The global economic downturn has affected almost every industry, and the paint industry is certainly no exception. Industry insiders predict that the production and sales growth rate of the paint market in 2011 will be flat or decline. However, thanks to the support of the Chinese government's active policies, the paint market should resume rapid growth in 2012.