Pulsating – this word is certainly most apt to describe the activity at “Chinaplas 2019” (www.chinaplasonline.com), Asia’s largest plastics trade fair, in Guangzhou, Guangdong, from 21-24 May. The bustling activity at the booths was matched by the sultry heat of southern China, which immediately struck participants in the face outside the air-conditioned halls.

The main themes at Chinaplas were in line with the pulse of the times – digitalisation, e-cars, the development of 5G networks and circular economy (see Plasteurope.com of 29.04.2019) were the subjects of accompanying special shows and conferences. China is an innovation factory and the government is further pushing this forward. In addition, the country has a world market share of almost 30%, and its annual plastics consumption is over 100m t. Expansion measures by compounders such as Radici (see Plasteurope.com of 30.04.2018) and Albis (see Plasteurope.com of 11.12.2018) and masterbatch suppliers including Clariant (see Plasteurope.com of 11.06.2019) are responses to this demand.

Chinaplas, which takes place in annual rotation either in Guangzhou or in Shanghai, is gaining more importance. Organiser Adsale (Hong Kong / China; www.adsale.com.hk) already considers the trade fair to be at eye level with the world’s leading trade fair, “K” (www.k-online.de), in Düsseldorf / Germany. The number of exhibitors – 3,615 in total – and the exhibition area of 250,000 m² already exceed “K” figures, but the number of Chinaplas visitors is still less. Adsale registered 163,314 visitors in the four fair days in Guangzhou, while K 2016 attracted 232,053 visitors (see Plasteurope.com of 27.10.2016) with the catch being that the trade fair in Düsseldorf is twice as long.

Chinaplas 2019 attracted almost 10% fewer visitors than last year’s fair in Shanghai (see Plasteurope.com of 14.05.2018). This should not come as a surprise, as Shanghai is a much larger venue and even more frequented by international visitors. At the Guangzhou venue, the event reached a record number of attendees. Compared to the edition last there in 2017 (see Plasteurope.com of 24.05.2017), Chinaplas grew by 5.2% in 2019. As usual, the most visited day of the fair was the second, which drew 61,699 visitors. A total of 42,005 trade fair visitors came from abroad, which translates to 25.79% (26.5% in 2018) of all visitors.

Attendees in Guangzhou this year considered K in Düsseldorf as inhibiting, with the world’s leading plastics trade fair in Germany also occurring in 2019. Many do not want to attend two major trade fairs in the same year. Some exhibitors also pointed out that fewer visitors from Southeast Asia came to Chinaplas due to parliamentary elections in India and Indonesia. However, exhibitors surveyed by Plasteurope.com declared unanimously that these shortcomings did not impair the high quality of many customer interactions. “Our stand was very well attended on all days,” said Gerhard Böhm, managing director of Sales at Arburg. “So we were able to make new contacts and maintain existing ones. Even actual projects were discussed at the fair.” The company, which builds its injection moulding machines exclusively in Germany, has recently expanded its warehouse in China and intends to extend its local business with automation solutions and production cells through collaborations with local manufacturers.

Competitor KraussMaffei (KM) also plans to intensify its activities in China. The company, which is owned by the Chinese group ChemChina since 2016 (see Plasteurope.com of 04.05.2016), is looking at strengthening local R&D activities and expanding production in Jiaxing (see Plasteurope.com of 08.05.2019). KM also wants to supply global markets from China in the future, a spokesperson said. With its second brand “Wintec”, which is produced in China, competitor Engel already set its sights on new target markets in the Americas last year (see Plasteurope.com of 26.04.2018).

With these goals in mind, Engel and the rest of the plastics industry probably do not like the escalating trade war between the US and China. The latest increase in US tariffs on Chinese goods and the foreseeable countermeasures from Beijing are poison to business (see Plasteurope.com of 24.05.2019). Like a gloomy cloud, the uncertainty about what exactly might come hung over many trade fair discussions. When asked about their assessment of the possible effects of the trade war, Chinese exhibitors and major international corporations often remained rather reserved. One of the exceptions was a representative of Chinese compounder Top Polymer, who openly admitted that the conflict was complicating his company’s planning. At an event before the start of the fair, Adsale CEO Stanley Chu also said there are impacts from the trade dispute, but played them down as “not significant.” The mere fact that Chu felt compelled to mention the negative effects gave rise to more serious suspicions in the opinion of several attendees.

A Kautex spokesperson made no secret of the fact that the export of parts produced in China and destined for the US had collapsed – just last year, the blow moulding machinery manufacturer installed separate management for its Chinese activities. Factoring in the tariffs, US processors could just as well order directly from Germany, the spokesperson said. Reifenhäuser said that the cost of customs clearance had increased considerably. Representatives from Battenfeld-Cincinnati and Leistritz added that in other East Asian countries such as South Korea and Thailand, many processors were hitting the brakes on projects to wait for further developments.

Increasing uncertainty is also being felt in China. The German engineering federation Verband Deutscher Maschinen- und Anlagenbau (VDMA, Frankfurt; www.vdma.org) reported that machinery deliveries to China increased by only 0.4% year-on-year in the first quarter of 2019. “The uncertainty of our customers caused by US trade sanctions is leaving unmistakable traces,” said the VDMA. If the tariffs were extended to all trade between the US and China, global economic output would be reduced by USD 600 bn (around EUR 540 bn) in 2021, according to analysts from news agency Bloomberg. China would not have to bear all of this, but certainly a major share of the losses.

The uncertainty is leaving its mark. In China, sales of new cars shrank in 2018 for the first time in more than two decades. Additionally, this year’s car sales are expected to remain at the 2018 level with 28.1m vehicles, according to state news agency Xinhua, citing a report by the Chinese automobile manufacturers association. But China remains innovative – sales of electric cars and hybrid vehicles are expected to remain high and grow by about 27% to 1.6m units.

China’s openness to innovation is also reflected in the population’s heavy use of mobile phones. The impression is that four out of five people under the age of 60 are holding a phone in their hands when they take the metro or walk through the streets of Guangzhou. With this in mind, the expansion of 5G telecommunication networks is also being pursued more vigorously than in Europe. In addition to being an innovation-friendly country, there are other positive impulses that could cushion the effects of the trade war. This undoubtedly includes the effects from constructing the “New Silk Road”, with Beijing relying predominantly on Chinese workers for its infrastructure projects abroad. But there is also a lot going on in its mainland. For example, per capita consumption of plastics in China increased to 65 kg in 2018 (up from 54.1 kg in 2017), a figure that is expected to go up after Beijing decreased the value-added tax to incite consumers to buy more.

No doubt about it, China continues its rhythm that impacts the world. The next Chinaplas will take place from 21 to 24 April 2020 in Shanghai.