The 15th Five-Year Plan period is a crucial phase for China to transition from a major chemical industry country to a powerful one.

　　China is already the world’s largest producer of chemical products, yet there is still room for improvement on the path to becoming a global chemical powerhouse. From refining to olefins and aromatics, and then to the new materials industry—how can we advance toward becoming a true chemical power? What will be the development direction during the 15th Five-Year Plan period? At the 2025 China Petrochemical Industry High-Quality Development Conference recently hosted by the China National Center for Economic and Technological Development of the Chemical Industry, experts and industry insiders engaged in an in-depth discussion on these questions. This edition publishes selected viewpoints from the experts; stay tuned.

　　The text and images in this edition, except for those explicitly credited, were compiled and produced by our reporter Cheng Qiang.

　　 Over the next decade, from big to strong.

　　Yang Ting, Deputy Director of the China National Chemical Economic and Technological Development Center and Secretary-General of the Chemical Industry Park Working Committee of the China Petroleum and Chemical Industry Federation, introduced that since 2010, China has surpassed the United States to become the world’s largest producer of chemical products. Currently, China’s chemical industry produces 42% of the world’s major chemical products, with its total output already exceeding the combined output of the United States, Japan, and Germany. During the 14th Five-Year Plan period, China’s refining and ethylene production capacities will surpass those of the United States, completing the ultimate breakthrough in the two remaining key areas of bulk chemicals. As a result, China has become the world’s largest chemical powerhouse—boasting the most extensive industrial chain, the richest supply of raw materials, and the largest market.

　　China has already brought the “large-scale” development of its chemical industry to an unprecedented level, yet there is still room for improvement on the path toward becoming a global chemical powerhouse—especially in terms of the self-sufficiency rate for high-end chemical materials, which remains very low. In 2024, China’s total chemical imports amounted to 230.2 billion U.S. dollars (1.6 trillion RMB), with imports of the three major synthetic materials accounting for 56.57 billion U.S. dollars. Looking at the average profit margins of the world’s top 50 chemical companies, only 3.3% of Chinese companies made the list—a figure far lower than that of Germany (11.3%), the United States (10.7%), and Japan (9.5%).

　　A powerful chemical industry is a crucial support for building a manufacturing powerhouse. The period from 2025 to 2035 represents a critical phase for China’s transition from being the world’s largest chemical producer to becoming the world’s leading chemical power. Solidifying the foundation for building a powerful chemical industry through high-quality development in the chemical sector is the overarching guiding principle and primary task for the industry’s development during the 15th Five-Year Plan period. Key priorities include: enhancing the sophistication of the industrial structure, elevating the level of innovation capacity building, boosting green and low-carbon development, improving the application of smart manufacturing, strengthening international cooperation among enterprises, and promoting high-quality development of chemical industrial parks.

　　Entering a stage of comprehensive competition in R&D and innovation.

　　Yang Ting said that there are roughly 300,000 chemical substances worldwide, yet only about 2,000 new chemicals are developed each year—a rate of innovation of approximately 6 per thousand. This means the chemical industry is not an industry characterized by rapid innovation, and China should find it relatively easier to catch up with the leaders.

　　Before the 14th Five-Year Plan, R&D in China’s chemical industry was largely focused on improving processes and introducing, digesting, and absorbing foreign technologies. In terms of original innovation, there was still a significant gap compared to developed countries and regions in Europe and the U.S. During the 15th Five-Year Plan period, China’s chemical industry has entered a stage where it is fully competing with developed countries in R&D and innovation.

　　Currently, R&D expenditures by China's chemical enterprises account for 16.8% of global industry R&D spending, while the U.S. accounts for 18.6% and Japan for 21%. In terms of investment in research and innovation, China's chemical industry spends 0.77% of its sales revenue, compared to 1.2% in Europe, 1.79% in the U.S., and 3.3% in Japan. Further increasing the proportion of R&D expenditure relative to sales revenue, consolidating our advantages in applied R&D, leveraging AI (artificial intelligence) technologies to narrow the gap in accumulated application data, and breaking through monopolies on existing technologies will be the primary tasks for enhancing the chemical industry’s innovation capabilities during the 15th Five-Year Plan period.

　　Looking ahead to 2035, after completing a comprehensive and systematic upgrade of the chemical industry, China is expected to rank first globally in both scale and efficiency for the vast majority of chemical products. Moreover, a number of enterprises and chemical parks with world-class competitiveness will emerge, making China a true global powerhouse in the chemical industry.

　　Refining: Centered on integrated deep refining and processing, accelerate the shift toward materials-oriented operations.

　　In 2024, China’s crude oil primary processing capacity reached 933 million tons per year, and the refining industry’s operating revenue was approximately 4.8 trillion yuan, accounting for 33.1% of the chemical industry’s total revenue. During the 15th Five-Year Plan period, the refining industry will accelerate its shift from a fuel-oriented model to a materials-oriented one, with deep integration of refining and petrochemical processes serving as the core driver of industrial upgrading.

　　Yang Ting said that as the development of alternative energy accelerates, China's diesel consumption will peak in 2023, gasoline consumption will peak in 2024, and oil demand is expected to peak by 2028. By 2030, the country's primary crude oil processing capacity will be capped at no more than 1 billion tons per year.

　　In terms of electric power substitution, China's stock of new-energy vehicles exceeded 31.4 million units in 2024, replacing approximately 28 million tons of refined oil consumption. By 2030, the volume of replacement is expected to reach 65 million tons.

　　In terms of natural gas substitution, in 2024, China’s fleet of LNG (liquefied natural gas) heavy-duty trucks exceeded 800,000 vehicles. Various LNG/CNG (compressed natural gas) vehicles have replaced approximately 25 million tons of refined oil consumption. It is projected that by 2030, the volume of substitution will reach 40 million tons.

　　In terms of other alternative energy sources, fuel ethanol and methanol, as components of gasoline, are expected to replace 5.48 million tons of refined oil consumption in 2024, with the replacement volume projected to reach 6 million tons by 2030. Biojet fuel is expected to displace up to 2.5 million tons by 2030.

　　Ethylene: Controlling costs is key; expanding into high-end products is the way forward.

　　In 2024, China's ethylene production capacity reached 53.84 million tons per year, ranking first in the world; by 2030, it is expected to reach between 85 million and 90 million tons per year, further solidifying its position as the world's largest producer.

　　During the 15th Five-Year Plan period, China’s ethylene production capacity will grow faster than its consumption, and the primary approach will be to promote import substitution of high-end products such as downstream polyethylene, thereby driving the ethylene industry toward comprehensive quality improvement, efficiency enhancement, and structural upgrading.

　　Yang Ting noted that ethylene plants currently using naphtha as a feedstock are all operating at a loss, and ethylene production capacities in Europe, South Korea, and Japan will all be reduced. Ethylene production from ethane yields an average gross profit of 2,863.7 yuan per ton; however, its development is constrained by feedstock availability. Coal-to-ethylene production generates an average gross profit of 958.6 yuan per ton, but its growth is also limited by national policies. Ethylene production via naphtha steam cracking currently incurs an average gross loss of 95.3 yuan per ton; nonetheless, it remains a key focus for future development, and further cost reductions are urgently needed.

　　Chen Weiming, Vice President of Dow Jones Consulting, analyzed that in the next five years, 64% of the world’s newly added ethylene production capacity will come from China, while Western Europe and Japan will lead the process of capacity optimization. South Korea is also advancing its capacity optimization efforts, and other countries and regions will continue to shut down facilities that lack competitiveness. The global ethylene capacity expansion cycle is expected to conclude only after 2029. While imported ethane and coal-to-olefins have cost advantages, geopolitical factors and high carbon emissions remain uncertain constraints on both approaches.

　 　Olefins: New raw materials and technologies deserve attention.

　　Li Jinzhe, a researcher at the Dalian Institute of Chemical Physics, Chinese Academy of Sciences, stated that the high-temperature steam cracking of naphtha to produce olefins is a typical energy-intensive chemical process that urgently needs to undergo transformation and upgrading.

　　The methanol-to-olefins (DMTO) technology developed by the institute has been licensed for 36 sets of plants, with an olefin production capacity of 24 million tons per year. This has fostered a strategic emerging industry worth hundreds of billions of yuan and has also driven the development of a methanol industry with an annual capacity of 60 million tons. The technology was awarded the First Prize of the National Technology Invention Award in 2014.

　　Based on this technology, the Dalian Institute of Chemical Physics has proposed a new approach for the transformation and upgrading of the petrochemical industry: coupling methanol with naphtha to produce olefins.

　　Since both methanol and naphtha can be catalytically converted on molecular sieves, in principle, it is possible to use the same molecular sieve to catalyze a mixed feedstock. By coupling in situ the strongly exothermic reaction of methanol conversion with the strongly endothermic reaction of naphtha conversion, we can significantly reduce energy consumption while simultaneously increasing olefin yields, thereby achieving an upgrade and replacement of olefin production technologies in the petrochemical industry.

　　A pilot-scale demonstration involving thousands of tons has proven that methanol and naphtha can be converted on a single catalyst and in a single set of equipment, enabling both thermal coupling and reaction coupling. When 1.1 tons of naphtha and 0.93 tons of methanol are coupled for conversion, they produce 1 ton of olefins; in contrast, when these two feedstocks are not coupled, the total olefin yield is only 0.84 tons.

　　Li Jinzhe stated that the industrialization goal of this technology is to increase the utilization rate of naphtha feedstock by more than 10 percentage points and reduce energy consumption by one-third.

　　At the end of last year, the methanol-to-naphtha coupled olefin production technology passed the scientific and technological achievement evaluation organized by the China Petroleum and Chemical Industry Federation and reached an internationally leading level. Currently, a million-ton-scale demonstration plant utilizing this technology has begun construction.

　　Polyolefins: Product Homogenization Calls for New Technologies

　　Yu Chunmei, Deputy Chief Engineer at China National Petroleum Jilin Chemical Engineering Co., Ltd., said that the surge in polyolefin capacity expansion has exacerbated market oversupply, while China’s high-end polyolefin production technology remains overly reliant on imports, and product homogenization is calling for new technologies!

　　The key high-end polyolefin products include mPE (metallocene polyethylene), mPP (metallocene polypropylene), and POE (polyolefin elastomer). In 2024, China’s output of high-end polyolefins was approximately 6.54 million tons, while demand reached 15.6 million tons, resulting in a self-sufficiency rate of only 42%, significantly lower than that of other new chemical materials.

　　China has largely imported polyolefin process technologies from abroad, with very few original technologies developed domestically. There are two main production processes for high-pressure polyethylene, yet China lacks any original technologies in this area. As for low-pressure polyethylene, the three primary processes are the gas-phase process, the slurry process, and the solution process; among these, the solution polymerization process is severely underdeveloped and urgently requires breakthroughs.

　　If only two or three grades are produced annually using the Ziegler-Natta catalyst, the gas-phase process has an advantage. However, when considering investment costs, operating expenses, product selling prices, operational flexibility, and adaptability to market changes, the solution-process method offers clear long-term benefits. For instance, in China, the market size for solution-process octene film resins is between 200,000 and 400,000 tons per year, with selling prices 2,000 to 4,000 yuan per ton higher than those of gas-phase film resins. The market is essentially monopolized by Dow Chemical.

　　In the field of polyolefin elastomers, global POE production capacity in 2024 reached 3.162 million tons per year, with consumption reaching approximately 2.54 million tons, and demand continues to grow rapidly. In 2024, China's POE consumption was around 1 million tons, with imports totaling 950,000 tons. Previously, POE was a “bottleneck” material highly monopolized by a handful of major foreign chemical companies. However, as several Chinese enterprises have successfully mastered the full-process production technology for POE, a wave of domestic production has been set off. Currently, China’s operational POE production capacity stands at 420,000 tons per year, and planned new capacity exceeds 3 million tons per year. As a result, POE prices have been steadily declining since last year.

　　In the field of ultra-high-molecular-weight polyethylene (UHMWPE), high-end applications such as military ballistic materials and battery separators for new-energy vehicles are experiencing explosive growth. Currently, the total overseas production capacity amounts to 235,000 tons per year. In 2024, a domestic plant with a capacity of 100,000 tons per year will come on stream, marking the entry of UHMWPE production into an era of large-scale capacity. At present, high-end UHMWPE products are monopolized by foreign companies, and key sectors impose sales restrictions and embargoes on China. Moreover, lithium-battery separators also rely on foreign equipment, technology, and raw materials, making it imperative to prioritize the development of this sector.

　　Yu Chunmei emphasized that high-end polyolefins are characterized by high technological barriers, high prices, strong profitability, and a wide variety of product grades, and thus require a focus on rapid technical services. Continuously deepening research into niche markets is the key to effectively capturing the high-end polyolefin market.

　　 Aromatics: Upstream PX prices began to rebound first, while downstream PTA-PET competition intensified.

　　Yang Ting said that China has become the world's center for the aromatics industry. In 2024, China's PX (paraxylene) production capacity accounted for 53.9% of the global total, and its consumption accounted for 73.8% of the global total—both ranking first in the world.

　　Downstream in the aromatics industry chain, PTA (purified terephthalic acid) and PET (polyethylene terephthalate) continue to suffer from oversupply, causing profits to concentrate upstream at the PX feedstock stage. As a result, mid- and downstream enterprises are generally under pressure and facing losses.

　　During the 15th Five-Year Plan period, China’s aromatics industry will accelerate its move toward high-end development and integration along the industrial chain, and will drive the overall upgrading of the industrial chain by expanding exports of downstream products.

　　In 2024, China’s PTA production capacity reached 91.23 million tons per year, and its PET production capacity reached 93.19 million tons per year, with the trend of “the strong getting stronger” becoming increasingly pronounced. Over the next five years, there are few plans for new PX facilities to come online, meaning that capacity growth is entering a bottleneck phase. Meanwhile, demand continues to grow steadily, and by the end of the 15th Five-Year Plan period, the annual PX supply gap will be approximately 4.4 million tons. It is expected that during the 15th Five-Year Plan period, China’s PX-PTA-PET industrial chain will maintain its absolute competitiveness; however, competition will intensify due to overcapacity in the PTA-PET segment.

　　Xiao Bing, deputy director of the Marketing Research Institute at the China Petrochemical Economic and Technical Research Institute, pointed out that China’s PX industry chain is undergoing a bottom-up, backward-integrated development. Leveraging its strengths in the textile industry, the industry chain’s breakthrough began with PET. From 2000 to 2010, China shifted from being a net importer of PET to achieving a self-sufficiency rate exceeding 110%. This, in turn, spurred the development of PTA; from 2005 to 2015, PTA’s self-sufficiency rate rose steadily from 46% to over 99%. However, the development of PX has been relatively lagging, and currently, China still relies on imports for 20% of its needs.

　　During the 15th Five-Year Plan period, China’s PX production capacity is expected to grow at an average annual rate of only 4.4%, lower than the 10% growth rate during the 14th Five-Year Plan. Domestic plans call for a net increase of 10.2 million tons per year in PX production capacity, which is projected to boost the self-sufficiency rate of PX from 80% in 2025 to 84% by 2030. Supported by a relatively tight supply of PX, aromatic products—including PX—began to enter a recovery phase as early as 2023.

　　New chemical materials: There is an urgent need to master core technologies and accelerate development in high-end sectors.

　　Xie Man, Secretary-General of the National Expert Advisory Committee for the Development of New Materials Industries, pointed out that during the 15th Five-Year Plan period, key areas for developing advanced petrochemical and chemical materials include high-performance polyolefins, high-performance synthetic rubbers and elastomers, advanced adhesives and coatings, functional polymer materials, and bio-based green polymer synthesis materials.

　　Specifically, POE and COC (cycloolefin copolymer) are to be scaled up for mass applications in emerging fields such as next-generation photovoltaics, new-energy vehicles, and clean medical packaging; liquid styrene-butadiene rubber and specialty electronic resins are to be scaled up for mass applications in high-frequency electronic circuit components; high-temperature-resistant coatings are to be scaled up for mass applications in equipment used for deep-sea and polar navigation, domestically produced large aircraft, and specialized aircraft; bio-based PTT (polytrimethylene terephthalate), PEF (polyethylene furanoate), and PBS (polybutylene succinate) materials are to be scaled up for mass applications in high-barrier food packaging and functional medical consumables; and a demonstration project for the green, low-cost recycling of waste polyester on a scale of tens of thousands of tons is to be established.

　　Yang Ting said that during the 15th Five-Year Plan period, China's demand for new chemical materials is expected to grow at an average annual rate of 8%. By 2030, China's self-sufficiency rate in the new chemical materials industry will reach 89%. The industry will accelerate development in five key areas: upgrading high-end bulk materials, achieving domestic production of electronic chemicals, enhancing the performance of new energy materials, making biomaterials smarter and more intelligent, and ensuring comprehensive support for next-generation materials.

　　In terms of upgrading bulk materials, there still remains a gap in bulk products such as polyethylene, while material products like styrene-butadiene rubber show a structural trade deficit.

　　In terms of the localization of electronic chemicals, the self-sufficiency rate stands at 66.7%, and there is an urgent need to master core technologies. The overall domestic production rate of photoresists has approached 30%; among them, the domestic production rate of photoresists used in integrated circuits is less than 10%, and all EUV (extreme ultraviolet) photoresists rely entirely on imports. The domestic production rate of PPT-grade (impurity content at one part per trillion) wet electronic chemicals is approximately 40%. The domestic production rate of high-purity electronic gases for integrated circuits continues to rise, currently reaching about 45%. Moreover, the import dependence remains high for optical base films such as PVA (polyvinyl alcohol) films and TAC (triacetate cellulose) films, photoresist resins, as well as supporting materials, flexible display materials, and advanced packaging materials.

　　In terms of enhancing the performance of new-energy materials, China’s lithium-battery production is expected to maintain a growth rate of around 20% in the coming years, reaching 3,500 gigawatt-hours by 2030. Lithium batteries are evolving toward higher energy density, higher specific capacity, higher voltage, enhanced safety, wider temperature ranges, and longer lifespans. The commercialization of solid-state batteries is accelerating; small-scale production is expected to begin in 2027, with large-scale production anticipated by 2030.

　　In terms of intelligent biomaterials, China’s biofermentation capacity accounts for over 70% of the global total, and its output of products such as amino acids and organic acids consistently ranks first in the world. The enormous market size and a complete industrial system have laid a solid foundation for transformation and upgrading. In the future, we should promote the intelligentization of biomanufacturing, foster the integrated development of biotechnology (BT) and information technology (IT), and precisely achieve green, efficient, and intelligent production—from material design to manufacturing—thus establishing a closed-loop biological carbon cycle.

　　In terms of future material integration, the primary materials used in the low-altitude economy include carbon fiber composites, glass fiber-reinforced composites, PC (polycarbonate), ABS (acrylonitrile-butadiene-styrene copolymer), PC+ABS alloys, PA6 (nylon 6), EPP (expanded polypropylene), and others. By 2035, the global output value of humanoid robots is expected to reach 154 billion U.S. dollars. The key materials for this sector will encompass COC materials, electronic chemicals, specialty electronic gases, packaging materials, polyether ether ketone, carbon fiber composites, polyurethane, silicone rubber, POE, hydrogels, and more. Computing power is a nation's strength; during the 15th Five-Year Plan period, the compound growth rate is projected at 30%, driving rapid growth in demand for electronic-grade fiberglass and specialized epoxy resins.