On March 5th, the State Council released the 2025 Government Work Report, setting a tone that emphasizes both stable growth and high-quality development. It clearly outlines the goals and pathways for economic and social development in the new year. Building on the achievements of 2024, the report further focuses on structural reforms and high-quality development, sending clear signals about deepening supply-side reforms, nurturing new drivers of growth, and ensuring people's well-being. So, what impact does this have on the plastic industry? Let's take a look below.

I. Summary of Key Report Content

The 2025 work report continues the GDP growth target of 5%, emphasizing the balance between economic growth and quality. Fiscal policy remains proactive, with a planned deficit ratio of 4%, supplemented by local government special bonds, special treasury bonds, and other tools, bringing the total new government debt for the year to 11.86 trillion yuan, an increase of 2.9 trillion yuan from the previous year.

In terms of industrial policy, "new quality productivity" has become the key phrase.The report proposes promoting the safe development of emerging industries such as commercial aerospace and low-altitude economy, nurturing future industries like biomanufacturing, quantum technology, embodied intelligence, and 6G, while accelerating the digital transformation of manufacturing, focusing on the development of intelligent connected new energy vehicles, AI terminals, and smart manufacturing equipment.

In the consumer sector, through special actions for trade-in of old items and support from 300 billion yuan in special treasury bonds, the potential for domestic demand is further activated. In the field of people's livelihood, policies on education, healthcare, and housing continue to be strengthened.

II. Multiple Industries Welcoming Structural Opportunities

The policy inclination towards manufacturing, consumption, and emerging industries as outlined in the report will directly benefit multiple sectors.

Automotive Industry benefits from the breakthrough of new energy vehicle production reaching a target of 13 million units, coupled with the promotion of intelligent connected technology, which is expected to expand the demand for upstream industrial chain components such as batteries, lightweight materials, and intelligent parts.Electronics and Electrical Appliances Industry, under the stimulus of trade-in policies for consumer goods, may see an accelerated release of demand for updating household appliances and 3C products. At the same time, increased investment in the development of AI-powered smartphones, computers, and other terminal devices will drive growth in the high-end electronic components market.Packaging Industry, driven by both consumption recovery and green transformation, faces pressure to upgrade from traditional packaging to environmentally friendly materials. Biodegradable plastics and circular packaging solutions may become key directions.

Plasticization industry As a supplier of upstream basic raw materials, its prosperity is closely related to policy guidance. From the demand side, the expansion of emerging industries such as new energy vehicles and smart terminals will boost the demand for engineering plastics, electronic chemicals, and lightweight materials; policies encouraging the replacement of old consumer goods with new ones may also stimulate short-term demand for general-purpose plastics in traditional areas such as home appliances and daily chemical products.

Plasticization companies should increase their R&D investment in high-performance materials, specialty chemicals, and low-carbon process technologies. This not only meets the market's demand for green and efficient products but also significantly enhances their own competitiveness, driving the industry towards high-quality and sustainable development.

Three, under the challenge of green transformation, plastic giants have taken the lead in layout

In the long term, stricter environmental policies impose rigid constraints on the industry. The report proposes a "green consumption incentive mechanism" and a target to reduce energy consumption per unit of GDP by 3%, forcing companies to accelerate their transition to degradable materials, recycled plastics, and low-carbon production processes. Many industry leaders worldwide have already taken the lead.

As a global leader in the plastics industry, Kingfa Science & Technology has integrated sustainable development closely with its business strategy, focusing on two emerging areas: recycled plastics and bioplastics. The company has proposed an integrated solution for a circular economy of plastics, aiming to solve the problem of white pollution. It also plans to reduce greenhouse gas emissions per unit of product by at least 30% by 2030 compared to 2022, and to produce 1 million tons each of green plastics, recycled waste plastics, and environmentally friendly, high-performance recycled plastics.

Dow and Freepoint Eco-Systems have reached an agreement to produce 65,000 tons of pyrolysis oil from recycled plastic waste annually, which will be used to produce virgin-grade equivalent plastics. Additionally, Dow is collaborating with Procter & Gamble to develop recycled polyethylene technology for packaging plastics.

SABIC has partnered with Plastic Energy in the UK to establish Europe's largest pyrolysis oil plant for waste plastics in Geleen, Netherlands, capable of processing 200,000 tons of mixed waste plastics annually. The produced pyrolysis oil will serve as raw material for ethylene cracking units, used in the production of food-grade polyethylene (PE). Plans are in place to replicate this model in Quanzhou, Fujian, by 2025, supporting the ExxonMobil integrated refining and petrochemical project, aiming to create an Asian hub for chemical recycling of waste plastics.

LG Chem has launched a 100,000-ton annual production line of PLA (polylactic acid) at its Daejeon base in South Korea, while also constructing an 80,000-ton PBAT (polybutylene adipate terephthalate) facility in Huizhou, China, forming a "dual pillar" in degradable materials.

Honeywell has signed a cooperation agreement with Inner Mongolia Jiutai Group to construct a 100,000-ton/year capacity for sustainable aviation fuel (SAF), using eFining™ process technology to convert e-methanol into e-fuels.

These cases demonstrate that chemical giants are vying for the green material track. In the future, pressures from policy compliance and demands for high-end applications will drive the industry further towards larger scale and higher value directions.

IV. Surging Demand for High-Performance Materials, Driven by Upgrades in the Automotive and Electronics Supply Chains

The report emphasizes directions such as "intelligent connected new energy vehicles" and "AI terminals," which directly boost the demand for engineering plastics, special films, and electronic chemicals. For example, in the context of new energy vehicles, under the trend of lightweighting, the application ratio of materials like PA (nylon) and PPS (polyphenylene sulfide) in battery casings and connectors is increasing year by year. By 2024, the domestic market size for automotive engineering plastics is expected to exceed 80 billion yuan, with an estimated growth rate of 15%-20% in 2025.

In terms of major manufacturers' activities, Asahi Kasei announced an investment of 5 billion yuan to expand its polyamide resin production capacity in Jiangsu, focusing on supplying automakers such as NIO and BYD; Dow Chemical and Huawei are collaborating to develop low dielectric loss LCP (liquid crystal polymer) materials for 5G base stations, aiming to gain a first-mover advantage in 6G technology.

Covestro has launched the world's first commercial production line for chemical recycling of polycarbonate (PC) in the Shanghai Chemical Industry Park, capable of processing 20,000 tons of waste plastic annually. Through depolymerization technology, it converts discarded CDs, car lamp covers, and other PC products back into monomers, which are then reused in the production of high-end electronics and medical-grade materials. The project has established supply chain collaborations with Huawei and BMW, aiming to achieve 30% of PC product raw materials from recycled sources by 2030.

Mitsubishi Chemical is investing 1.5 billion USD in Rayong, Thailand, to build a plant with an annual capacity of 200,000 tons of bio-based polycarbonate (Bio-PC), using palm oil by-products as raw material, replacing traditional petroleum-based PC. This production line is expected to start operations in 2026, primarily supplying consumer electronics giants such as Apple and Samsung, for use in mobile phone casings and laptop components, reducing carbon footprint by 50% compared to conventional processes.

In addition, under the stimulus of the "trade-in for new" policy for home appliances, the short-term demand for general-purpose plastics such as ABS (Acrylonitrile-Butadiene-Styrene copolymer) and PC (Polycarbonate) has warmed up, but in the long term, they still face the pressure of substitution by recyclable materials.

Conclusion

For plastic companies, optimizing production capacity structure and technological innovation have become key. On one hand, traditional general-purpose plastic production may face overcapacity pressure, requiring an increase in concentration through industrial chain integration; on the other hand, high-end areas such as biobased materials and high-performance composite materials will receive dual support from policies and capital. Companies need to seize the benefits of policy while addressing the challenges of environmental protection, energy consumption, and intensified market competition, seizing new tracks through technological investment and model innovation. In the future, the ability to coordinate upstream and downstream of the industrial chain, cross-industry technology integration, and global layout may become the core competitiveness for enterprises to break through.

Editor:Carrie