Is Soft Landing Possible?    

The total exports exceeded the total imports by US$238.1 billion in the first eleven months, an increase of 52.2%. The exports surplus is mainly contributed by the processing trades and foreign funded firms, a researcher analyzed. China's central government held a conference in December 2007 to prevent from overheated investment and inflation in 2008. It means that China want to realize a soft landing of economy and trade. Some economists think Chinese economy has the possibility of rigid landing. But most of economists predict the growth of GDP in 2008 will be around 10.4%, slight lower than 2007.
   China chemical industry will face four major factors: a. Demand for chemicals remains brisk at home and abroad; b. Supply of energy and raw resources tend to be tight; c. Global petroleum price goes up, driving the downstream cost to go up; d. Investment on fixed assets is rebounding, more and more chemicals will face the pressure of capacity surplus. "Margin will be narrowed due to the increased cost and capacity," an analyst from Changjiang Securities commented.
    Of course, opportunities will be left for chemical firms who can manage the challenges well. The target of saving energy and reducing pollutions will be the highlight topics in next years. Chemicals firms should firstly prefer considering the pressure of protecting environment to catching up high profit. Requirements from citizens and governments will help those firms who do better in protecting environment beat the chemical firms that create pollutions.  
    "The first target for 2008 is to remain a steady supply and price of grains," said Nie Zhenbang, Director of the State Grain Administration on an important conference held January 4th. "Exports and industrial consumption of grains shall be controlled strictly so that grains for citizens and feeds can be guaranteed." That is a sign of prohibiting grain based alcohol projects.    
    Qingdao refinery of Sinopec Corp. is close to completion, the company will therefore need to import more crude oil.   

Zhong Weike
January 10th, 2008