Along with the development of Chinese agriculture, the development models for distribution channels will also adapt to new changes 

Before 1982, pesticides in China were totally operated by supply and marketing cooperatives and their subordinate agricultural means of production companies. After more than 30 years’ development, there are still policy barriers in the operation of pesticides, but the market is in fact already open. Traditional circulation channels and emerging channels coexist today.

Pesticide formulations manufacturers in China pay great attention to terminal sales of products. Traditional circulation channels have drawbacks such as many middlemen, difficulty in account receivable collection and inventory control. Some large enterprises of pesticide formulations have attempted to build distribution channel by themselves so as to reduce intermediate circulation and strengthen terminal product services. Traditional channels through distributors are still the mainstream practice today, but innovative modes such as chain operation, group purchase, direct sale and online sale are growing rapidly and already take up around 1/3 of the market. The chain of pesticide circulation channels is being constantly shortened.

In terms of sales model, pesticide manufacturers mostly sell on credit to distributors, however, this model has considerable risks. Quite a few enterprises have shifted to rolling payment. In addition, some enterprises also provide a payment term of 3-6 months to distributors and payment is made at maturity. In most cases, pesticide manufacturers offer goods on credit and settlement is made at year end.

Domestic enterprises’ products are mainly conventional varieties or generic varieties already promoted by foreign enterprises for years. Distributors, therefore, do not care much about technology promotion and mainly rely on retailers for this. In contrast, foreign companies pay great attention to technology promotion, which often include activities such as demonstration tests, spot meetings and advertisements. Demonstration tests and spot meetings mainly target grassroots distributors and some retailers. Promotion methods include profit return and incentive travel to distributors.

Regarding pesticide circulation channels, a mode similar to the mode of “manufacturers – professional unified prevention and control agencies – users” often seen in advanced countries will hopefully be developed in China in the future. Professional pesticide service companies will directly purchase pesticides from pesticide manufacturers. Current distributors will therefore be largely impacted by this practice. As China’s agriculture develops, land circulation and intensive production accelerate and crop structure is also changing rapidly. Innovative models for pesticide channel development shall be developed to adapt to new changes. 

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The investment in China’s real estate development was RMB 10,258.1 billion in 2016, a nominal increase of 6.9% over the previous year. Specifically, the investment in residential buildings was RMB 6,870.4 billion, an increase of 6.4%. The investment in residential buildings accounted for 67% of the total investment in real estate development.

       Catalysts are substances that change reaction rates without changing the total standard Gibbs free energy in reactions. More than 90% of chemical processes need to use catalysts. More than 20% of industrial products are produced through catalytic process. Similar to the classification of other specialty chemicals, petrochemical catalysts can be classified by function and market sectors. By application area, they can be classified into petroleum processing catalysts and chemical reaction catalysts. By function, there are polymerization catalysts, reduction catalysts, oxidization catalysts, etc. In addition, catalysts can also be classified by chemical structure into zeolite catalysts, precious metal catalysts, organolithium catalysts, etc.

       Most of catalysts have three distinguishable components: active ingredients, carriers and co-catalysts.

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Biomass energy is a kind of solar energy stored in organic matter in the form of chemical energy. It directly or indirectly comes from the photosynthesis of plants and is a form of energy with biomass as the carrier. Through planting plants that contain a great deal of energy and processing and converting these plants, secondary energies such as electricity, gas or liquid fuels are produced from biomass energy. It is a renewable energy and also a green energy.

Biomass energies consist of two major categories, biomass electric energy and biomass fuels. Biomass electric energy mainly refers to electricity generated through the planting of rapid growing trees and grasses and combustion of these plants. In recent years, some advanced countries such as the United States and European countries have conducted a large number of researches and tests on energy plants such as elephant grass, ucalyptus, black locust, poplar, panicum virgatum, sorghum, sugarcane and Egyptian banyan. Tests on extracting biomass fuels from sunflower seeds, soybeans, micro algae and rape seeds have also been carried out. Among biomass fuels, the varieties that have aroused the greatest attention are liquid biomass fuels (biofuels), mainly methanol, ethanol (transport fuels existing in the form of alcohol) and other liquid fuels. With the rapid development of biotechnology, the production of liquid fuels from biomass is booming and liquid fuels have become an important component of biomass fuels.

No.1 hot issue: Biodiesel 

Biodiesel is a clean renewable energy. It is a liquid fuel produced with oil crops such as soybeans and rape seeds, fruits of oil trees such as oil palm and pistasia chinensis, oil aquatic plants such as engineering micro algae, animal greases and scrap kitchen oils as raw materials. Biodiesel is an excellent substitute for petroleum diesel. It is a typical “green energy”. The vigorous development of biodiesel has strategic significance in promoting energy substitution, reducing environmental pressure and controlling urban air pollution.

No. 2 hot issue: Fuel ethanol 

Ethanol is commonly called alcohol. It is produced with corn, wheat, tubers and treacle as raw materials through fermentation and distillation. Modified fuel ethanol can be developed through the dehydration of ethanol and the addition of an appropriate amount of modifier, then fuel ethanol, a clean fuel, can be produced after blending it with gasoline at a certain ratio.

Fuel ethanol is an energy produced through the processing of farm crops, forest products and city wastes. It is not only an excellent fuel but also an excellent fuel quality modifier. It has 4 prominent features. First, it can increase the content of oxygen in gasoline to enable full combustion, therefore energy conservation and environmental protection is achieved. Second, it can effectively increase the antiknock index (octane number) of gasoline. Third, it can effectively reduce the content of aromatics and olefins so as to lower the renovation cost in refineries. Fourth, a non-polluting and extremely clean closed-loop circulation can be formed in the entire process of production and consumption. Fuel ethanol can be renewed forever without exhaustion. Test results show that vehicles can use gasoline added with 10% fuel ethanol without any retrofitting. 

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Food additives play an important role in food and beverage manufacturing sector 

       Food additives mainly perform functions of preventing foods from decay and deterioration, improving the sensory quality of foods, promoting the innovation of food varieties and facilitating the processing and manufacturing of foods. Food additives are therefore edible substances that are selected by human based on its own value standard, defined by laws and regulations, added in food processing process and acquired through natural or chemical synthesis. They can be classified by function into antioxidants, preservatives, colorants, gels, sweeteners, spices/flavors, enzymes, acidifiers and emulsifiers.

       In 2016, the market size of food additives (including antioxidants, preservatives, colorants, gels and sweeteners) in the world was around $26.0 billion in 2016. The market size of spices and flavors (including daily chemicals) was $32.0 billion. North America is the world’s biggest food additive market, with US dominating the market, followed by West Europe. The food additive market is already mature. The overall growth in the world will be close to the average global GDP growth. China will be the country with the most rapid growth in food additive consumption, while Japan will see the slowest growth.

       Driven by the huge population and fast development of food processing industry, China is the world’s largest food and beverage consumer, accounting for 26% of the world’s total, followed by West Europe (21%) and North America (19%). Asia is the region with the world’s largest food and beverage processing size. China is estimated to be the country with the most rapid growth in processed food consumption in Asia. 

Future market prospects: 

       (1) The food additive sector will always strictly supervised by laws and regulations. 

       (2) The growth of population, the change of food structure and the increase of income will be major drives to the consumption growth of food additives. 

       (3) Due to the existence of technology barriers, policy barriers and switching barriers for customers in China, the intensity of competition in food additive sector will remain moderate in the next few years. 

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Metals have numerous varieties. They are usually classified into two major categories, ferrous metals and nonferrous metals. Ferrous metals include iron, manganese and chromium and their alloys. Except for ferrous metals, the other 83 metals are all called nonferrous metals. The classification of nonferrous metals is a little different in different countries. They are roughly classified into 5 major categories according to their specific gravities, prices, reserves and distributions in earth crust and discovery and use time: I. Light nonferrous metals; II. Heavy nonferrous metals; III. Rare metals; IV. Precious metals and V. semimetals.

The 10 nonferrous metals, also known as the 10 commonly-used nonferrous metals, refer to 10 nonferrous metal varieties with big output and wide applications. The output of nonferrous metals mentioned in various countries of the world usually means the total output of 10 nonferrous metals, including copper, aluminum, nickel, lead, zinc, magnesium, cobalt, tin, antimony and mercury. The 10 nonferrous metals in China usually refer to copper, aluminum, nickel, lead, zinc, wolfram, molybdenum, tin, antimony and mercury. That is to say, magnesium and cobalt as included in foreign countries are changed to wolfram and molybdenum in China.

Metal products are a collective name. All metal objects produced through various manufacturing means are all called metal products. Metal handicrafts are also in the realm of metal products. There are the manufacturing of structural metal products, the manufacturing of metal tools, the manufacturing of containers and metal packaging vessels and the manufacturing of stainless steel and similar daily metal products.

Driven by policies such as the supply side structural reform and moderate expansion of total demand, the production and the market demand of metals and metal products increased steadily in 2016.  The supply-demand relationship was gradually coordinated. The metal and metal product sector in China maintained an overall stable and sound development.

In 2016, the output of pig iron in iron and steel enterprises above designated size (enterprises with annual turnover of at least 20 million yuan) in China was 701 million tons, an increase of 0.7% over the previous year. The output of raw steel was 808 million tons, an increase of 1.2% over the previous year. The output of ferroalloy was 35.59 million tons, down 2.8% year on year.

In 2016, 10 nonferrous metals producing enterprises above designated size produced 52.83 million tons of 10 nonferrous metals, an increase of 2.5% over the previous year. Specifically, the output of virgin aluminum was 31.87 million tons, an increase of 1.3% y/y; the output of refined copper was 8.44 million tons, an increase of 6.0%; the output of zinc was 6.27 million tons, an increase of 2.0%; and the output of lead was 4.67 million tons, an increase of 5.7%.

In 2016, the metal industry, especially the iron and steel sector, made great achievements in capacity reduction. Infrastructure and automobile sectors will hopefully become demand growth points in the metal industry in the future. China is a major metal products producer, however, the phenomenon of exporting metal products at low prices and importing metal products at high prices should, however, arouse concerns and changes shall be made accordingly. The metal product sector in China should conduct industrial restructuring and upgrading. Enterprises should properly handle the relationship with raw material/auxiliary material enterprises and equipment enterprises through the combination of producers, universities and research institutes and the building of brand quality and jointly turn China into a strong country for metal products production.

Architectural coatings are classified into interior wall coatings and exterior wall coatings. Interior wall coatings include inside coatings, floor coatings and furniture coatings. The output of architectural coatings accounts for 30-40% of the total coating output.

The coating industry in China keeps growing driven by downstream sectors. As a branch of the coating industry, architectural coatings are also growing rapidly. Statistics show that the total output of architectural coatings in China was around 3.51 million tons in 2011, an increase of over 30% over the previous year. It can therefore be seen that despite impacts from the global financial crisis in 2008, the price rise of raw materials and the pressure brought by the central bank’s interest increase, the development trend of architectural coatings has by no means been weakened and a quite high growth was maintained instead.

Driven by industry policies and the market, the construction and decoration sector in China will enter a new development period. The demand of architectural coatings will keep growing and the potential for market expansion will be huge. Moreover, the booming of new countryside building has also greatly stimulated the application of various architectural coatings. It can therefore be inferred that the building industry in China will still grow steadily for at least a decade. Local architectural coating producers will also see rapid development in the period.

Real estate: By the end of 2016, the area of commercial housing for sale was 695 million m²; the area of residential housing for sale was 40 257m²; the renovation of 6.06 million shanty town houses started in the year; 6.58 million shanty town houses and housing for public rental were built; 1.58 million dangerous houses in poor rural households were renovated. 

Furniture: The main business revenue of the furniture manufacturing sector was RMB 855.95 billion in 2016, up 8.6% year on year; the profit was RMB 53.75 billion, up 7.9% year on year. The main business revenue and the total profit presented an overall rising trend, but the growth rate decreased over the years.

Home appliances: The home appliance sector recovered in 2016 against all odds. Sales of television sets, refrigerators and smart phones grew at about 10%. Gratifying achievements were made in facilities such as new highways (355%), power grid equipment (11.7%) and optical cables (25.6%).

The new compulsory national standard, the Indoor Decoration and Renovation Materials–Limits for Harmful Substances in Interior Wall Coatings, has triggered a new-round survival of the fittest to coatings in market. The new standard is more stringent in limiting harmful substances in waterborne interior wall coatings. Compared to the old standard, some revisions have been made in this new standard:

1.    The item of waterborne wall putties is added and limits of their harmful substances are defined.

2.    The item for the control on the total amount of benzene, toluene, ethyl benzene and xylene is added and the total amount allowed shall be ≤300mg/kg.

3.    Limits for VOCs are lowered greatly. The content of VOCs in waterborne wall coatings shall be ≤120g/l and the content of VOCs in waterborne wall putties shall be ≤15g/kg. The content of VOCs        mentioned here is the total amount of VOCs harmful to human body. Formaldehyde is a substance with high toxicity and already confirmed by the WHO to be a carcinogenic and teratogenic        substance. As solvent-borne wall coatings contain a high content of VOCs, China no longer approved new producers of solvent-borne wall coatings since 2005.

The national standard for China’s coating industry is the Indoor Decoration and Renovation Materials–Limits for Harmful Substances in Interior Wall Coatings, which was issued by the General Administration of Quality Supervision, Inspection and Quarantine in December 2001.

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