Policies strongly support the innovative development of the fine chemicals industry, fostering industrial chain extension, supplementation, and strengthening.

Recently, nine departments, including the Ministry of Industry and Information Technology and the National Development and Reform Commission, jointly issued the “Implementation Plan for Innovative Development of the Fine Chemical Industry (2024–2027),” which will guide the fine chemical industry toward high-end, green, and intelligent development, thereby laying a solid foundation for advancing new‑type industrialization and building a manufacturing powerhouse.

The Implementation Plan sets forth that by 2027, China will cultivate more than five world-class enterprises with strong innovation leadership and integrated collaborative capabilities, foster over 500 specialized, refined, distinctive, and innovative “Little Giant” enterprises, and establish more than 20 chemical industrial parks led by the fine chemicals sector and endowed with robust competitive advantages. It also calls on local authorities to focus on extending, supplementing, and strengthening the value chains of their pillar industries, develop distinctive industrial clusters, and build an industrial landscape characterized by complementary strengths.

The industry ranks first globally in size.

Fine chemicals typically refer to specialty chemicals and new chemical materials, encompassing sectors such as pharmaceuticals, agrochemicals, dyes, coatings, pigments, and food and feed additives. Experts note that fine chemical processes are characterized by high technological barriers and strong industrial linkages, making this one of the most dynamic and rapidly evolving segments of today’s chemical industry.

China’s fine chemicals industry enjoys distinct advantages. In terms of scale, the sector—excluding pharmaceuticals—accounts for nearly 50% of global revenue, maintaining its top position for many years. It is capable of producing over 30,000 types of fine chemicals, with China ranking first worldwide in the output of pesticides, dyes, coatings, pigments, and food and feed additives. From a supply-chain perspective, leading enterprises have established strong competitiveness in areas such as polyurethanes and fluorochemicals, while more than a thousand specialized, refined, distinctive, and innovative “little giant” firms are deeply engaged in niche markets. Moreover, over 400 chemical industrial parks have positioned fine chemicals as their core industries, giving rise to a number of regionally distinctive fine‑chemical industry clusters.

Li Bin, Vice President of the China Petroleum and Chemical Industry Federation, stated that fine chemicals represent a highly integrated, technology‑intensive industry and are among the most dynamic sectors in today’s chemical industry. Vigorously developing the fine chemicals sector has become a strategic priority for countries worldwide as they restructure their chemical industries and advance toward higher‑end, value‑added production.

Experts note that the fine chemicals industry currently faces several challenges that hinder its high-quality development, including low levels of R&D investment by enterprises, an inadequate technological and equipment base, insufficient capacity to supply high-end products, mounting safety and environmental pressures, and inadequate coordination between upstream and downstream sectors. At present, China’s fine chemical products are predominantly concentrated in the mid- and low‑end segments, with a heavy reliance on raw‑material‑based and general‑purpose offerings. Meanwhile, the supply of high‑end products—such as advanced research reagents, high‑performance catalysts, specialty surfactants, and high‑performance resins—remains limited. The fine chemicals sector urgently needs to focus on the strategic demands of key industrial chains and supply networks, pursue chain extension and strengthening, intensify efforts to overcome technological bottlenecks, address critical gaps in the industrial chain, and enhance the competitiveness of its core strengths.

Promote industrial chain extension, supplementation, and strengthening.

In response to the aforementioned issues, the Implementation Plan proposes three measures: first, to extend and strengthen the industrial chains of traditional sectors; second, to accelerate breakthroughs in key products; and third, to enhance the quality of flagship products. The plan calls for advancing the “Three‑Product” initiative in industries with comparative advantages—such as coatings, dyes, and fluorosilicone organic materials—while vigorously promoting service‑oriented manufacturing to deliver customized, functional, specialized, and product‑line‑based offerings and services.

Data show that, at present, less than 50% of China’s fine‑chemical enterprises have relocated to industrial parks. In some chemical parks, the leading industries lack distinct competitive advantages, and linkages among firms within the parks—along both value chains and supply chains—are weak, resulting in severe homogeneous competition. Consequently, these parks have failed to fully leverage their potential to foster inter‑firm collaboration, promote industrial coupling, and drive cost reductions and efficiency gains. Moreover, the sector’s geographic distribution is heavily skewed toward the east, with coastal provinces dominating, while the central and western regions exhibit a relatively weak fine‑chemical industry base, leading to uneven regional development.

To accelerate the improvement of development quality in chemical industrial parks, systematically guide industrial relocation, and promote regional division of labor, cooperation, and coordinated development, the Implementation Plan specifies that activities such as matchmaking for chemical industry relocation will be organized to help localities strategically plan the extension of fine‑chemical value chains, foster the establishment of specialized fine‑chemical industry clusters, and create a development pattern in which the eastern, central, and western regions each boast distinctive features and complementary strengths.

Focus on key priorities to extend, supplement, and strengthen industrial chains. The Implementation Plan calls for developing a portfolio of high-end products, achieving breakthroughs in critical technologies, and enhancing the competitiveness of flagship offerings; promoting advanced technologies that are green, safe, and intelligent; and establishing a number of industrial parks distinguished by their leading industries and superior resource efficiency. Strengthen coordination to optimize the innovation system and industrial layout. Establish specialized innovation platforms for fine chemicals to refine the innovation ecosystem; bolster leading enterprises while nurturing small and medium-sized firms to invigorate collaborative innovation; and guide localities to concentrate on extending, supplementing, and reinforcing their pillar industries, fostering distinctive industrial clusters and shaping an industrial landscape characterized by complementary strengths.

Source: China Securities Journal