Opportunities, Challenges, and Trends in China’s Agrochemical Industry in 2020: Insights from the Central Economic Work Conference

Release Date:

2020-01-03

As the year draws to a close, the Central Economic Work Conference was held in Beijing from December 10 to 12, 2019. The conference reviewed the economic performance of 2019, assessed the current economic situation, and laid out plans for economic work in 2020.

This year’s Central Economic Work Conference emphasized the need to maintain unwavering focus on agricultural production. This is a crucial measure for effectively safeguarding national food security and securing victory in the battle against poverty. Agriculture and agricultural inputs such as pesticides are inextricably linked, mutually reinforcing and mutually influential; thus, maintaining rigorous attention to agricultural production will inevitably present both opportunities and challenges for the pesticide industry. A thorough understanding of the spirit of this year’s Central Economic Work Conference will be of great significance for successfully carrying out all aspects of the agrochemical sector’s work this year.

I. The Impact of the Central Economic Work Conference on the Development of China’s Agrochemical Industry in 2020

1. The Central Economic Work Conference will usher in opportunities for the comprehensive development of the agrochemical industry.

The Central Economic Work Conference designated “unwaveringly strengthening agricultural production” as one of the key tasks for 2020, and outlined specific measures to boost China’s agriculture and ensure food security, including “intensifying efforts to safeguard supply through agricultural production, accelerating supply-side structural reform in agriculture, and driving rural income growth and rural revitalization.” These initiatives reflect new thinking and new principles in China’s agricultural development and are expected to have a profound impact on the country’s pesticide industry.

China is a major agricultural country, and pesticides, as an essential input for agricultural production, play a crucial role in the country’s agricultural development. The Central Economic Work Conference emphasized “unwaveringly prioritizing agricultural production,” underscoring the high level of attention paid to agricultural development and food production. Consequently, agricultural production in 2020 will usher in new opportunities for growth. The expansion of agriculture will, in turn, stimulate demand for agricultural inputs such as pesticides and fertilizers, while various policies aimed at improving farmers’ livelihoods will further boost their incomes and purchasing power. All these factors will contribute to the comprehensive development of China’s pesticide industry, enhance both the domestic consumption environment and the broader external business climate, and support the long-term sustainable growth of the sector.

2. As an industry that benefits farmers, the agrochemical sector is bound to reap the rewards of the Central Economic Work Conference and achieve sound development within a favorable policy environment.

China is a major agricultural country, and agriculture forms the foundation of the national economy; however, its per capita arable land is far below the global average. Improving agricultural productivity, safeguarding the agricultural ecological environment, and increasing farmers’ incomes are all closely linked to the development of the pesticide industry.

China faces a wide array of plant diseases, insect pests, and weed infestations, with complex conditions that can lead to widespread damage. According to statistics, the country has 742 plant diseases, 838 insect (and mite) pests, 704 weed species, and 20 rodent pests; among these, more than 100 pose severe threats to crop production. Thanks to the judicious use of pesticides, many common diseases, pests, and weeds have been effectively controlled. In certain agricultural regions, the pesticide industry has played a pivotal role in promoting local agricultural development and ensuring food security. Each year, it helps prevent losses of 58 million tons of grain, 1.5 million tons of cotton, 2.3 million tons of oilseeds, 50 million tons of vegetables, and 6 million tons of fruit. Analysis indicates that for every yuan invested in pesticides, agriculture generates returns of 6 to 10 yuan.

It is evident that pesticides are one of the most important and effective tools for plant protection, serving as a vital foundation for safeguarding agricultural production in China. In the current context—marked by accelerated urbanization and the relaxation of the two‑child policy—and amid trends such as a growing population coupled with shrinking arable land, rising pest and disease pressures, labor shortages in rural areas, and the rapid transfer of land use rights—the pesticide industry will continue to shoulder formidable responsibilities and play a pivotal role in advancing agriculture and ensuring national food security. The pesticide industry is closely intertwined with agricultural development and food‑security efforts; as an agro‑friendly sector, it is poised to benefit from the guidance of the Central Economic Work Conference and to achieve robust growth within a favorable policy environment.

3. The new concepts and requirements put forward at the Central Economic Work Conference will pose challenges to the development of the agrochemical industry.

The Central Economic Work Conference emphasized that, in the new era, pursuing development requires steadfastly implementing the new development philosophy of innovation, coordination, green development, openness, and shared benefits, and advancing high-quality development. These new requirements and principles will pose fresh challenges to the agrochemical industry.

As is well known, the development of China’s agrochemical industry is influenced by numerous objective and subjective factors, with the market being the most critical. The market itself comprises multiple components; internally, the supply‑demand relationship stands out as the primary driver, with the supply side playing a pivotal role. Additionally, external market conditions and other factors further shape the landscape. Together, these elements exert a decisive influence on the growth of the agrochemical sector.

In 2020, the environment for the development of China’s pesticide industry was far from favorable. We must clearly recognize that global economic growth continues to slow and remains in a period of profound adjustment following the international financial crisis; the trend of accelerating and intensifying major global transformations has become increasingly pronounced, with a marked increase in sources of instability and risk factors worldwide. This year, the world economy will continue to face instability and uncertainty, with new drivers of growth remaining unclear. Moreover, there is considerable uncertainty regarding the direction of monetary policies among major economies, the evolving patterns of trade and investment, and the trends in commodity prices.

All of these issues warrant our close attention. Domestically, China is currently in a critical phase of transforming its development model, optimizing its economic structure, and shifting to new drivers of growth. Structural, institutional, and cyclical challenges are intertwined, the combined effects of the “three overlapping periods” continue to deepen, and downward pressure on the economy is mounting. Under these circumstances, the agrochemical industry will also face new challenges in 2020. For instance, the tension between slowing economic growth and relative overcapacity has intensified; enterprises grapple with rising production and operating costs alongside insufficient innovation capacity; potential risks persist in the area of workplace safety; and the conflict between agrochemical development and resource‑environmental constraints remains pronounced. These contradictions and problems are bound to shape the trajectory of the agrochemical sector in 2020. To counteract downward economic pressures and advance high‑quality economic development, we must draw fresh insights from the new development philosophy.

II. Forecast of Development Trends in China’s Agrochemical Industry for 2020

1. The pace of optimizing the industrial structure will accelerate, and innovation-driven upgrading will become the dominant theme in the development of the agricultural pharmaceutical industry in 2020.

The Central Economic Work Conference stated that China is currently in a critical phase of transforming its development model, optimizing its economic structure, and shifting to new drivers of growth. Structural, institutional, and cyclical issues are intertwined, the combined effects of the “three overlapping periods” continue to deepen, and downward pressure on the economy is mounting. How should we respond? The only answer is high-quality development.

The Central Economic Work Conference identified the vigorous promotion of high-quality development as a key task for 2020, calling for increased investment in equipment upgrades and technological transformation to drive the optimization and upgrading of traditional manufacturing. Meanwhile, China’s pesticide industry is dominated by generic production, with relatively backward formulation technologies, widespread product homogenization, and weak capabilities in new‑product R&D. Its technological progress and innovation capacity remain in need of strengthening, and insufficient funding for technological upgrading continues to undermine the long-term growth potential of enterprises. Overall, China’s pesticide sector lags significantly in terms of technology, equipment, and management standards, with many pressing technical challenges yet to be resolved.

Meanwhile, overcapacity has long been a persistent problem in China’s agrochemical industry. In recent years, pesticide manufacturers have rushed to invest in promising product lines, and indiscriminate expansion has become widespread. As a result, many mainstream products—particularly active ingredients—are now oversupplied, forcing companies to export at low prices. Experience has shown that overcapacity ultimately leads to adverse consequences: it not only severely constrains corporate earnings growth but also, through redundant infrastructure development, causes serious environmental pollution and resource waste—clearly running counter to the goal of high-quality development.

The key to the healthy development of any industry lies in whether its structure is rational. From the perspective of the overall product mix, the agrochemical sector faces a situation where active ingredients are strong while formulated products remain weak; most companies continue to compete at a low‑level, and product homogenization remains widespread, with speculative hype still rampant. To achieve high‑quality development that respects economic laws, delivers quality and efficiency, and ensures sustainability, China must deepen strategic adjustments to its industrial structure. Moreover, as the structure of the planting sector continues to optimize, it is imperative to accelerate the restructuring of the agrochemical industry to align with these changes. To this end, we must fully leverage market‑driven mechanisms, make resolving overcapacity a central priority, and, in accordance with the classification criteria set forth in the “Catalogue (2019 Edition)” — namely, the newly revised and issued “Guidance Catalogue for Industrial Structure Adjustment (2019 Edition)” — increase financial support for encouraged projects, promptly upgrade existing facilities and production processes subject to restrictions, optimize the allocation of existing resources, and expand the supply of high‑quality new capacity. Furthermore, vigorously adjusting the industrial structure requires a strong focus on innovation‑driven development and unwavering implementation of the central government’s decisions and arrangements for addressing overcapacity.

The Central Economic Work Conference also called for vigorously developing strategic emerging industries, accelerating the growth of various service sectors, and promoting the optimization and upgrading of traditional industries; it emphasized creating an enabling environment to ensure that enterprises truly become the main drivers of innovation, while the government should strengthen intellectual property protection and refine tax policies that encourage corporate innovation. For the pesticide industry in 2020, transforming its development model, adjusting its structure, integrating resources, and speeding up technological advancement represent the fundamental path forward. Elevating the industry means shifting the focus from pursuing higher growth rates to making greater efforts to enhance quality and efficiency and to bolster the capacity for sustainable, high‑quality development. By taking the enhancement of value added as a key breakthrough, the industry should transition its development paradigm from quantitative expansion toward quality improvement and efficiency gains. To achieve substantive progress this year in optimizing and upgrading the pesticide industry’s structure, it is essential to vigorously refine industrial, organizational, and product structures; to robustly develop the digital economy; to leverage information and advanced intelligent technologies to modernize and upgrade manufacturing; to improve product quality and increase value added; and to propel producer services toward greater specialization and higher positions in the value chain. Through digitalization, intelligentization, and informatization, the industry can be elevated, its structural composition rendered more rational, and a cohort of leading enterprises—possessing independent intellectual property rights, well‑known brands, and strong international competitiveness—can be cultivated.

The Central Economic Work Conference once again emphasized the need to adhere to the guiding principle of consolidating, strengthening, upgrading, and ensuring smooth circulation, with innovation-driven development and reform and opening-up serving as the two key engines, so as to comprehensively enhance the overall competitiveness of the economy and accelerate the building of a modernized economic system. The conference also called for deepening reforms of the science and technology management system, speeding up the transformation and application of scientific and technological achievements, bolstering enterprises’ capacity for technological innovation, giving full play to the positive role of state-owned enterprises in technological innovation, improving institutional mechanisms that encourage and support basic research and original innovation, and refining systems for identifying, cultivating, and incentivizing scientific and technological talent.

To this end, enterprises must steadfastly regard scientific and technological progress and innovation as the central pillar of transformation and upgrading, focusing on breaking through key core technologies that constrain the modernization of the agrochemical industry. They should vigorously promote the commercialization of agricultural‑chemical R&D成果, widely adopt advanced manufacturing systems—such as automation, digitalization, networking, and intelligent technologies—and support technological upgrades and continuous innovation within agrochemical firms. At the same time, they should establish and refine a market‑oriented, enterprise‑driven innovation system that integrates industry, academia, research, and application. Domestically, agrochemical companies should shift from mere capacity expansion to a model driven by R&D and marketing innovation, pursuing product differentiation to ensure survival through distinctive offerings. By enhancing their innovative capabilities and raising the technological content of their products, they can avoid cutthroat competition based on homogeneity and gain a competitive edge. It is essential to strengthen new drivers of innovation‑led development, leverage entrepreneurial talent, accelerate scientific and technological breakthroughs, and intensify innovation in products, branding, industrial organization, and business models. Such efforts will effectively facilitate the transition of new agrochemical products and technologies from the laboratory to the field, while also bolstering the agricultural extension system and the development of socialized agricultural services. To raise agricultural productivity on limited per‑capita arable land, protect the agricultural ecological environment, increase farmers’ incomes, and meet growing demand for food, fiber, oilseeds, and other agricultural commodities, we must sustain agricultural production and significantly reinforce the plant protection system. Agrochemicals are indispensable inputs for strengthening plant protection and advancing agriculture.

It is foreseeable that, in the future, China’s pesticide industry will continue to achieve new breakthroughs in fostering harmonious plant protection, advancing green and digital agriculture, and ensuring the safety of China’s agricultural products.

2. Green pesticides are poised to enter a period of rapid growth, with biopesticides enjoying significant room for development; efficient, safe, cost-effective, and environmentally friendly pesticides will become the primary direction of pesticide development by 2020.

The Central Economic Work Conference emphasized the need to strengthen pollution prevention and ecological conservation, and to accelerate the transition toward a green development model. Unswervingly implementing the new development philosophy, promoting green growth, and continuously enhancing the quality and efficiency of development have become the overarching direction for industrial progress. For agriculture, advancing agricultural production serves the goal of food security; however, the food‑security strategy extends beyond merely ensuring immediate “staple‑food security.” It places greater emphasis on sustainable development, transforming the mode of agricultural growth, and fostering water‑efficient and circular farming—approaches that embody the principles of sustainability. At present, China’s irrigation coverage stands at 40 percent, far below the 80 percent or higher levels seen in developed countries, resulting in substantial waste of water resources.

Experts point out that, during an era when grain production has been prioritized, China has achieved sustained increases in grain output—but at the same time, these gains have come at an environmental cost. The Central Economic Work Conference emphasized the need to wage a tough battle against pollution, maintaining unwavering commitment and sustained intensity in safeguarding clean air, clear water, and uncontaminated soil. This calls for targeted measures addressing the root causes and specific characteristics of air, water, and soil pollution, with close attention to pressing issues and critical links. It also requires coordinated efforts to promote high-quality economic development and high-level ecological protection, placing greater emphasis on source‑level prevention and green development, accelerating the establishment and improvement of an ecological governance system, and enhancing the systematic and scientific nature of governance. Therefore, only by ensuring ecological security through this decisive fight against pollution can China’s food security be effectively and reliably secured—thus setting a clear direction for the development of China’s agrochemical industry: to advance the production of efficient, safe, economical, and environmentally friendly pesticides.

According to statistics, China’s grain production currently uses pesticides at a per-hectare rate higher than the global average, yet the actual utilization rate remains below 30 percent. The same holds true for chemical fertilizers; unabsorbed residues of these inputs have led to severe soil contamination. Coupled with the paramount importance now attached to food and agricultural product safety, ensuring the safety of agricultural production—particularly that of agricultural products—has become the most critical issue in contemporary agricultural development. In this context, biopesticides have played a pivotal role in accelerating the renewal and upgrading of pesticide formulations, enhancing the quality of agricultural products, safeguarding their safety, boosting agricultural exports, and contributing to increased farmer incomes and greater agricultural efficiency.

According to consultations with experts from relevant agricultural departments, biopesticides remain highly popular in many parts of Jiaodong, Shandong Province. In counties and cities that export agricultural products, the promotion of biopesticides is given top priority. Beyond fruits and vegetables, more than 30 types of agricultural commodities are produced using biopesticides, all of which have obtained pollution‑free certification and meet Japanese and EU standards, enjoying strong sales both domestically and internationally. Furthermore, for economic crops such as traditional Chinese medicinal herbs, tea, and peanuts, the adoption of biopesticides has led to smooth market access and robust production–sales dynamics, emerging as a new driver of income growth for local farmers. The author predicts that, under the nation’s proactive policies promoting ecological agriculture, high‑efficiency, safe, cost‑effective, and environmentally friendly pesticides will become the primary direction of pesticide development by 2020.

3. The degree of openness in the pesticide sector will increase, and pesticide exports are expected to outperform this year; however, challenges remain significant, and risks persist.

Since 2019, the ebb and flow of the U.S.–China trade war has significantly impacted China’s pesticide sector in the global market. With regard to China’s pesticide exports, the U.S.–China trade dispute has exerted a notable influence. According to the latest published export data, the first half of 2019 saw a challenging outlook for China’s pesticide trade: export volume increased by only 1.9% year on year, totaling 737,200 metric tons. Meanwhile, the total value of China’s pesticide imports and exports reached a new high of US$4.473 billion, yet the growth rate was just 2.4%, far below the 8.3% recorded in 2018. Specifically, pesticide exports amounted to US$4.178 billion, up by a modest 2.6%. Unilateral protectionism has inflicted substantial damage on global economic development; the outlook for the world economy remains subject to downside risks, and U.S.–China trade tensions persist.

Under these circumstances, China’s pesticide exports are bound to be affected, and the outlook for the future is far from optimistic. However, as a major global producer of pesticides, China has seen domestic demand decline following the implementation of the policy to achieve “zero growth” in the use of pesticides and fertilizers. With overcapacity in domestic pesticide production, two-thirds of output will continue to rely on exports. Meanwhile, amid an uncertain U.S.–China trade dispute and a generally subdued export environment, the pressure on China’s pesticide industry—two-thirds of whose products depend on overseas sales—remains substantial.

Against this backdrop, the Central Economic Work Conference emphasized that opening-up should continue to advance on a broader scale, across wider sectors, and at a deeper level; it called for strengthening the promotion and protection of foreign investment and further reducing the negative list for foreign investment. These three “greater” commitments require us to intensify efforts in areas such as spatial planning, market access, and the business environment, thereby continuing to drive a new round of high‑level opening-up. The conference also underscored the need to pursue higher‑standard opening-up, maintain steady growth in foreign trade, stabilize and expand the utilization of foreign capital, and make solid progress in jointly building the Belt and Road Initiative—providing clear guidance for the internationalization of China’s agrochemical industry.

In 2020, the state will further refine its tax policies—such as adjusting VAT rates and expediting export tax rebates—optimize the business environment at ports, and comprehensively expand opening-up, thereby creating new opportunities for pesticide exports. With a focus on developing new growth drivers in foreign trade, including countries along the Belt and Road, demand for pesticides is rising in Pakistan, the Philippines, Cambodia, Bangladesh, Myanmar, Thailand, Vietnam, and other markets, while international cooperation and exchanges with China in this sector are steadily deepening. These developments represent fresh export prospects, and stepping up efforts to boost pesticide exports to these countries is undoubtedly a sound strategy.

For a long time, the United States has been China’s largest export destination. However, pesticide import and export enterprises should not “put all their eggs in one basket”; they must broaden their horizons, actively engage in international multilateral cooperation, stabilize the growth rate of pesticide exports, and mitigate the impact of Sino‑U.S. trade tensions. It is essential to enhance the precision and effectiveness of market development, spare no effort to consolidate traditional markets while vigorously exploring emerging ones, and promptly adjust market strategies. For countries and regions that previously faced high tariff barriers but possess substantial latent market potential, concerted efforts should be mobilized to achieve breakthroughs. We must closely monitor the international economic landscape, particularly the evolution of the Sino‑U.S. trade dispute, promptly assess how domestic and global environmental changes affect China’s imports and exports, conduct comprehensive analyses of both long-term trends and short-term fluctuations, and, in light of domestic macroeconomic policy needs, proactively formulate response measures to strive for expanded pesticide exports.

For agrochemical exporters, it is essential to align with prevailing market trends, proactively mitigate the pressure of rising costs through diverse channels, enhance export competitiveness, and strengthen their bargaining power in pricing—particularly by undertaking concrete efforts to develop new products, tap into emerging markets, and manage exchange-rate risks. Moreover, well‑capitalized agrochemical firms can leverage the Belt and Road Initiative to expand overseas, engage in industry‑wide mergers and restructurings, and further propel China’s agrochemical sector onto the global stage, thereby ensuring the smooth advancement of China’s agrochemical exports in 2020.

4. In 2020, the overall outlook for the agrochemical industry and its market remains positive. Although the broad trend is a decline in pesticide usage, both supply and demand are expected to improve, with particular emphasis on the gradual enhancement of supply quality.

The Central Economic Work Conference called for accelerating the reform of state-owned assets and enterprises and promoting the optimization and adjustment of the layout of state capital. It emphasized improving the property rights system and market-based allocation of production factors, strengthening the rule-of-law environment to support the development of the private sector, and refining the policy framework for the growth of small and medium-sized enterprises. The conference also called for reforming land‑use planning and management, deepening fiscal and tax system reforms, speeding up financial‑system reform, improving the fundamental systems of the capital market, enhancing the quality of listed companies, and establishing sound exit mechanisms. Furthermore, it urged steady progress in the reforms of the ChiNext and the New Third Board, guiding large banks to shift their service focus downward, encouraging medium‑ and small‑sized banks to concentrate on their core businesses, deepening the reform of rural credit cooperatives, and steering insurance companies back to their primary role of providing risk protection.

The Central Economic Work Conference further emphasized the need to deepen supply-side structural reform in the financial sector, unblock the transmission mechanism of monetary policy, expand medium- and long-term financing for the manufacturing industry, and better address the difficulties and high costs of financing faced by private enterprises and small, medium, and micro-sized businesses. It also called for fully implementing tax and fee reduction policies, lowering costs related to electricity, gas, and logistics, ensuring these measures are effectively put into practice, and focusing on invigorating market vitality. These steps will create a favorable market environment for the agrochemical industry and its stakeholders; while demand may remain stable or experience only modest changes, the quality of supply is expected to improve significantly. “Unrelentingly prioritizing agricultural production” underscores the Central Economic Work Conference’s strong commitment to agriculture. Continued high-level attention to the sector, coupled with supportive policies—potentially supplemented by even more favorable measures—will effectively encourage farmers and large-scale growers to invest in agriculture, thereby boosting demand for agrochemicals and providing robust market prospects for the development of China’s agrochemical industry in 2020.

The Central Economic Work Conference emphasized the need to ensure that the poverty‑alleviation campaign is completed on schedule and in its entirety. Winning this battle is a bottom‑line task for building a moderately prosperous society in all respects. By the end of 2019, more than 90 percent of China’s impoverished counties are expected to have been lifted out of poverty, and roughly 95 percent of the rural poor are projected to have escaped poverty, marking the entry into a critical phase of comprehensive closure. Strengthening policy support, improving infrastructure, and steadily advancing industry‑based poverty alleviation will help lift the remaining poor out of poverty. Undoubtedly, achieving victory in the fight against poverty will create a favorable environment and new opportunities for the development of the agrochemical industry.

As is well known, a country’s agricultural policies significantly influence farmers’ motivation to engage in agricultural production and, consequently, shape the development of its pesticide industry. Since 2007, China has introduced a series of preferential policies to promote agriculture, including exemption from the agricultural tax, grain‑production subsidies, high‑quality seed subsidies, and subsidies for purchasing large agricultural machinery, all of which have effectively boosted farmers’ enthusiasm for farming. In the summer of 2019, another bumper harvest was recorded: according to the National Bureau of Statistics, total grain output reached 1.3277 trillion jin, up 11.9 billion jin from 2018 and 4.5 billion jin above the record level set in 2017. The sustained increase in China’s grain production over many years can largely be attributed to favorable policy measures; however, we must also recognize the underlying risks. In recent years, global food crises have emerged, with many regions facing food shortages, and China is no exception in confronting food‑security challenges. Despite consecutive increases in output, supply and demand remain tightly balanced, meaning that such growth cannot fundamentally alleviate the pressure on grain supply and demand in a populous country like China. This looming crisis has prompted the government to place heightened emphasis on national food security and agricultural development. At any given level of scientific and technological advancement, there are inherent limits to increasing grain yields—limits that become even more pronounced when policy effects begin to wane.

Driven by concerns over grain supply following consecutive years of increases, the 2019 Central Economic Work Conference placed “unwaveringly strengthening agricultural production” among the key priorities for 2020. This underscores the need to continue reinforcing agriculture’s foundational role and ensuring the supply of agricultural products, particularly staple commodities such as grain. To effectively safeguard national food security, it is essential to take advancing supply-side structural reform in agriculture as the central task: stabilizing and optimizing grain production, continuously adjusting the crop‑planting structure, vigorously promoting green development, and fostering high‑quality growth in the planting sector. At the same time, we must enhance overall agricultural productivity, strictly protect arable land, vigorously develop farmland water‑conservation and irrigation infrastructure, strengthen science‑and‑technology services, steadily upgrade agricultural material and technological equipment, and ensure a sustained decline in pesticide use while maintaining positive growth in their utilization efficiency. Furthermore, we should prioritize farmers as the main actors in developing a new type of agricultural management system, consistently refine policies that strengthen agriculture, benefit farmers, and enrich rural areas, and fully protect and stimulate farmers’ enthusiasm for production and business, so that farming and grain cultivation remain profitable, avoid losses, and deliver tangible benefits.

These policies represent the strongest support for farmers engaged in grain production, increasing investment in agricultural infrastructure and technological services while reducing operating costs—effectively amplifying the impact of various direct subsidies. Coupled with the continued implementation of subsidies for grain cultivation, high‑quality seeds, agricultural machinery purchases, and comprehensive agricultural inputs, as well as government policies on minimum grain purchase prices and land‑transfer arrangements, they will undoubtedly serve as the fundamental driving force behind agricultural development in 2020. Moreover, proactively yet prudently advancing urbanization and steadily facilitating the urbanization of rural migrants will further stimulate the transfer of rural land, the emergence of large-scale farming operations, diverse agricultural cooperatives, and integrated rural complexes.

All of these factors have laid the groundwork for the sound development of China’s agriculture and the stability of grain production in 2020, while also providing strong support for the growth of the country’s agrochemical industry. Despite maintaining a policy of negative growth in pesticide use, total demand in 2020 remained broadly stable; meanwhile, the quality of supply will see a significant improvement, and the supply‑demand structure will be refined. Products such as pesticide adjuvants, seed coatings, plant growth regulators, insecticides, and fungicides are expected to perform strongly in the market, with specialized formulations for minor specialty crops and plant growth regulators emerging as key market highlights.

III. Conclusion

In short, the Central Economic Work Conference, which set the tone for 2020, provided clear guidance for advancing all economic tasks throughout the year. The measures outlined at the conference will significantly boost the development of China’s agriculture in 2020, while several policy initiatives will foster the growth of the agrochemical industry and improve the market environment. As 2020 marks both the year when China completes the building of a moderately prosperous society in all respects and the final year of the 13th Five-Year Plan, it is of paramount importance to deliver strong economic performance in order to achieve the first centenary goal and lay a solid foundation for the 14th Five-Year Plan and the second centenary goal. At the same time, this year is pivotal for implementing the decisions of the Fourth Plenary Session of the 19th CPC Central Committee, winning the three critical battles, and deepening supply-side structural reform across the board—tasks that are both significant and demanding.

The year 2020 marked the fifth year of the 13th Five-Year Plan, a critical period for fully achieving its objectives, and it was also a pivotal year for deepening reforms across all sectors in China. In 2020, agricultural and rural economic development faced both significant opportunities and numerous challenges. The external environment for agriculture has grown increasingly uncertain; in grain production, farmers contend with “two highs and two uncertainties”—high baseline yields and high production costs, coupled with uncertainty in market prices and climatic conditions—making the task of maintaining stable grain output particularly daunting. Meanwhile, pest and disease pressures have been mounting year after year: wheat stem base rot, apple anthracnose and leaf blight, citrus canker and viral diseases, as well as the fall armyworm, the two-spotted armyworm, and various soil-borne pests and diseases, are all on the rise. The severity of these outbreaks is escalating, posing a substantial threat to the yields of key crops such as wheat, rice, and maize.

Accordingly, in 2020 the agrochemical industry faced both opportunities and challenges.