Petrochemical General Machinery Must Improve Export Product Structure

Since the start of this year, the petrochemical general machinery industry has seen a significant surge in exports, leading to an expanding trade surplus. However, recent policy changes—such as adjustments to export tax rebates and processing trade regulations—are expected to slow down the growth rate in the second half of the year. Industry insiders emphasize that transforming the export growth model and optimizing product structures have become critical challenges for the sector. The revised export tax rebate policy affects 219 customs tariff classifications for mechanical products, with 22 of them directly impacting the petrochemical general machinery industry, accounting for about 13.2% of its import and export volume. Products with lower tax rebates are typically those with lower technological content and minimal value addition. Although high-tech, high-value products continue to grow in exports, labor-intensive and low-value items such as certain centrifugal pumps, blowers, fans, and valve fittings still make up a large portion of the market. These need urgent restructuring and optimization. Reducing tax rebates will increase production costs for companies, squeezing profit margins and weakening export competitiveness. Some smaller firms may face short-term challenges. According to Zhang Yubao, Secretary-General of the China General Machinery Industry Association, the current policy adjustment has limited impact on the overall industry, but it is more challenging for private small-scale enterprises producing mid-to-low-end equipment. Large and medium-sized companies, on the other hand, mainly focus on large-scale equipment, which is currently exported in smaller quantities. Experts suggest that to mitigate the effects of future policy changes, petrochemical machinery companies should improve management efficiency, reduce production and intermediate costs, and adjust export prices appropriately to offset revenue losses. At the same time, they must accelerate the restructuring of their export product lines, develop products with independent intellectual property, aim for international technical standards, and increase exports of high-tech, high-value goods. This would help avoid situations where export prices fall below domestic levels, potentially triggering anti-dumping measures from importing countries. According to customs data, from January to June this year, the total import and export value of the petrochemical general machinery industry reached $25.983 billion, up 31.88% year-on-year. Exports totaled $16.908 billion, a 45.8% increase, while imports reached $9.074 billion, up 11.97%. The trade surplus stood at $7.834 billion, rising by $4.357 billion. The main contributors to the surplus were petrochemical equipment ($113 million) and oil drilling equipment parts ($315 million).

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