Market Trends of Packaging Industry in China
This section covers the major market trends shaping the China Packaging Market according to our research experts:
Plastic Packaging is Expected to Witness a Slow Growth Owing to Ban on Plastics
- Plastics are one of the most preferred raw materials in packaging due to their performance, cost-effectiveness, and durability. Some of the commonly used polymers are polypropylene (PP), polyethylene (PE), polyethylene terephthalate (PET), polyvinyl chloride (PVC), and biaxial-oriented polypropylene (BOPP).
- Plastic packaging is prominently used in the food and beverage sector, from airtight wraps to shelf-stable bottles and containers. Plastics have driven innovations in packaging design in the food and beverage industry. For instance, modified atmosphere packaging helps preserve food freshness by capturing the reduced-oxygen air mixture in the plastic package. These advanced and intelligent packaging techniques play a critical role in ensuring the product's integrity while also drastically increasing its shelf life.
- However, plastic packaging must comply with strict regulatory requirements, particularly for the food, beverage, pharmaceutical, and drug-packaging sectors. For instance, the Government of China formulated many laws and regulations to protect foods and beverages from the adverse effects of packaging materials. Packaging companies must comply with these laws and certification policies, increasing their operational difficulties.
- Also, allergen labeling in China for pre-packaged foods would become mandatory under new plans revealed by the Chinese National Health Commission (NHC). The NHC has released draft GB7718 (General Rules for the Labelling of Pre-Packaged Foods) for public consultation, which proposes amending the labeling standard to better protect consumers from exposure to potentially false or misleading information.
- A new focus on the safety of the food supply chain in China during the spread of COVID-19 may increase demand for flexible plastic packaging in the country. The COVID-19 outbreak is reportedly thought to have started at a wholesale seafood and meat market in Wuhan. Thus, such markets in the future can be a breeding ground for the spread of animal-borne diseases.
- Further, China is significantly involved in producing considerable quantities of plastics, aiding in generating revenues from trade exports, thereby creating significant production capacities for various packaging companies. According to ITC, in 2021, China exported plastics and articles valued at about USD 131.07 billion, a 36% rise in exports from the previous year (2020), valued at around USD 96.38 billion.
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Food and Beverage Industry to Hold the Largest Share
- The increase in the number of middle-class people has increased the demand for imported food products. This, along with high purchasing power, is driving the growth of the packaging industry in the region.
- According to the Department of Agriculture and Water Resources of Australia, China is constrained by its limited and degrading agricultural resources, which have raised concerns about the country's ability to meet the increasing demand for food supply from domestic production.
- Henceforth, it would be imperative for the government to look for options, such as the import of food items, which would require sustainable packaging that would protect the product from any damage and degradation. This, in turn, would boost the packaging industry in the region.
- The government's initiatives against food safety procedures and food scandals have led to the revision of the existing Food Safety Law, which would drive the packaging industry in the region to look for better options in terms of packaging materials.
- For instance, Article 1 of the revised Food Safety Law aims at securing food safety and ensuring public health and life safety, while Article 2 specifies the applicable parties. One of which is the production and distribution of packaging materials, containers, detergents, and disinfectants used for food and of tools and equipment used for food production and distribution.
- Furthermore, the beverages market is also witnessing significant growth in the country. For instance, in 2021, as per ITC data, imported beverages, spirits, and vinegar in China were recorded as USD 6.609 billion, a 30% rise in imports from the previous year (2020) valued at around USD 5.080 million.
