Insecticides China Monthly Report

China sets its 2012 GDP growth target at 7.5%, lowering its economic growth target for the first time after keeping it at around 8% for seven consecutive years, according to a government work report delivered by Premier Wen Jiabao at the parliament's annual session held on 3 March 2012.

The setting of a lower GDP growth rate shows not only the government's consideration to the international economic environment but also its determination to shift focus to quality growth. Premier Wen said that the government will focus on accelerating the transformation of economic development's pattern and making economic development more sustainable and efficient so as to achieve a higher-level and higher-quality development over a long period of time.

What should domestic pesticide industry learn from this policy? Like most industries in China, domestic pesticide industry has been developing quickly in the past years, with capacity and output hitting record highs year after year. Many companies expand their capacity and aim to be the biggest producer of certain generic products. However, they gain more pain than pleasure, facing low operating rate, low profit margin and even loss.

In fact, the government has released some policies related to pesticide industry to guide the M&A, investment in R&D, etc. Although it will be not easy to achieve a higher-level and higher-quality development, China's pesticide industry has to change.