In recent years, it has been an indisputable fact that there has been serious overcapacity in the petroleum and chemical industries, especially since 2023. At the research and discussion meeting on the production and operation of key enterprises in the petroleum and chemical industries held on April 2nd, Li Shousheng, the president of the China Petroleum and Chemical Industry Federation (CPCIF), emphasized that the contradiction of structural overcapacity in the industry this year was still very prominent. To effectively resolve the serious overcapacity problem in the industry, accelerating the cultivation of new quality productive forces has become the best solution.

The latest statistics from CPCIF indicate that in addition to the increasing contradiction of overcapacity in traditional bulk basic raw materials, even ethylene, which used to be in short supply, has now raised the alarm for overcapacity. Overcapacity has become a ‘persistent problem’ that restricts the high-quality development of the entire industry. Severe overcapacity means insufficient effective market demand, leading to significant fluctuations in chemical product prices. Structural overcapacity, on the other hand, implies an excess of low-end capacity and a lack of high-end capacity, resulting in either no market for existing products or, even if they are sold, prices being slashed significantly.

Developing new quality productive forces will provide strong support for the new balance between demand-driven supply and supply-created demand. On one hand, new demands place higher requirements on the upgrading of supply, which will drive and stimulate new supply and leverage the leap in productive forces. On the other hand, new supply based on new productive forces can provide more high-quality, high-performance, high-reliability, high-safety, and environmentally friendly products and services, better satisfying and creating effective demand. Therefore, enterprises facing overcapacity should vigorously develop new quality productive forces, completely eliminate backward production capacity, replace it with advanced capacity, and form new supply to guide new demand, thus achieving a high-level dynamic balance between new supply and new demand.