Guotai Haitong: Policies emphasize anti-inner-loop and green transformation, petrochemical industry is expected to usher in new development opportunities.

Guotai Haitong released a research report stating that the government emphasized in its 2026 work goals report the need to deepen the construction of a unified national large market, conduct thorough rectification of "anti-inward competition," and accelerate the comprehensive green transformation to achieve carbon peak and carbon neutrality. This includes coordinating the reduction of carbon emissions, pollution, expansion of green space, and growth to enhance the momentum of green development. The era of simply pursuing capacity expansion in the petrochemical industry has ended. With the deepening rectification of "anti-inward competition" and the acceleration of comprehensive green transformation, small and medium-sized enterprises in the industry that do not meet environmental standards, have high energy consumption, and low technical levels will further see their survival space squeezed, while leading companies are expected to benefit. Guotai Haitong's main points as follows: Premier delivers government work report, continues to set a positive tone and emphasizes efficiency On March 5, 2026, the Fourth Session of the 14th National People's Congress opened in Beijing, with the Premier delivering the government work report. Overall, the report continues to set a positive tone and places more emphasis on efficiency. The 2026 government work report, under the general framework of "seeking progress while maintaining stability and improving quality," continues the understanding of the "five musts" emphasized in the Central Economic Work Conference, stressing the importance of "adhering to both policy support and reform and innovation," "closely integrating investments in goods and investments in people," and "using rigorous internal training to deal with external challenges." Government work report emphasizes deepening the construction of a unified national large market and tackling "anti-inward competition" When discussing the work goals for 2026, the government work report emphasizes the need to deepen the construction of a unified national large market. It calls for the formulation of regulations for the construction of a unified national large market, the deepening of reforms in the bidding and bidding system, strengthening anti-monopoly and anti-unfair competition efforts, enhancing rigid constraints on fair competition reviews, and comprehensively using measures such as production capacity regulation, standards guidance, price enforcement, and quality supervision to tackle "inward competition" and create a favorable market environment. It also calls for the deepening of comprehensive pilot reforms for market-oriented allocation of factors and the inclusion of more eligible areas in the pilot scope. Government work report calls for accelerating the comprehensive green transformation The report emphasizes the need to use carbon peak and carbon neutrality as a guide to coordinate efforts to reduce carbon emissions, pollution, expand green space, and promote growth to enhance the momentum of green development. It calls for the vigorous development of a green and low-carbon economy, the improvement of policies to promote green and low-carbon development, the implementation of actions to improve quality, reduce costs, and cut carbon emissions in key industries, and the advancement of zero-carbon park and factory construction. It also proposes the establishment of a national low-carbon transformation fund to foster new growth points in hydrogen energy, green fuels, and other areas. Efforts will be made to effectively control projects with high energy consumption and emissions, accelerate the elimination of outdated production capacity, and support the innovative application of green and low-carbon technologies and equipment. The report also calls for the improvement of resource management and comprehensive conservation systems to enhance the recycling of renewable resources. Efforts will be actively and prudently made to achieve carbon peak and carbon neutrality, including the implementation of a dual control system for total carbon emissions and intensity, the improvement of carbon emissions accounting and carbon footprint management systems, and the further expansion of the coverage of the carbon emission trading market. The petrochemical industry is expected to usher in new development opportunities The era of simply pursuing capacity expansion in the petrochemical industry has ended. With the deepening rectification of "anti-inward competition" and the acceleration of comprehensive green transformation, small and medium-sized enterprises in the industry that do not meet environmental standards, have high energy consumption, and low technical levels will further see their survival space squeezed, with policy resources more focused on leading companies with technological strength and scale advantages. Additionally, there may be increased efforts to address shortcomings in the supply chain. The demand for independently controllable high-end materials in areas such as electronic chemicals is becoming more urgent, and there may be policy support and capital investment in these areas in the future. Risk warning: significant fluctuations in crude oil prices; policy outcomes falling below expectations, among others.