Shubao Sun: CCPIA always tries to assist government efforts to advance intellectual property rights (IPR) protection Photo: CCPIA

The general secretary of the CCPIA is a “regulations” man. Starting his career in the agrochemical division of the China Petroleum and Chemistry Commission in 1990, he worked on pesticide policy issues in various capacities and was the main drafter of the Chinese pesticide management regulations.

Shubao Sun also happens to be an optimistic man. He is quite upbeat about the strength of the Chinese pesticide sector. With its high growth rate in an “underperforming” global economy, the Chinese agrochemical industry achieved sales of around $5,000million in 2007 and has overtaken Japan to take the third spot in the global rankings.

Agrochemical exports have also been on the rise and touched $1,350 million in 2007. China exports agrochemicals to Asia, Europe, North and South America, with important country markets including Thailand, Indonesia, Pakistan, Vietnam, the Ukraine, Belgium, Brazil, Colombia and the US.

Notwithstanding the optimism, Mr Sun is a somewhat worried man. Infringement of patented products has been a prickly issue for the Chinese industry as it ensures that some Chinese companies are in the news for all the wrong reasons.

Mr Sun explains that China introduced patent protection in 1993 with the revision of the Patent Law. Although he feels that implementation of the law is “generally good” and there are no flagrant violations, he concedes that the size of the Chinese industry, comprising more than 1,800 enterprises, poses a policing problem. Some smaller companies exporting lower quality and patent infringing products create difficulties for the whole industry.

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Mr Sun says that the CCPIA, which is an association of 450 comparatively larger producers, always tries to assist government efforts to advance intellectual property rights (IPR) protection. But he advocates that the focus of efforts should be on efficient supervision rather than on complicating the regulatory framework. He says that in recent years, the Chinese government has focused on more stringent requirements for registration documents, new production site permits and environmentally-benign production.

The CCPIA recognises the importance of these measures, but advocates better supervision through greater enforcement of punishment for: use or sale of counterfeit products; unlicensed production; and IPR infringement, as well as management of pesticide application among end-users to avoid use of illegal products. Otherwise, feels Mr Sun, enhancing regulatory requirements only sets blocks to enterprises that are obeying rules, and spurs enterprises to resort to “underground” production.

the basics of accelerated growth
The IPR problems notwithstanding, the Chinese agrochemical industry has experienced robust growth and figures high on the growth plans of most multinationals. Mr Sun attributes part of the growth to attractive business conditions in China as a result of preferential policies towards foreign investors. A second factor is the establishment of an integrated pesticide production system in eastern China around the Yangtze delta, which incorporates the supply of raw materials, intermediates, adjuvants, equipment and packing materials.

Another key reason for China's success is the fact that its industry has played a key role in lowering costs. He cites the example of the insecticide, imidacloprid which cost Yuan2.5 million ($357,000) per tonne of active ingredient when it was first launched on the global market, but now costs less than Yuan200,000 ($28,500) per tonne ai. The price for the insecticide, abamectin, has fallen from Yuan 20 million ($2.9 million) per tonne ai to Yuan 800,000-900,000 ($115,000-130,000) per tonne ai, while the price for the insecticide, cyhalothrin, has fallen from Yuan 2.4 million ($340,000) per tonne ai to Yuan 190,000 ($27,000) per tonne ai.

is it just about the price?
Mr Sun stresses that research and development has become increasingly important in China. Since the early 1990s, two pesticide R&D centres have been created in the country. The centre in the north comprises the Shenyang Research Institute of Chemical Industry (SYRICI) and Nankai University. The second centre is in the south and comprises four bases in Shanghai, Jiangsu, Zhejiang and Hunan....

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