Recently, the Ministry of Industry and Information Technology of the People’s Republic of China (“MIIT”) issued the Document on Not Accepting the Application of New Pesticide Manufacturers of 2015 (2nd Batch), which points out that China has become an important pesticide manufacturing country and there are currently a lot of pesticide manufacturers most of which are small and scattered. According to relevant regulations and requirements specified in the Pesticide Industry Policy and the “Twelfth Five-year” Development Planning of the Pesticide Industry, and following relevant spirit of the central government on effectively resolving the conflict of excess capacity, in principle, relevant departments will not accept application of new pesticide manufacturers and should encourage merging and reorganization and elimination of the backward to improve industry concentration; therefore, applications for registration of new pesticide manufacturers will not be accepted, according to the Document.

The wording that “Applications of new pesticide manufacturers will not be accepted any more in principle” had been widely spread in the industry for some time, but it was the first time to bring it to the document. The document proclaimed in writing by the MIIT has shown the effort and determination of the central government to resolve the conflict of excess capacity in the pesticide industry. Merging and reorganization, eliminating backward capacity and improving industry concentration will be the irreversible development trend of the industry.