Given the high risks associated with partnerships—especially general partnerships—why do people still choose to establish them?

2. Facilitates risk isolation. In a partnership, only the General Partner (GP)—the party responsible for day-to-day operations (i.e., the 'high-risk' position referred to in the question)—bears unlimited joint and several liability for the partnership’s debts. Limited Partners (LPs), who contribute capital only, bear liability limited to their capital contributions, thereby insulating LPs from additional joint liability. 3. Partnership agreements offer strong flexibility and broad scope for autonomous stipulation. For instance, matters reflecting the 'personal nature' of partnerships—such as agreement effectiveness, transfer of partnership interests, and admission of new partners—require unanimous consent of all partners. Meanwhile, profit distribution and loss allocation methods may be freely agreed upon in the partnership agreement. Moreover, unless explicitly prohibited by the agreement, partners are generally not subject to non-compete restrictions. 4. Partnerships facilitate entry into and exit from equity positions. Equity interests registered with the industrial and commercial authorities carry public notice effect; yet for operational changes, different types of partners can be placed into separate partnership entities, enabling differentiated partnership agreements to specify share purchase prices, shareholding conditions, and exit mechanisms. 5. Tax optimization considerations exist—but policy changes must be closely monitored. First, the partnership itself is not subject to corporate income tax; however, individual partners remain liable for taxation. Conceptually, one may view the partnership as a 'shell': income flows through it to the partners, who are the actual taxpayers—the tax obligation is no different from receiving income directly. Under earlier practice, if a partner was an individual, transferring partnership interests was treated as 'property transfer income', subject to a flat 20% personal income tax rate. Currently, income earned by individuals acting as LPs is increasingly classified as 'business operation income', taxed progressively at rates ranging from 5% to 35%. Additionally, past strategies leveraging regional tax incentives—such as fiscal rebates (e.g., 80% of locally retained tax revenue) offered in Xinjiang or Tibet—have become increasingly unviable due to policy instability.

According to forecasts by global authoritative institutions, is the era of supply-demand rebalancing imminent amid the ongoing wave of capacity shutdowns in the chemical industry?

If all permanently shuttered production capacity plans already launched by multinational corporations are fully implemented, global chemical industry capacity utilization will peak as early as 2028—marking the onset of a new phase for the global chemical market. Structural adjustment in the chemical industry is accelerating. Over the past three years, volatile global energy prices, geopolitical tensions, and slowing demand growth have jointly squeezed corporate profit margins—compelling the chemical industry to reassess its capacity layout. According to publicly available information, globally announced ethylene capacity shutdown plans for 2025–2028 total as much as 7.8 million tons per year. South Korea alone plans to shut down 2.7–3.7 million tons/year of ethylene capacity. Meanwhile, approximately 10.5 million tons/year of newly planned capacity faces significant risk of delay or cancellation. Taken together, the withdrawal of existing capacity and uncertainty surrounding new capacity further reinforce expectations of tightening supply. China’s ethylene capacity faces immense transformational pressure. As a pivotal global chemical market, any capacity dynamics in China exert far-reaching influence. Ahmed specifically noted that China operates four ethane-cracking facilities dependent on U.S. ethane imports, with a combined capacity of 3.7 million tons/year—these face substantial shutdown risk due to prolonged, extremely high U.S.-China tariffs. Additionally, China’s 11 million tons/year mixed-feedstock ethylene capacity would see annual output reduced by 1.7 million tons if propane supply is interrupted and naphtha substituted as feedstock. China is currently advancing policies to optimize and integrate outdated capacity—potentially phasing out 6.1 million tons/year of aging, small-scale units—further intensifying future global supply pressures. If all these plans materialize, the supply-demand landscape will inevitably be reshaped. Should all announced shutdowns indeed be implemented—totaling 29.8 million tons/year of ethylene capacity between 2024 and 2029—the compound annual growth rate (CAGR) of global ethylene capacity would decline to just 0.8%. Consequently, global ethylene capacity utilization would surpass 90% as early as 2028, ushering the market into a 'tight equilibrium' era.

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