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Over the past few years, China’s methanol production capacity has increased year by year, with output rising steadily from just 2 million tons in 2001 to nearly 5.4 million tons by 2005. But this is not enough to meet the strong domestic demand. In contrast, import volumes have remained relatively stable over the past 5 years, staying above 1.3 million tons, while exports are relatively negligible. Therefore, although the self-sufficiency rate of the product is also increasing, imported methanol still plays a significant role in supplying the domestic market. However, the situation underwent a fundamental change after 2007. Customs data show that in January this year, China’s imports of methanol amounted to less than 15,000 tons, compared to over 130,000 tons in the same period last year, a decrease of nearly 90%. In sharp contrast, export volumes soared from a mere 79 tons to over 90,000 tons, which is almost half of China’s total exports for the entire year of 2006. The import and export situation of methanol in China will reverse. The main reason is that China’s methanol production is increasing significantly. The high efficiency of methanol production and the continuous growing demand for methanol derivatives have driven a new round of capacity expansion for methanol in China. In 2006, domestic methanol production increased from 5.69 million tons in the previous year to 7.62 million tons, a year-on-year increase of 34%, a rate far higher than that of consumption. This increased production **compressed the market share of imported products, resulting in a sharp decline in imports. On the other hand, the rising international methanol prices have also stimulated the export of Chinese products. Internationally, methanol is primarily produced from natural gas, and due to factors such as rising raw material prices, methanol prices in the international market have been increasing since August and September of last year. In China, methanol production primarily uses coal as a raw material, which gives it a price advantage. Currently, the production cost of methanol is between 800 yuan and 1,000 yuan per ton. If coal is used as a raw material, 2.25–2.5 tons of coal are required to produce 1.5–1.6 tons of methanol ； If natural gas is used, 1,500–1,600 cubic meters of natural gas can produce 1.5–1.6 tons of methanol. In terms of return on investment, the profit margin for methanol projects can reach around 30%-40%. The huge profit margins encourage manufacturers to export their products, leading to a gradual increase in export volumes. With this increase and decrease, it is not hard to understand the reversal of the situation. According to statistics provided by the China Petroleum and Chemical Industry Association last year, China’s methanol production is set to continue increasing. Currently, there are 88 methanol projects planned in China, with a production capacity of 48.5 million tons per year. However, of this planned production capacity of nearly 50 million tons per year, less than 20%, or about 9 million tons, has actually been put into construction. This capacity will be gradually brought online in the coming years (with some projects already starting operations), which will not only easily cover the domestic supply and demand gap but also result in a significant surplus. However, these projects generally have downstream facilities, and theoretically, the methanol produced is not the final product. However, these large-scale integrated coal chemical projects are mostly constructed in phases; at present, only the methanol plant in the first phase is in operation. The supporting facilities for the medium to long term have not yet been put in place due to the construction timeline – some remain at the planning stage or exist merely as a pretext to facilitate approval processes. "Distant water cannot quench immediate thirst; therefore, the additional production capacity that will be added in the future will continue to impact and change the existing supply landscape of methanol in the country. As a result, China has become a net exporter of methanol, and this situation will continue in the coming years. Domestic methanol will not only continue to squeeze the market share of imported products and assume a dominant position, but it will also exert an increasingly greater impact on the international market.