Multinational chemical giants continue to increase investment in China

On October 21, German Chancellor Scholz announced after the EU summit that he would lead a delegation of German companies to China
early next month.
European media pointed out that Scholz is the first EU leader
to visit China since November 2019.
Just the day before, the 2022 Sino-German Economic Cooperation Forum and the Sino-German (Changzhou) Innovation Industrial Park Promotion Conference were held in
Frankfurt, Germany.
Zhu Weige, Economic and Commercial Consul of the Chinese Consulate General in Frankfurt, said that the bilateral trade volume between China and Germany reached 245 billion euros in 2021, and China has become Germany's most important trading partner
for six consecutive years.
He said that at present, more than 5,000 German companies are developing
in China.
By the end of 2021, German direct investment in China amounted to more than 90 billion euros
.
At the same time, there are more than 3,000 Chinese companies
in Germany.
At present, German direct investment in China continues to increase
.

In the past two years, whether it is the economic changes brought about by the spread of the epidemic or the escalation of the geopolitical conflict between Russia and Ukraine, Europe has fallen into a "cold winter", and the energy and chemical industry is facing a huge test of life and death, which has affected the investment plans
of multinational chemical enterprises.
In this context, many multinational chemical giants continue to be optimistic about the Chinese market and have begun to increase project investment
in China.

Among multinational chemical enterprises, German chemical enterprises are the most active
in investing in China.
On October 11, BASF plans to invest in a new world-class neopentyl glycol (NPG) plant with an annual output of 80,000 tons at the BASF Guangdong Verbund site, which is expected to start production
in the fourth quarter of 2025.
On September 15, after more than four years of difficult progress, BASF Group of Germany and China Chemical Engineering Group signed a construction partnership framework agreement in Zhanjiang, Guangdong Province to jointly promote the construction of
BASF (Guangdong) Verbund site project.
BASF Group's investment in Zhanjiang, Guangdong Province totals €10 billion in the BASF Verbund site, making it the largest outbound investment
in BASF's history.
When started, Zhanjiang, Guangdong will become BASF's third largest integrated production site
in the world.

Other German companies are also actively investing
.
Only recently, Covestro invested tens of millions of euros in two new plants at the Verbund site in Shanghai, producing waterborne polyurethane dispersions (PUDs) and elastomers
.
The new PUD plant and accompanying resin production line will be completed in 2024, and the new elastomer plant is expected to be operational
in 2023.
Evonik announces the upgrade of its R&D site in the Xinzhuang Industrial Park in Shanghai and the official name change to Evonik Innovation Park
Shanghai.
After the upgrade, the Shanghai Innovation Park will integrate
basic research, product development, process development, pilot plant, application technology, testing and analysis services and venture capital activities.
Merck's first organic LCD coating material production base in China was completed and put into operation
in Jinqiao, Pudong, Shanghai.

Among other European companies, Switzerland-based Clariant announced on October 20 that it will invest an additional CHF 40 million in its Exolit OP halogen-free flame retardant plant in Daya Bay to build a second production line
.
The CHF 60 million plant is currently under full construction and Clariant aims to start production in Daya Bay around mid-2023 and the second production line will be operational
in 2024 according to the original schedule.
INEOS signed a series of agreements
with PetroChina and Sinopec.
The agreements involve assets with a total capacity of 7 million tons per year valued at nearly $7 billion, including the establishment of a 50:50 joint venture to produce acrylonitrile-butadiene-styrene copolymer (ABS)
using its unique technology.
AkzoNobel announced the official start of construction of its decorative paint East China logistics base in Songjiang, Shanghai, which will be officially opened in June 2023
.
With an investment of about 75 million yuan, the logistics base is located in Shanghai Songjiang Decorative Paint Factory and is expected to become AkzoNobel's largest logistics base
in China after completion.
PPG Coatings (Zhangjiagang) Co.
, Ltd.
, a wholly-owned subsidiary of PPG in China, is scheduled to complete the third phase of the
project in April next year.
With a total investment of 75 million US dollars and an area of 174 acres, the project will form an annual production capacity
of 145,000 tons of high-performance coatings and 5,000 tons of polyvinyl chloride (PVC) sealant.

In recent years, China's door to opening up has become wider and wider, and the business environment has become better and better
.
The implementation of the Foreign Investment Law of the People's Republic of China, as well as many important measures of openness such as free trade zones and CIIE, all reflect China's determination to become a new highland
for scientific research innovation and business environment.
China accounts for 40% of the global chemical market, and promoting high-level opening up is not only a need for China's development, but also for the development of the world
.
In recent years, the rapid growth of demand for high-end chemicals, especially new materials, is far greater than the increase in supply, and it is logical for foreign investment in China to lay out chemical deep processing production lines
.

In addition to European companies, Asahi Kasei, headquartered in Japan, announced on October 11 that it has decided to expand production capacity by introducing high-precision extruders at its resin compound manufacturing plant in Changshu, Jiangsu Province, and has decided to increase strategic investments
in its functional materials business.
South Korean chemical company SK Chemical said it was buying a 10 percent stake
in Chinese polyester waste recycler Shuye Environmental Protection Company for 23 billion won.
Mitsubishi Chemical (China) Management Co.
, Ltd.
signed a contract with the Administrative Committee of Suzhou High-tech Zone to set up a Mitsubishi Chemical Shared Service Center in the zone to intensively manage its business
in China.

At the same time, large Wall Street banks such as Goldman Sachs, JPMorgan Chase & Co.
and other well-known investment companies have recently spoken out, highlighting the attractiveness of China's equity assets
.
A number of executives and well-known investors of foreign-funded institutions have expressed their willingness to become long-term investors in China, and they will develop steadily in the Chinese market towards long-term goals
.