Multinational chemical giants 'high allocation' to the Chinese market

Recently, the heads of many multinational companies said that the Chinese economy has shown strong resilience and has become the engine of world economic growth, providing a solid foundation for the development of multinational companies in China, and further strengthening their confidence and determination to deeply cultivate the Chinese market.

Data from the Ministry of Commerce also confirmed this point. In the first two months of this year, the actual use of foreign capital in the country was 243.7 billion yuan, a year-on-year increase of 37.9%. .

Large-scale investment projects in China

An important reason why multinational corporations continue to increase their confidence in China is that China's economy is very resilient. Since the beginning of this year, a number of economic data in our country have been booming, and economic factors have been continuously accumulating. Multinational companies have seen China's determination to expand opening up, and have also gained confidence in developing in China.

On March 13, the new production complex of BASF Zhanjiang Integrated Base broke ground, including glacial acrylic acid (GAA) units, butyl acrylate (BA) units and 2-ethylhexyl acrylate (2-EHA) units.

On February 23, the German chemical giant Covestro announced that it will invest hundreds of millions of euros in Zhuhai, Guangdong to build its largest thermoplastic polyurethane (TPU) production base. "Through this major investment, we will further expand our presence in China and seize the strong growth momentum of the global TPU market." Lei Huanli, President of Covestro China, said that the new project is expected to contribute to the high-quality development of China and even the entire Asian market. make a contribution.

On February 20, the European Commission announced that it approved the establishment of a joint venture between INEOS and China Petrochemical Corporation in accordance with the EU Merger Regulations. The two parties will jointly build a new 500,000-ton/year high-density polyethylene (HDPE) project in Tianjin according to the 50%:50% equity ratio. At the same time, INEOS will also acquire a 50% stake in the Tianjin Nangang ethylene project. Both projects are expected to be operational by the end of 2023.

In addition, American plant builder ECI recently stated that it will build two 200,000-ton/year ethylene-vinyl acetate (EVA) plants in Qinzhou, Guangxi, China with its technology and sales partner, Spanish petrochemical giant Repsol.

Accelerate the bonus of "Nuggets" industrial upgrading

Another reason why foreign investment in China is more and more deployed and deeply cultivated is that China's industrial transformation and upgrading releases dividends.

On February 24, BASF announced specific measures for the cost reduction plan in Europe, one of which was to shut down multiple chemical plants, because high energy prices dragged down European profitability and competitiveness. Last year, BASF's energy cost expenditure increased by 3.2 billion euros compared with the previous year, and Europe accounted for about 84% of the cost increase, which had the greatest impact on the integrated base in Ludwigshafen. Brudermüller, Chairman of the Executive Board of BASF Group: "Competitiveness in Europe is increasingly affected by excessive regulation, slow and complex licensing processes and, above all, the high cost of most factors of production. All these factors hinder The current high energy prices are still placing an additional burden on European profitability and competitiveness." However, in the face of a challenging market environment, BASF said that its business in China still showed resilience.

Currently, the energy shortage facing Europe is not a short-term phenomenon, and is expected to last for at least a few years. The impact of continuous energy shortage and rising energy prices will affect the normal production activities of enterprises. China's complete industrial chain, huge market size, and relatively low manufacturing cost advantages are hugely attractive to global, especially European companies. Many companies are trying to reduce the impact of global risks by increasing investment in localization in China.

Liu Xiangdong, deputy director of the Economic Research Department of the China International Economic Exchange Center, pointed out that my country has entered a stage of high-quality development, and foreign-funded enterprises still play a leading role in a large number of advanced industries with their excellent teams, leading technologies, and advanced management experience.

In recent years, my country has promulgated and implemented the Foreign Investment Law, implemented national treatment for foreign-funded enterprises, continued to expand market access, carefully ensured service guarantees for foreign-funded enterprises, comprehensively optimized the business environment, strengthened foreign investment confidence, and prompted more and more foreign investors Be optimistic about China and invest in China. On January 1 this year, the "Catalogue of Industries Encouraging Foreign Investment (2022 Edition)" came into effect, which is another great benefit for external funds "coming closer and farther away". Opening up at a high level and working with partners to share high-quality development opportunities is not only the determination and action of China to expand opening up in the new era, but also the "reassurance" and "heart booster" for foreign investment in China.

Investing in China is investing in the future

Recently, many multinational companies have paid close attention to China's two sessions. By observing the two sessions, executives of foreign companies in China said that their investment direction in the Chinese market is clearer.

Gao Yong, Vice President of Public and Government Affairs and Sustainable Development of Bayer China, said: "We have noticed that green and low-carbon development is still an important topic at this year's two sessions. Bayer will continue to move towards the sustainable development goals with concrete actions, and also We will strive to contribute to China's goal of 'dual carbon'. By reducing carbon emissions, protecting water resources and practicing sustainable agriculture, Bayer will continue to help China's green and sustainable development."

In the new year, Procter & Gamble decided to continue investing in the supply chain field in China. "Part of the funds for the 'New Manufacturing 2.0 Plan' have been put in place, and we will then launch the 'Supply Chain 2025 Plan' to further increase the construction of flexible factories and smart logistics in China." Zhou Yuming, vice president of P&G Greater China Supply Chain, said. "It is the rapid development of the Chinese market that makes P&G decision-makers see that it is worthwhile to increase investment in China." Zhou Yuming said.

Rong Jie, Vice President of Henkel Group and President of Henkel Greater China, said that the international community has seen the Chinese government attaches great importance to stable growth during the two sessions, which makes Henkel full of confidence in the steady recovery and further development of the Chinese market this year. The Henkel Electronic Adhesive South China Application Technology Center officially launched last year and Henkel's second largest innovation center in the world with an investment of about 500 million yuan in Shanghai will further strengthen the speed and depth of Henkel's localized innovation and provide assistance to local customers .