China's chemical market continues to attract foreign companies
In 2023, China's economy will rebound and high-quality development will be steadily promoted. China is firmly committed to promoting high-quality development and high-level opening-up, providing new opportunities for foreign-funded enterprises to develop in China and bringing more confidence and impetus to the world economic recovery. Entering 2024, many foreign-funded enterprises and investment banks in China said that China's economy is resilient, has great potential and vitality, and the basic trend of long-term improvement has not changed, and it will continue to become a "sweet spot" for multinational enterprises and investment institutions.
Investing in the Chinese market is a must
On January 4, BASF (China) Co., Ltd. and SHEMAR Industrial Co., Ltd. held a signing ceremony for strategic cooperation. At the ceremony, Wang Bing, executive deputy general manager of SHEMAR Co., Ltd. and executive director of the international trading company, said that the strategic cooperation was a consensus reached by the two sides after in-depth exchanges and full consultation. In the future, SHEMAR and BASF will cooperate more closely, give full play to their respective advantages, respond to market challenges, and jointly create bright development prospects. A week earlier, BASF Shanghai Coatings Co., Ltd. had also invested in a wholly-owned subsidiary, BASF (Shanghai) Coatings Manufacturing Co., Ltd.
BASF's frequent moves are a microcosm of multinational companies investing in China. In 2023, the German specialty chemicals company LANXESS established the LANXESS Asia-Pacific Application Development Center at the Shanghai International Innovation Center for New Chemical Materials to further promote innovation in the Chinese market. Luo Gaoming, the person in charge of LANXESS, said: "LANXESS is honored to be a witness and participant in China's economic development. We are confident in the prospects for China's high-quality economic development. In the future, LANXESS will continue to be based in China, strengthen its localization strategy in China, and drive a sustainable future with innovation. ”
From 2023 to the present, investing in the Chinese market and in-depth cooperation with Chinese enterprises have become a must for multinational enterprises. Executives from multinational companies have visited China intensively, continuing to increase their investment in China and deepen their cultivation of the Chinese market. Saudi Aramco has signed cooperation framework agreements with Rongsheng, Shenghong and Yulong, Linde announced the signing of a series of new strategic cooperation agreements with Wanhua Chemical, Sika China officially signed a strategic cooperation agreement with Wanhua Chemical, Huafon Group signed a strategic cooperation letter of intent with Covestro, and Satellite Chemical and SK Zhixin signed a supplementary agreement with China and South Korea Cree ethylene-ethyl acrylate copolymer Phase II project in Shanghai.
International capital investment banks support China
The Chinese market accounts for a quarter of the total capital market financing. Such a large volume is a natural attraction for international funds. Tian Lihui, dean of the Institute of Financial Development at Nankai University, pointed out that the Chinese market has become increasingly important in global asset allocation, especially during the global economic recovery. In this context, China has also been favored by foreign investment institutions.
The petrochemical industry is a favored industry for foreign investors. Statistics from the third quarterly report of listed companies in 2023 show that more than 550 petroleum and chemical listed companies in China have achieved a total of 8.03 trillion yuan in main revenue. Foreign institutional investors (QFIIs) such as Abu Dhabi Investment Authority, Goldman Sachs International, Kuwait Government Investment Authority, Temasek Fullerton Investment Co., Ltd., and BNP Paribas are bullish on the Chinese market. At present, QFII institutions hold 763 stocks in China, with a total of 9.378 billion shares and a market value of 138.2 billion yuan. Petrochemical companies such as Oriental Shenghong, Oriental Yuhong, Wanhua Chemical, and Satellite Chemical have also become their investment targets.
China's door will open wider and wider
Since 2010, the sales revenue of China's petroleum and chemical industry has ranked second in the world, second only to the United States. Among them, the sales revenue of the chemical industry surpassed that of the United States and became the world's first. At present, foreign capital has become an important part of effective investment in China's chemical industry, an important driving force for technological progress and industrial upgrading, and an important fulcrum for ensuring the stability of the industrial chain and supply chain, as well as stabilizing foreign trade and employment.
Zhang Jianping, deputy director of the Academic Committee of the Ministry of Commerce Research Institute, said that there are two main types of foreign investment entering China, one is market-driven foreign investment aimed at China's large market, and the other is cost-driven foreign investment based in China to build global supply chains and global value chains. In August last year, the State Council issued the "On Further Optimizing the Environment for Foreign Investment". Opinions on Increasing the Intensity of Attracting Foreign Investment", put forward a new batch of highly targeted and high-value policies and measures to stabilize foreign investment, and dredged many "blockages" for foreign-funded enterprises to invest in China in terms of policy guidance. In October last year, at the third Belt and Road Forum for International Cooperation, China once again announced that it would completely lift restrictions on foreign investment in the manufacturing sector.
Against the backdrop of accelerating changes unseen in the world and accelerating the restructuring of the petrochemical industry chain and supply chain, promoting the green transformation of economic development has become a global consensus, and China's economy will continue to be an important driving force for world economic growth. In the future, China's door will open wider and wider, and the focus of opening up will also shift from the opening of factors, markets, and institutions to the steady expansion of rules, regulations, management, standards, and other institutional opening-up.
