German chemical giant BASF will build a fully own plant in China



The Beijing decision was also made because Germany could be an important ally in the war on duties against the US


A German firm will build a US$10 billion chemical plant in southern China. According to analysts, Beijing’s decision was made to enlist Berlin’s support against Washington and put up a united front against the trade war launched by US President Donald Trump.

The complex would be wholly owned by BASF, the world’s largest chemical firm. The decision to grant Germany the entire ownership of the plant stems from a series of meetings concluded with the meeting between German Chancellor Angela Merkel and Premier Li Keqiang.


The complex could employ 2,000 staff plus 1,000 external contractors


After BASF chief executive Martin Brudermueller and Guangdong vice-governor Lin Shaochun signed the MOU for the chemical plant, Merkel lauded China’s progress in further opening its markets to foreign investment.

“This shows that China’s market opening in these areas isn’t just talk, but action,” Merkel said at a joint news conference with Li. According to analyst, the Beijing decision was taken in hopes of showing the real Chinese openness to foreign investors.


The construction of the BASF complex will be in Zhanjiang, Guangdong province


Tao Jingzhou, a managing partner in Beijing with international law firm Dechert, said: “In the context of a trade war between China and the US, China has to show the world it is committed to market opening. Merkel is a key figure in the world to counterbalance Trump’s unilateralism”.

But between Germany and China there are not only agreements on the chemical giant BASF. The other deals, in fact, involved BMW’s plan to expand production at its China joint venture and Siemens’ aim to develop new gas turbines with China’s State Power Investment Corp.

But the most exciting novelty is definitely the Chinese opening to BASF. Lin Boqiang, director of the Energy Economics Research Centre at Xiamen University in Fujian, said: “The extraordinary thing about the project is that it will be wholly owned by a foreign firm. It’s rare in China’s chemical industry”.



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