Right after their visit to multinational chemical companies like BASF, Solvay, Eastman and Wacker in Shanghai in the middle of July, Chemical Industry Parks Working Committee of China Petroleum and Chemical Industry Federation (CPCIP) paid another visit to three other multinational chemical companies in Shanghai on September 16th and 17th. They had a deep discussion with leaders of companies like Lanxess, Celanese Corp and Cabot Corp and talked about what the current economic situation is like and if investment opportunities are available for foreign companies.
On September 16th, members of the Committee interviewed Lanxess Chemical China Co,.LTD and exchanged ideas with Mr. Qian Mingcheng, president of Lanxess Chemical Greater China, and Dr. Hu Dongqi, a member of Executive Committee of Lanxess. Mr.Qian said both Chinese and global economy are on the decline, but he himself and Lanxess still thought highly of China’s future economic development. He also expressed that China still remains one of the major investment destination in the coming years. During the talk at Lanxess, its product structures in China and the world was explained in detail, so we knew that except the common chemical products like rubber, paint and leather chemicals, Lanxess is also the producer of insect repellents , ion exchange resin, fungicides, preservatives, chemical additives, root and corrosion inhibitor. Nowadays, water standard in China has been improved because water pollution is getting worse and water resource is getting scarcer, which will bring more demands for water treatment products because of the increasing requirement for them. Therefore, liquid purification products like ion exchange resin and reverse osmosis membrane will become one of the major investment fields for Lanxess in the near future. However, whether the current policy is stable becomes a key factor for our choice in investment siting in the future.
On September 17th, the Working Committee went and visit Celanese (China) Investment Company,. LTD. Dr. Kevin Wu, general manager of Celanese Greater China said, with reference to the actual situation in his own company, he was concerned about the current economic situation in China. Considering the problems hindering the development of Chinese chemical industry, he believes that the common and essential issue for Chinese chemical industry is its over capacity and poor quality, especially for bulk chemicals , which forms a big hindrance to the development of Chinese chemical industry if these problems can not be solved properly.
In addition, another common problem for Chinese chemical industry is its serious environmental issue. As far as environmental protection is concerned, Dr. Wu mentioned t fair competition. Foreign chemical companies have put more energy and money in pollutant disposal, hazardous chemical substance management, environmental protection and so on, which is sure to bring an intangible increase in production cost. The implementation of relevant policies made by the government produces a higher cost of compliance and lower illegal cost for foreign companies than for local firms. In the long run, the unfair competition is bound to make foreign companies be less motivated to invest in China. In addition to this, Dr. Wu still said because of the increasing logistic and human cost in China, the attractiveness resulted from the preference in land use and tax has been greatly weakened, so he did not think China was an ideal destination to invest any longer.
Besides Lanxess and Celanese, the Committee still went to the head office of Cabot Corp Asia Pacific. Mr. Jeff Zhu, president of Cabot Asia Pacific, said the current economic recession is worldwide and he also predicted that the severity of a new round economic crisis would be higher than that of in 2008. But even so, the investment climate is pretty good in China because of its huge market capacity and adequate human resources, which could offer a perfect base for investment. Zhu Ji expressed that if localization management could be carried out, the fusion/integration of home market could be hastened subsequently and thus efficiency would be lifted and additional value created. Meanwhile, he still pointed out that brand value and product quality deserve our attention in the course of company development.