China Remains a Focus to Chemical  Multinationals
                                  By Wu Wei
Although the unexpected Asian financial crisis has  compelled  some  projects
chemical multinationals are planning to set up in the region to be postponed
or down-sized, some American and European oil companies having raw  material
advantages and some chemical companies having competitiveness in  downstream
products are still vying each other in getting the leading position  in  the
oil and chemical sectors in Asia. In their strategic readjustment  with  the
feature of concentrating on advantageous sectors and  expanding  operational
scale, China has at all times been a hot spot  for  investment,   trade  and
cooperation.
It is reported that 70% of the leading 25 largest oil and chemical  companies
in the world have made investment in China.   In  the  total  investment  in
China's chemical industry during the Eighth Five-year Plan period, the state
investment only accounted for 20%, the foreign capital accounted for 31% and
the fund raised by local governments  and  enterprises  accounted  for  49%.
Foreign capital has become an  important  capital  source  in  the  domestic
chemical construction. American and European chemical  companies  have  been
active in making investment in China's chemical industry. Chemical  projects
with foreign investment have made progress in both number and capacity.
BASF is the biggest investor in China's chemical industry. Its investment has
already reached 1 billion marks and 10 joint venture enterprises  have  been
  established.   Besides  Nanjing  integrated  petrochemical  base  with   an
investment of 5 billion marks, a polyurethane raw material project  with  an
investment of 450 million marks in Shanghai Caojing (partners including  ICI
Polyurethane Co. of the United Kingdom and Polyurethane Co.  of  Japan)   is
also in execution. BASF and Du Pont have also decided to put  an  investment
of around 900 million U.S. dollars to set up a joint venture to produce  and
market nylon intermediates, and  the  project  will  be  located  in  Hainan
Dongfang. The sales revenue of BASF in China exceeded 1.1 billion  marks  in
1997.
Du Pont of the United States, No. 1 chemical giant in the world, has made  an
investment of over 300 million U.S. dollars in China. At the  end  of  March
this year, Premier Zhu Rongji met Mr. Charles Holliday,  the  president  and
CEO of Du Pont. Du Pont will further increase its investment in China  to  1
billion U.S. dollars in 2000.
Bayer of Germany achieved a sales revenue of over 1 billion marks in China in
1997 for the first time in history. In the past 8 years  the  annual  growth
rate of the sales revenue in China has been  maintained  at  13%,   and  the
growth rate was 15% in 1997. Joint ventures newly established by Bayer  have
made the major contribution to the growth. Bayer has constructed 15 projects
in China, and 6 of them have been completed and put into operation.
The chemical industry is a capital and technology- intensive  sector.   Using
foreign capital and introducing advanced technology is an effective  measure
in speeding up the development of the domestic chemical  industry.   In  the
recent years, China has loosened its control on foreign capital introduction
. Foreign companies are encouraged to  make  investment  in  the  sectors  of
chemical mines, chemical fertilizers,   pesticides,   organic  chemical  raw
materials, inorganic chemical raw  materials,   synthetic  materials,   fine
chemicals, rubber processing and chemical machinery. Projects  of  over  600
000 t/a ethylene, PVC resin, nylon 6 and  nylon  66  new  varieties,   large
ammonia and 10  000  t/a  sodium  cyanide  are  included  in  the  "List  of
Production Sectors, Products and Technologies with Development  Priority  of
the State" approved by the State Council for trial implementation from Jan. 1,
1998.
According to the development program, the total  amount  of  foreign  capital
utilized in the chemical industry will reach 12 billion U.S. dollars by 2000
, and its proportion in the total investment  will  reach  around  17%.   100
export-oriented chemical enterprises will be formed.   While  improving  the
economic performance and increasing the market  share,   the  total  foreign
trade volume of chemical industry will  reach over 40 billion U.S.   dollars
in 2000, and of the total the export volume  will  reach  20  billion  U. S.
dollars.