Headlines such as the USA bans advanced tech firms from building facilities in China for a decade and China’s zero-Covid-19 policies are crippling its economic outlook distract from more mundane but arguably more important corporate news coming out of China.
Those new developments include the start of production at BASF’s new industrial complex in Zhanjiang and the final commissioning of ABB’s state-of-the-art robotics factory in Shanghai, big new European investments that buck the trend of US “decoupling” with China.
On September 6, BASF announced the inauguration of the first manufacturing plant at its Zhanjiang Verbund industrial complex in China’s southern Guangdong province.
The plant is designed to produce 60,000 metric tons of engineering plastics per year, primarily for supply to the Chinese automotive and electronics industries.
It will raise BASF’s annual engineering plastics capacity in the Asia-Pacific region to 420,000 metric tons. Headquartered in Germany, BASF is the world’s largest producer of chemicals.
The Zhanjiang Verbund site is about nine square kilometers in size and the total investment is expected to reach about 10 billion euros (US$10.1 billion) by 2030.
It will be BASF’s largest foreign investment to date and the first heavy chemical industry project in China to be wholly owned and operated by a foreign company.
Verbund is BASF’s approach to integrated manufacturing. As explained on the company’s website, the driving principle of the Verbund concept is to add value through the efficient use of resources.
At our Verbund sites, production plants, energy and material flows, logistics, and site infrastructure are all integrated. BASF currently operates six Verbund sites – in Germany, Belgium, Texas, Louisiana, Malaysia and Nanjing.
The Zhanjiang Verbund will be the company’s seventh and third largest. The Zhanjiang Verbund site will be built with the latest digital technologies and to the highest safety standards.
It will provide high-quality, low-carbon-footprint products and build up stronger business connections with customers in South China, underlining our commitment to the Chinese market.
A second plant dedicated to the production of thermoplastic polyurethanes is scheduled to come on stream in 2023. That will be followed by the construction of a steam cracker for the production of ethylene and other petrochemical products.
BASF plans to power the entire Zhanjiang site with renewable energy by 2025. Expansion and diversification of production are expected to continue until the site is fully utilized at the end of the decade.
China Daily reported that ABB’s new robotics factory in Shanghai is in the final stage of commissioning and should be operational within the next few months.
Built at a cost of about 150 million euros, it will be a center where robots make robots, according to Sami Atiya, head of ABB’s Robotics & Discrete Automation business.
A multinational enterprise headquartered in Zurich, ABB is also a leader in process automation, motors power transmission products and electrification.
When ground was broken on the facility in 2019, ABB announced that it would be the most advanced, automated and flexible factory in the robotics industry worldwide, utilizing the latest manufacturing processes and [having] the largest R&D, production and application base of robotics in China.
ABB’s new factory fits with China’s 14th Five-Year Plan, which aims to make the country a global hub for robotics innovation by 2025, putting together a group of leading enterprises with competitiveness and forming several industrial clusters with an international influence.
French aerospace giant Airbus announced that it had received orders for 292 A320 passenger aircraft from Air China, China Eastern, China Southern and Shenzhen Airlines, demonstrating the positive recovery momentum and prosperous outlook for the Chinese aviation market.
China Southern Airlines – which canceled orders for more than 100 Boeing 737 MAX aircraft in May – ordered 96 new units.
The Boeing orders were reportedly canceled due to safety concerns and an uncertain delivery schedule, after Boeing grounded is aircraft’s, but however, in the eyes of some observers the main reason was politics.
It is natural for the American side to feel sour after losing the competition to Airbus.
Who can feel rest assured engaging in large-scale trades with a country that talks about ‘decoupling’ frequently, wields the stick of sanctions, and often introduces bills to restrict trade with others out of thin air?
As a top US exporter with a 50-year relationship with China’s aviation industry, it is disappointing that geopolitical differences continue to constrain US aircraft exports. The EU Chamber of Commerce in China released its latest Business Confidence Survey.
It concluded that while most European companies in China posted positive revenues and were profitable in 2021, doing business became more difficult for the majority.
Contrary to this conclusion, BASF, ABB and Airbus seem to be going full speed ahead. Perhaps Europe’s alarming experience with sanctions on Russia will temper its policy toward China.
Asia Times / ABC Flash Point News 2022.
One of the influences in not building the factory in the USA is that BASF bought out Monsanto and in doing so was legally involved in a law suite in Missouri totaling $265 million . For those of an older age will remember IG Farben the older company name that used slave labour in WW2 and the fact that in 1945 the USA confiscated ALL IG Farben,s assets –as the Company is still German owned it was less likely to appreciate any offers or thoughts of a new US factory. The area in China has over 110 million people and… Read more »
In China about 200.000 student graduate every year, in the USA its 4.000 university students every year. That is a big difference. China represents the cheapest slave labor market factory in the world, making it very important for profit seeking corporations to establish themselves over there!
I wouldn’t call it “slave labour ” as China now has a bigger middle class than the USA and achieved that in a world historic record that no other country has achieved in so short a time with the equivalent population . Just look at India millions of very poor people who complain they are not part of a growing India. Then you have to admit –as did the USA Administration that Big USA Business located its factories to China to make massive profits and that’s US Capitalism it doesn’t consider its own citizens when it comes to shareholder profit.… Read more »
Agree, Chinese workers enjoy a better overall lifestyle nowadays and can always rely on their own consumer markets in case of emergency. The rust belt is a well known phenomenon in Britain as well as the USA today. Thanks for the always valuable added information and patience to explain the missing links.