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Policy

C&EN In Asia

by Rudy Baum, Editor-in-chief
May 1, 2006 | A version of this story appeared in Volume 84, Issue 18

C &EN and the Synthetic Organic Chemical Manufacturers Association (SOCMA) jointly hosted a reception and dinner in Shanghai in late April. More than 200 people associated with the Chinese chemical industry and with multinational chemical companies doing business in China attended. The event was a follow-up to a reception hosted by C&EN, SOCMA, and the American Chemical Society in Shanghai in April 2005.

SOCMA President Joseph Acker; Benjamin Jones, who directs advertising sales for ACS Publications; and I spoke briefly at the recent event. Nance Dicciani, president and CEO of Honeywell Specialty Materials, delivered the keynote address. All of us emphasized that China is an increasingly vital component of the global chemical enterprise, and that companies like Honeywell Specialty Materials and organizations like ACS and SOCMA increasingly need to engage China to remain prosperous and relevant. That was, in fact, the whole point of the reception and dinner.

"Honeywell is not a new name in China," Dicciani said in her talk. The company has been doing business in China since 1935, she said, and when China opened up its economy in 1983, Honeywell was among the first to set up an office in Beijing.

"Today, Honeywell China is an active participant in the local economy and is represented by more than 20 subsidiaries and joint ventures within China," Dicciani said, with sales of $500 million annually.

Dicciani pointed to "globalization, access to capital, changing dependencies on natural resources, dynamic world labor markets, and varying social and political climates" as exerting major influences on the chemical industry, and she called the growth in the Chinese chemical industry "absolutely staggering." Shipments of chemicals from and within China "more than doubled from 1993 to 2003, from $47 billion to $118 billion," she pointed out. According to Deutsche Bank, she said, Chinese chemical company "revenues hit $151 billion in 2005 and will more than double to $392 billion" by 2015.

"By 2015," Dicciani said, "China is likely to be the second largest manufacturer of chemicals after the U.S., and the Chinese share of the global market is expected to increase from about 8% to 13%."

Dicciani also focused on challenges faced by the chemical industry the world over. The industry, she said, "recognizes that financial performance is critical to its survival. However, it also recognizes and accepts that financial performance alone will not sustain the industry. It must be environmentally responsible as well as a good corporate citizen."

The chemical industry in China is well-positioned to have a global impact, Dicciani observed. "Here in China, there are a number of world-class research institutes and research-oriented universities, and these institutes are fostering science- and technology-based businesses," she said. "Regional innovation clusters are also being set up around the country. R&D spending has been increasing at over 20% a year in the past few years. One measure of R&D output is the number of scientific papers. Since the early 1990s, China's annual output of scientific papers has risen fourfold, now accounting for over 7% of the global total in chemistry."

"It is a great time to be in the chemical industry, and China is an exciting place to be," Dicciani concluded. "There is a special opportunity which the chemical industry in China has-it has the opportunity to avoid the mistakes that Western countries have made concerning economic growth, energy use, and environmental controls."

I couldn't agree more with the comments Dicciani made in Shanghai. As I said at the dinner, C&EN is committed to continuing and expanding its presence in China and its coverage of the Chinese chemical industry as well as basic chemical research in China. That commitment extends to all of Asia, as several recent stories on aspects of the chemical enterprise in India by Hong Kong Bureau Head Jean-François Tremblay and Deputy Assistant Managing Editor Amanda Yarnell attest.

China and India are fast becoming formidable competitors to the U.S., Japanese, and European chemical industries. Some observers lament this development and maintain that advances in the Asian chemical enterprise will inevitably diminish the enterprise in the U.S. I refuse to accept that advancing the global chemical enterprise is a zero-sum activity. The world faces too many pressing scientific and technological challenges that require smart chemists and smart chemical businesses to address for that to be true.

Thanks for reading.

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