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Investment flows as trade deal with China is signed

2 Western chemical makers announce plans for engineering polymer plants

by Hepeng Jia, special to C&EN
January 16, 2020 | A version of this story appeared in Volume 98, Issue 3


A photo of shoe manufacturing in China.
Credit: Yuan He/FeatureChina/Newscom
Demand for polymers used to manufacture shoes and other consumer goods is spurring investment in China.

Ahead of the signing of a US-China trade deal, two foreign polymer makers announced large investments in China. Although the moves weren’t prompted by the trade pact, experts say the greater protection of foreign technology it promises will help spur more investment in polymers and specialty chemicals.

On Jan. 15, the US and China signed an agreement under which China promised to buy an additional $200 billion worth of US goods and services over the next 2 years, including $50 billion in petroleum and chemical products, while increasing protection of US technology and further opening its financial and service sectors.

In the days before the signing, Ineos Styrolution announced plans to build an acrylonitrile-butadiene-styrene (ABS) polymer plant in the eastern Chinese province of Zhejiang. The facility, to be completed in 2023 at a cost of $800 million, will have an ABS capacity of 600,000 metric tons per year.

Meanwhile, Victrex said it will spend more than $40 million to form a joint venture with Chinese partners in Liaoning Province that will make up to 1,500 metric tons per years of polyether ether ketone (PEEK) engineering polymers by 2022.

ABS’s light weight and moldability make it an ideal material to produce auto, household, and consumer goods. PEEK is used to fabricate items used in demanding engineering applications.

“These investments are not direct results of the China-US trade deal but primarily attracted by China’s upgraded demand for specialty chemicals,” says Ye Yingmin, president of the Beijing-based consulting firm Chem1. Yet Ye does say that the deal’s promise of a more open Chinese market and stronger protection of foreign intellectual property rights will entice more Western chemical makers to set up plants in China.

The high-tech demands of growing sectors such as electric vehicles will also generate new demand in China for high-end chemicals and polymers, Ye predicts.

Even before the trade deal, China was opening its market. For example, a law that took effect Jan. 1 bans any attempt to forcibly transfer technologies of foreign investors to their local partners or other Chinese companies.



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