“Investments in new plants and new technologies [ . . .] are flooding out of Germany,” said Michael Vassiliadis, chair of Germany’s union for the chemical and energy industries IG BCE, adding that the trend had been accelerated “since the problem with energy”.
The main benefactors, Vassiliadis said, were China and the US, which were offering companies “full packages” that on top of tax incentives include access to green energy and regulatory fast-tracking.
Competition for foreign direct investment is increasing for European countries. Germany last year suffered a record deficit in corporate investments as companies looked overseas, according to the German Economic Institute, which called the situation “alarming”.
Washington last year unveiled large subsidies available for investments in various green technologies under its Inflation Reduction Act, which seeks to attract foreign direct investment in key sectors. China has likewise delved into state coffers to bolster certain industries — one of which remains chemicals, Vassiliadis said.
Beijing, which is struggling with a protracted economic slowdown, is especially welcoming of foreign direct investment in areas involving high technology, such as advanced manufacturing, information technology and scientific research as it seeks to move its industry up the value chain.
Vassiliadis, who in his role as union leader sits on the supervisory board of BASF, said the German chemical group is a striking example of a company investing in state-of-art technology in China.
The world’s largest chemical company is currently building a €10bn petrochemicals complex in Zhanjiang. Modelled on the German group’s headquarters in Ludwigshafen, it will be equipped with “cutting-edge technologies” and the “highest . . . sustainability standards”. The company has meanwhile warned that it will “permanently” downsize its operations in Europe.
_0.jpg?itok=QU87XW8D){kind=tracking}
.jpeg?itok=vCj6bCRe)
