According to a report in China Daily on January 27, 2026
Despite global uncertainty and rising geopolitical risks, multinational chemical companies are deepening their engagement with China, betting on resilient industrial demand, clearer policy communication and the country’s central role in the global energy transition.
The Association of International Chemical Manufacturers (AICM), which represents leading multinational chemical producers operating in China, has stepped up cooperation with Chinese authorities in a move that signals continued long-term commitment from foreign investors in the sector.
Earlier this month, the Shanghai-based industry body signed a strategic cooperation agreement with the Investment Promotion Agency of China’s Ministry of Commerce. The framework aims to institutionalize policy dialogue and improve industrial matchmaking for foreign-invested chemical companies, including the establishment of regular CEO-level forums with multinational executives.
For foreign companies navigating an increasingly complex operating environment, access to clear and predictable policymaking has become as critical as market size itself.
“Direct, timely and transparent policy communication is the most important foundation for long-term investment decisions,” said Xia Fuliang, chairman of AICM, in an interview with China Daily. “Such mechanisms significantly strengthen the confidence of multinational companies in China.”
China’s structural weight in global chemicals
China now accounts for roughly 42 percent of global chemical output, a share that industry estimates suggest could approach 50 percent by 2030. For multinational producers, the country is no longer simply a low-cost manufacturing base, but a core market with deep structural demand across advanced manufacturing, energy transition and healthcare.
Founded in 1988, AICM has witnessed China’s chemical sector evolve from fragmented production into large-scale, integrated and increasingly low-carbon industrial clusters. Its members span Europe, North America, Asia and the Middle East, including global leaders such as BASF, Evonik, ExxonMobil and SABIC.
Xia, who also heads Evonik’s China operations, said China’s chemical demand is increasingly driven by downstream industries such as electric vehicles, renewable energy, pharmaceuticals and high-end equipment — sectors that rely heavily on specialty and performance materials.
“The chemical industry is not a sunset industry in China,” he said. “It is an essential enabler of the green transition and advanced manufacturing.”
From price competition to technology-led investment
Multinational chemical companies are also recalibrating their China strategies. Rather than competing primarily on price, many are shifting toward higher value-added production, bringing advanced technologies, proprietary processes and global supply-chain integration into their China operations.
Major ongoing investments underline that trend. ExxonMobil is building a large-scale petrochemical complex in Guangdong province; SABIC is expanding its footprint in Fujian; and Evonik is investing in specialty chemicals projects in Jiangsu and Sichuan.
These projects suggest that, despite geopolitical tensions and concerns about overcapacity in some industrial sectors, foreign chemical producers continue to see China as indispensable — both as a demand center and as a base for serving global markets.
Green transition as opportunity, not constraint
AICM revised its mission statement in 2025 to reflect changes in China’s industrial and regulatory environment, placing greater emphasis on innovation, sustainability and production safety.
Xia argued that climate targets and environmental regulations, often viewed as constraints, are in fact creating new growth opportunities for the chemical sector.
Materials used in photovoltaic panels, batteries, energy-efficient buildings and lightweight vehicles are all chemically intensive. As China pushes toward its “dual carbon” goals of peaking emissions before 2030 and achieving carbon neutrality by 2060, demand for advanced chemical materials is expected to expand further.
At the same time, multinational companies are accelerating the adoption of digital tools in China, including smart manufacturing systems, data-driven safety management and AI-assisted research and development.
A test case for foreign investment confidence
While China’s broader foreign investment landscape has faced scrutiny amid slowing economic growth and regulatory adjustments, the chemical industry stands out for its relative resilience.
Industry executives say the sector’s long investment cycles, capital intensity and deep integration with China’s industrial ecosystem make short-term exits impractical — and long-term engagement rational.
“The chemical industry operates on a multi-decade horizon,” Xia said. “What matters most is whether the policy environment supports stable, high-quality development.”
For multinational chemical companies, China remains both the world’s largest market and one of its most important testing grounds for green and digital industrial transformation — a combination that few global economies can match.