Why are global chemical giants intensively increasing their investments in China? The answer lies in a report released by China’s National Development and Reform Commission (NDRC).

This is BASF, the German chemical giant, making its largest single investment ever in Zhanjiang, Guangdong Province, China. In March this year, this integrated site—covering 4 square kilometers—was fully commissioned. Eighteen production units and 32 production lines began simultaneous operations, marking China’s first large-scale heavy-chemical project established solely by a foreign investor. BASF is not alone. Since last year, global chemical giants—including Covestro, Arkema, and Saudi Aramco—have successively announced expansions or new projects in China, with investment scales routinely reaching tens or even hundreds of billions of RMB. Against the backdrop of sluggish global economic recovery, intensifying geopolitical conflicts, and profound restructuring of the global chemical industry, why are global chemical giants intensively increasing their investments in China? On May 8, China’s National Development and Reform Commission (NDRC) officially released the *China Business Environment Development Report (2026)*. This authoritative annual report—led by the NDRC and jointly compiled by over 20 government departments—uses a series of authoritative data and vivid case studies to substantiate the marked progress achieved in continuously optimizing China’s business environment and deepening institutional opening-up. This provides the most compelling explanation for why global chemical giants are intensively increasing their investments in China. Currently, the global chemical industry is undergoing profound regional restructuring. On one side, Europe is witnessing industrial relocation due to energy crises and high carbon taxes; North America’s investment pace has slowed under protectionist policies and labor union barriers. On the other side, the Chinese market remains highly attractive to global chemical giants, with investment density and intensity repeatedly hitting record highs. As the world’s largest chemical enterprise, BASF’s moves carry strong “barometer” significance. The total investment in BASF’s Zhanjiang integrated base amounts to €8.7 billion—its third-largest production base globally—covering the full industrial chain from crude oil processing to high-end chemicals. It is capable of producing 1.8 million tons of ethylene annually, along with various downstream chemical products, with projected annual sales exceeding RMB 30 billion. Beyond the Zhanjiang base, in March 2025, BASF announced an expansion of polyester and polyurethane resin production lines at its Caojing site in Shanghai, and plans to further optimize processes and expand capacity in 2026. In March 2026, BASF made another strategic move: establishing BASF Agricultural Technology (Shanghai) Co., Ltd. in China to deepen its presence in the domestic market. Similarly, Germany-based Covestro and Evonik Industries are also continuously ramping up their investments in China. Covestro, a global leader in polymer materials manufacturing, completed the expansion of its TDI (toluene diisocyanate) production capacity at its Shanghai base in early 2026—from 310,000 tons to 370,000 tons—making it the world’s largest TDI production base. Evonik Industries Group, a major global specialty chemicals company, has jointly built—with Fujia Tongda Chemical Co., Ltd.—a 20,000-ton specialty-grade hydrogen peroxide project, which was completed this year and has entered trial production. Commercial supply of the first batch of products is expected in Q2 this year. French specialty chemicals producer Arkema has targeted the new-energy sector, stepping up its layout in China’s lithium-ion battery new-materials space. In March 2026, Arkema announced a 20% expansion of PVDF (polyvinylidene fluoride) production capacity at its Changshu, Suzhou base, scheduled to come online in 2028—making it one of the world’s key PVDF production bases. Saudi capital—representing Middle Eastern “oil wealth”—is also accelerating its deep integration with China’s petrochemical industry. As the world’s largest oil company, Saudi Aramco, together with Norinco Group and Panjin Xincheng Industrial Group Co., Ltd., is investing RMB 83.7 billion to build a new integrated refinery and petrochemical complex with a daily processing capacity of 300,000 barrels.

Dissolving loss-making subsidiaries and embracing synthetic biology! BASF and Evonik continue intensively investing in China.

Recently, Huaheng Biology—a leading listed company in China’s synthetic biology sector—announced signing a Memorandum of Understanding (MoU) on strategic cooperation with global chemical giant Evonik. The two parties will leverage their respective strengths to jointly provide high-quality bio-based amino acid products to global customers and advance innovation and development in the field of animal nutrition and health. Notably, on the same day as this announcement, another leading listed enzyme manufacturer—Weilan Biology—issued a public notice stating that it had signed a *Settlement Agreement* with Evonik, and would initiate dissolution and liquidation procedures for their joint venture and its Qingdao branch. The company to be dissolved is Win-Evonik Weilan, a Sino-foreign joint venture established in 2023, specializing in feed-grade probiotics. With registered capital of RMB 37.5 million, Evonik holds a 55% stake. Going forward, both parties will sign a new private-label manufacturing agreement. According to Weilan Biology’s 2024 annual report, Win-Evonik Weilan generated annual revenue of only RMB 32.93 million and incurred a net loss of RMB 6.48 million—consistent with the stated rationale in the report: “based on the joint venture’s actual operational performance and both parties’ future business planning.” Animal Nutrition: Evonik China’s Three-Stage Leap Evonik’s collaboration with Chinese biomanufacturing enterprises dates back to 2018. At that time, Evonik signed a cooperation agreement with Fufeng Group—the industry leader in biological fermentation—authorizing Fufeng to produce L-threonine (ThreAMINO™) using Evonik’s technology. As a critical step in expanding its presence in the Chinese market, this marked Evonik’s first-ever global supply of this product via cooperative manufacturing. L-threonine is an essential amino acid that animals cannot synthesize on their own and must therefore obtain through dietary supplementation. Appropriate addition of this product can enhance animals’ feed intake, weight gain, and overall feed nutritional value. Then came 2023, when Evonik partnered with Weilan Biology to establish the joint venture “Win-Evonik Weilan,” focusing on animal gut health products—including probiotics and formulated products—and launching multiple probiotic formulations and functional feed additives. The latest cooperation just announced—with Huaheng Biology—also centers on the animal nutrition field. According to the official announcement, the head of Evonik’s Animal Nutrition business line noted: “Huaheng possesses efficient, large-scale biotechnological fermentation capacity and technological advantages.”

BASF confirms exploratory Evonik takeover talks

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