China adds more chemical foreign investment rules

07 November 2007 10:41  [Source: ICIS news]

(ICIS news)--China’s top economic planner placed foreign investment restriction on several chemicals and biofuels on Wednesday in its latest policy revision.

Chinese companies were also required to hold controlling stakes in coal chemical investment, the National Development and Reform Commission (NDRC) said in a statement on its website.

Foreign investment in polybutadiene rubber (BR), emulsion styrene butadiene rubber (SBR) and thermoplastic elastomers (TPE) will be restricted, it added.

It also placed calcium carbide-based polyvinyl chloride (PVC) and the production of titanium dioxide via the sulphuric acid route under the restricted category, together with viscose fibre and plants that co-produce aniline.

Investment in caustic soda production was also restricted unless the more advanced ion-exchange membrane technology was used, the NDRC said.

Foreign investors were also banned from taking controlling stakes in fuel ethanol, biodiesel plants and also in soybean and rapeseed crushers as vegetable oil prices rose to record highs this week.

The NDRC has kept the 50:50 shareholding requirement for Sino-foreign cracker joint ventures with a minimum ethylene capacity of 800,000 tonnes/year, but it encouraged investment in the production of C4s to C9s and ethylene-based PVC with a capacity of at least 200,000 tonnes/year.

Foreigners were also welcome to invest in the production of chemical feedstocks and fibre intermediates such as aromatics, ethylene glycol (EG), bisphenol-A (BPA) and purified terephthalic acid (PTA).

Investment in solution SBR, engineering plastics, differential fibres and the use of recycled plastics were encouraged.

Foreign equipment makers keen to produce compressors and pelletizers for the chemical industry and large coal-chemical equipment in China would have to look for local partners, the NDRC added.

By: Florence Tan
+65 6780 4359

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