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Hambrecht Reportedly Attacks China Business Climate

Business, China, Company Strategy, Europe, Projects, Technology
By John Richardson on 19-Jul-2010

Jurgen Hambrecht

Hambrecht2.jpgSource of picture: www.wiwo.de/unternehmen-maerkte

 

By John Richardson

BASF’S Jurgen Hambrecht has made highly critical and extremely high-profile comments about China’s business environment, according to the Financial Times.

The CEO of the German chemicals giant is quoted as saying over the weekend – during a four-day visit to China by German chancellor, Angela Merkel – that foreign companies were being forced to transfer business and technological know-how to their Chinese counterparts in exchange for market excess.

“That does not exactly correspond to our views of a partnership,” Hambrecht apparently told Chinese premier Wen Jiabao.

Wen is quoted as responding by telling Hambrecht to calm down, while dismissing allegations that China’s investment climate had worsened.

Assuming Hambrecht has not been misquoted, these seem extraordinarily strong statements to make by the head of one of the major direct and indirect investors in China.

Directly, BASF’s stake in includes the BASF-YPC Nanjing petrochemicals complex and indirectly, it supplies lots of the chemicals to Germany’s booming engineering companies. These companies, boosted by a weaker Euro, have helped Germany post a strong export-led recovery.

The expansion of the Nanjing complex, a joint venture with Sinopec, interestingly includes some of BASF’s high-value technologies. The ten new chemicals plants, due for start-up in 2011 and beyond, include a 60,000 tonne/year super-absorbent polymer (SAP) plant, a 2-propylheptanol unit, a non-ionic surfactants unit and an amines complex.

As my fellow blogger Paul Hodges points out in a post on this same subject, Hambrecht’s apparent comments follow those of General Electric CEO Jeff Immelt, who was reported to have told an audience at a private dinner two weeks ago: “I really worry about China. I am not sure that in the end they want any of us to win, or any of us to be successful.”

The next Doha round isn’t going to happen anytime soon and so a great deal depends on strong bi-lateral trade relationships between countries with, of course, China at the centre of many bi-lateral initiatives.

So why rock the boat with the world’s most-important growth market unless frustration got the better of Hambrecht (again if we was quoted accurately)?

Or is there a sub-text to these comments that we are not aware of – i.e. a calculated exertion of pressure in an effort to achieve results?