In recent days, the EU announced the imposition of high tariffs on Chinese electric vehicles starting July 4.
In response, China launched anti-dumping investigations on European brandy and pork, and stated it would closely monitor tariff policies on dairy products, luxury goods, and large-displacement vehicles.
Trade friction between China and the EU has once again become a hot topic.
Against this backdrop, multiple media outlets have reported that German chemical giant BASF plans to close 11 domestic factories and shift its investment focus to China.
Earlier this year, BASF publicly announced plans for large-scale layoffs, primarily in Europe, citing reasons such as high energy costs in Europe, the protracted Russia-Ukraine conflict, and rising interest rates.
It is understood that BASF plans to close 11 production plants in Ludwigshafen, most of which are no longer profitable and have even incurred significant losses.
According to data from the German Chemical Industry Association, about one-fifth of recent investment in the German chemical industry has flowed to China.
Some BASF employees have already received "uncertain news" about relocating to China.
Although BASF has remained silent on these rumors, its strategic focus on China has long been an open secret.
BASF Greater China Chairman and President, Huo Jianfeng, once stated, "Where the market is, where growth is, that is where BASF is," emphasizing that BASF cannot resist the enormous scale of the Chinese market.
For instance, during the height of the COVID-19 pandemic, BASF decided to proceed with its integrated base project in Zhanjiang, planning to invest up to 10 billion euros by 2030, equivalent to five Tesla gigafactories.
This is BASF's largest single investment project since its establishment and the largest single investment project by a German company in China, demonstrating BASF's confidence in the Chinese market.
At that time, BASF stated that making this decision during the pandemic was not easy, but they did not hesitate for long because they knew their "economic well-being depended on China."
In fact, for BASF, the Chinese market is not an option but a necessity.
When the German political circles were discussing "decoupling," several BASF executives jointly published an article clearly stating that "withdrawing from China would make us miss opportunities."
In 1992, BASF was just a resin production joint venture in China, but in just thirty years, Greater China has become BASF's second-largest market globally, after the United States.
In 2022, China became the world's largest chemical country, accounting for 49% of global chemical production.
BASF expects that by 2030 at the latest, China will occupy half of the global chemical market.
"Investing in China means investing in the future."
Not long ago, BASF withdrew from a planned hundred-billion-dollar nickel-cobalt project in Indonesia that had been in the works for three years.
Industry insiders generally believe that BASF is planning a "big move" next.
Given that BASF is gradually reducing its production scale in Europe, turning to China seems like a probable event.
Of course, this does not mean that BASF will abandon Germany and Europe.
Enterprises seek profit and will naturally choose regions with better business environments.
Since the outbreak of the Russia-Ukraine conflict, Europe has been caught in a dilemma of geopolitical and economic issues, with overregulation, high energy costs, and serious bureaucracy, leading to extremely limited profitability for industry giants like BASF.
At this time, turning to China is a wise choice.
In simple terms, capital has no borders, and corporate investment decisions reflect their choices.
Despite some advocating for "decoupling," this cannot change objective realities.
China will unswervingly deepen its openness and take multiple measures to attract foreign investment and business.
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