To support risky large-scale projects, extensive credit default swaps and tax reductions are planned through the China Development Bank and Silk Road Fund. “China has proved in the past that it implements its plans subsequently”, says Henrik Meincke emphasizing the impact of Chinese industrial policy.
“With the economic restructuring to high-quality products and the massive development in innovation in the recently adopted new five year plan, there are many potential cooperation opportunities for western companies which must be used,” says Dr. Claas-Jürgen Klasen, President Greater China, Evonik.
However, it will be more difficult for foreign plant constructors: For the first time since 2000 China is not one of the strongest markets, explains the German engineering association VDMA. Since 2007, incoming orders have declined by over 70 %. The reasons for this range from the slower growth dynamic to conversion of the economy from export to a consumer oriented model, overcapacities and increasing competition.
At the same time, China is carefully protecting its national interest: From 2006 to 2012, the market share of foreign-owned chemical companies declined from 27 % to 23 %, while Chinese private firms managed to increase their share in revenue by 15 % to 58 %.
This distinctive edge that domestic companies have has become even more obvious: The first ten months of 2015 saw a decline in sales of foreign chemical firms in China by about 6.1 %, recent Deutsche Bank figures show.
In the same time, Chinese players increased sales by 5.6 %. Nevertheless, industry experts see opportunities for international plant constructors: The required transformation needs the most modern technologies and processes that ensure energy and resource efficiency — a speciality of European and American plant engineers.
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