Exxon is betting on chemicals in China

ExxonMobil is moving forward with the establishment of a multibillion-dollar petrochemical complex in China, which is a strategic pillar of its growth plan, although other companies are forced to reconsider their investments in the country under political tensions.

The trips of Exxon executives during the current year of China to verify the progress of the Huizu City project were numerous, according to people familiar with the matter who requested not to disclose their identities during an internal discussion.

According to data from Standard & Poor’s Global, this larger facility is among 10 or more projects in the country by companies targeting the production of ethylene, an intermediate plastic. The complex was also designed to allow for subsequent expansion beyond the initial construction phase, according to 6 persons who worked on the project.

The reward Exxon is awaiting is a major share in the largest growth market for the petrochemical industry, which produces plastics, resins and fibres used by manufacturing industries in China to manufacture everyday consumer products that eventually arrive in homes around the world. But the tension of diplomatic relations between the United States and China over friendship with Russia, allegations of espionage and policy towards Taiwan has exacerbated strategic risks.

Exxon’s turnout for the opening of a new project in China contrasts with the alienation of some other companies, as enterprises such as Apple, Nike and Adidas, as well as automotive parts manufacturers, reduce their exposure to Chinese supply chains by investing with Asian neighbors such as Vietnam and Thailand.