Amid trade war and local opposition, Chinese chemical firm Wanhua drops plan to build plant in Louisiana
- Community activists claim victory after the Yantai-based company withdraws its land-use application for a US$1.25 billion manufacturing complex
- ‘You get the sense investors are putting projects on ice until there’s some confidence that some of worst of the trade war can be avoided,’ an analyst says
In the latest setback for Chinese companies investing in the US during the trade war, a state-owned chemical firm is hitting the pause button on a US$1.25 billion plant in Louisiana.
The retrenchment for a project that has been on the drawing board since 2014 comes as Chinese firms operating in the US face growing headwinds amid a grinding tariff showdown, mutual recriminations and mounting visa and security restrictions as the world’s two largest economies battle for pole position.
William Day, a manager with Wanhua Chemical Group Co’s US operation, said the company “decided to change the scope of the project” citing higher capital costs, adding that the company was still looking for US sites to build the massive plant at a later time.
The setback comes as a growing number of Chinese companies struggle, retrench and navigate shifting political and economic winds. A report by the China General Chamber of Commerce, an umbrella group of 1,500 China-related companies operating in the US, said fear tied to the trade war was undercutting the business environment for its members.
In the chamber’s 2019 annual survey, 54 per cent of respondents said they had no plans to upgrade, acquire or expand operations in the US, a near doubling of the 30 per cent who expressed similar disinterest in 2014. And three-quarters said they were “uneasy” about the state of US-China relations.
“Chinese companies have felt a decline in the general US business, investment and trade environment,” said Evan Pan, a research associate with the chamber. “Our member companies have been forced to respond to the trade war by either delaying their investments or readjusting their global supply chain networks.”