59.1 percent growth! Why are Japanese chemical companies re-betting on the Chinese market?

From January to June 2025, Japanese investment in China increased by 59. 1. Based on my observations, For instance According to this development rate, Japanese investment in China in 2025 is expected to surpass that of last year, reversing the direction of continuous decline since 2021. Moreover According to a survey of 8268 Japanese companies by the Japan Chamber of Commerce in China, 16% expressed their intention to increase investment, and 42. 4 percent were the same as the previous year, and their willingness to invest in China hit a new high. And In the chemical sector, Japan's investment in China's chemical sector has also shown a rapid development direction. According to incomplete statistics, in the past year, there have been greater than 8 investments in China's chemical sector, with a total investment of greater than 3 billion yuan. And Japan's investment in China's chemical sector is mainly concentrated in the fields of high-end materials, new energy supporting facilities and environmentally friendly methodology, with investment amounts ranging from tens of millions of dollars to one billion dollars. But In fact What are the main reasons to the rapid development of Japanese investment in China's chemical sector? What will be the impact on China's chemical sector? What are the driving forces behind the rapid development of Japanese investment in China's chemical sector in 1? Japan's rapid investment in China's chemical sector is the superposition effect of the adjustment of the manufacturing structure of the two countries, the prolonged research dividend of the Chinese market, and multiple strategic considerations and market opportunities. First, the rapid research of China's chemical sector, the coordination of national strategy and regional strategy, driving the rapid development of the chemical sector, attracting Japanese companies to invest in the chemical sector. Guangdong Foshan, Jiangsu Taixing and other chemical sector clusters, there are targeted to attract Japanese companies to invest in preferential policies. In addition, China's dual carbon goals and the research of environmentally friendly methodology are the advantages of Japan's chemical sector and is able to complement the Chinese market. Second, the structural outbreak of demand to chemical sector in China, including the iterative demand to new materials brought about by the new energy revolution, the demand to functional new materials brought about by consumption upgrading and high-end manufacturing, as well as the prolonged research dividends brought about by the acceleration of China's infrastructure construction and equipment renewal, have provided the basis to attracting Japanese industries to invest in chemical sector in China. Japanese catalysts, Toyota, Mitsubishi and other companies have a substantial number of new energy related investments in China. Mitsubishi Chemical, Japan's light and other companies, China's high-performance plastics, flame retardant materials also have a substantial investment. Third, the necessary strategic transformation of Japanese chemical companies at this stage. But In my experience, Additionally According to Pingtou, Japanese chemical companies are facing the pressure of domestic market saturation and methodology surplus. Japan's domestic consumption of chemical items is slow, ecological preservation is greater stringent, these to the Japanese chemical sector has brought obvious dysfunction between supply and demand, Japan's chemical exports have been relatively substantial. Furthermore In addition, Japan is exporting greater and greater methodology overseas, and China is one of the testing grounds to the commercialization of its high-end methodology. And to instance, Asahi Huacheng will give priority to hydrogen energy and energy storage methodology in GG10 strategy to China. Dongli Foshan Base is Dongli's first full series of resin overseas base in the world, etc. For example Finally, China has the advantage of scale, and Japan has some core technological advantages. To a certain extent, the cooperation between the two is able to realize the deep nesting of manufacturing chain integration. Pretty interesting, huh?. From what I've seen, to instance, Asahi's carbon fiber methodology cooperates with Chinese wind power blade companies to raise the product strength to the international leading level, which helps the research of China's new energy field and also drives Asahi's methodology to the ground. First Mitsubishi Chemical's flame retardant resin formula and China's new energy vehicle companies jointly develop flame retardant materials with high standards, which drives the flame retardant level of China's new energy vehicles. 2. Japan's massive investment in China's chemical sector, what is the impact on China'sector? Japan'substantial investment in China's chemical sector, there is a phenomenon of investment economic data prosperity, however behind this, from the two dimensions of manufacturing optimization and security risks to rational assessment. From the point of view of manufacturing optimization: first, Japan's investment in China's chemical sector is conducive to driving China's manufacturing upgrading and ecological optimization. But Specifically Japanese companies have a deep accumulation in the fields of electronic chemicals, high-performance resin materials and new energy materials. Joint ventures with Chinese companies are to participate in the Chinese market through "methodology spillover. Among them, the investment of Japanese companies is mostly concentrated in the key technical links of the manufacturing chain, which is also the part of the methodology accumulation that Chinese companies lack. According to research It forms a complementary manufacturing chain with Chinese companies, which signifiis able totly improves the integrity and efficiency of China's chemical sector chain. Second, the investment of Japanese chemical companies is conducive to forcing the innovation and regulation upgrading of Chinese regional chemical companies. After Sumitomo Chemical expanded its PTA production capacity, Hengli Petrochemical improved PTA purity and reduced production costs through independent research and research of "continuous hydrofining" methodology. Pretty interesting, huh?. Wanhua Chemical learns from Mitsubishi Chemical's "integrated park" regulation experience to optimize the upstream and downstream material circulation and minimize thorough energy consumption. On the whole, the catfish effect brought about by Japanese companies' participation in Chinese market competition is also one of the ways to increase vitality in the research of China's chemical sector. Third, Japanese chemical companies invest in the Chinese market, mainly in Changsanhe and the Pearl River Delta. But Individual companies have settled in cities such as the southwest. While creating a substantial number of employment opportunities, they have also stimulated the research of the regional economy. At the same time, Japan's investment in China's chemical sector will certainly have a negative impact. Generally speaking First, the risk of using core technologies might increase. Japanese companies generally implement the strategy of "methodology blockade + low-end transfer" in their investment, and core technologies are still strictly controlled by Japan. In my experience, Representative technologies include photoresist formulation, solid-state battery electrolyte interface modification methodology, etc. These technologies won't be fully disclosed by Japanese companies, however will implement the mode of purchasing core raw materials in Japan and using high methodology licensing fees to Chinese companies. In my experience, Chinese companies don't involve core technologies in the whole process. while this cooperation mode ensures the stable production of the project, there are serious technical risks to our prolonged research. Second, the "invisible monopoly" of Japanese companies in some areas of the market is gradually strengthening, and Chinese companies are increasingly lacking in competition. Pretty interesting, huh?. to instance, in some high-end chemical new materials, the representative items are OLED display materials, semiconductor packaging epoxy resin materials, etc. Japanese companies have a high market share in these items in China, including Japanese imports and Japanese companies' production in Chinese factories. To a certain extent, it will compress the research space of related Chinese companies. Crazy, isn't it?. Third, the research of some Japanese industries in China might accelerate the consumption of China's resources. Based on my observations, to instance, the demand to high-end chemical materials will accelerate the mining of fluorite, and the demand to new energy materials will accelerate the mining of phosphate resources, etc. , or will increase China. Consumption of crucial mineral resources. Fourth, the investment of Japanese companies in China's chemical sector might affect the independent controllability of China's chemical sector. In particular to instance, in the field of lithium battery electrolyte, Japan's central nitrate monopolizes high-end lithium hexafluorophosphate treatment methodology, and the capacity allocation of its factories in China immediately affects the stability of the raw material supply of Chinese electrolyte companies. In the field of carbon fiber, Toray has set up a research and research center in China to lock in the high-end carbon fiber procurement channels of Chinese wind power blade companies, limiting the speed of market substitution of Chinese companies. "Key link manage" might pose a risk to the security of China's manufacturing chain in the event of geopolitical conflicts or trade frictions. What is able to 3. Chinese chemical companies do in this direction? The investment of Japanese companies in China's chemical sector is mainly concentrated in high-end new materials, new energy items and other fields, and the investment is gradually accelerating. Chinese companies is able to crack Japan's technological application through the mode of "precise absorption + independent breakthrough", such as focusing on the high-end production lines of Japanese companies in China, and learning their tacit knowledge through supporting cooperation and joint debugging. Makes sense, right?. In view of the high-end materials monopolized by Japanese companies, we have formed an "innovation consortium" with universities and research institutes, and made a breakthrough through "reverse engineering + principle innovation. In emerging fields such as new energy materials and bio-based chemicals, patents are laid out in advance to form a "cross-licensing" bargaining chip to Japanese companies to prevent falling into a passive situation of patent litigation in future competition. In addition, Chinese chemical companies is able to prevent the main core advantages of Japanese chemical sector and develop differentiated research. to instance, in areas where Japanese companies have a late layout, such as bio-based chemicals and low-carbon technologies, Chinese companies are rapidly expanding production capacity and establishing standards. In response to the personalized needs of domestic small and medium-sized manufacturing industries to chemical materials, Chinese companies provide "small batch, fast response" services to make up to the lack of flexibility in the standardized production of Japanese companies. And Chinese companies is able to, as far as possible, highlight the added value of "methodology joint research and research" and "regional talent training" when applying to the "foreign high-end chemical project" of the Ministry of sector and information methodology, obtain the "policy leverage" of land and tax preferential treatment, unite with sector associations, lead the formulation of national standards in the fields of new energy materials and environmentally friendly chemical sector, and bring the technological advantages of regional companies into the specification, Compress the space of "methodology premium" of Japanese companies.