President's visit to EV battery materials producer boosts businesses' confidence

President Xi Jinping reaffirmed the nation's commitment to opening-up and developing new quality productive forces as he visited a joint venture invested in by German chemical giant BASF on Monday, a trip that is expected to buoy the confidence of businesses operating in the country.

Xi toured BASF Shanshan Battery Materials Co during a fact-finding trip in Changsha, Hunan province, the first such trip after the annual sessions of China's top legislative and political advisory bodies earlier this month.

It came as the nation's top leadership underlined new quality productive forces, characterized by high technology, high efficiency and high quality, in underpinning China's high-quality growth and reinvigorating the world's second-largest economy.

Xi introduced the term new quality productive forces during a trip to northeastern China in September.

During the two sessions, Xi stressed the need to develop new quality productive forces that are tailored to local conditions.

The joint venture, formed by BASF and Ningbo Shanshan Co in 2021, with BASF being the majority owner, mainly produces materials for batteries used in electric vehicles.

BASF Shanshan's executives said Xi's trip has bolstered their confidence and reinforced their resolve for innovation.

"Today was a special day for us," said Michael Baier, chairman of the board for BASF Shanshan, adding that it was inspirational to have the Chinese president visit the joint venture.

"It is great to hear that the central government supports this kind of export business," he said.

Peng Wenjie, chief technology officer of BASF Shanshan, said he could feel the keen interest and emphasis from the president over new quality productive forces during the tour of the company's workshop and two laboratories.

Peng said the establishment of the joint venture, the largest foreign investment project in Hunan in 2021, enabled the German chemical company to become the first battery materials producer with a presence in all major global markets.

"BASF has always been optimistic about the development potential of the Chinese economy and market," Peng said.

He added that the second phase of the joint venture will be put into production in June and will enable the company to double its production capacity.

Tan Xinxin, dean of the research institute of BASF Shanshan, said that President Xi's trip will inspire the company to continue bolstering its innovation drive.

"We will keep bringing in more cutting-edge equipment and continuously enhance our ability to innovate deeply through exploration and experimentation in our scientific research," he said.

According to an announcement made by BASF in 2022, the joint venture has expanded its battery materials capacity to meet the fast-growing local and global demand in the electric vehicle industry.

The president's trip to BASF Shanshan came close to one year after he visited the Guangzhou manufacturing base of LG Display, South Korea's largest display panel maker. During the trip, he encouraged foreign investors to seize opportunities, build up their presence in China and further explore the Chinese market.

China has identified electric vehicles, lithium batteries and photovoltaic products as its "new three" products that will drive the growth of exports.

According to official figures, the exports of China's power batteries surged 87.1 percent year-on-year in 2023, with six of the top 10 global suppliers being Chinese companies.

Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute, said many multinational chemical corporations, including BASF, are committed to deepening their presence in China, motivated by the massive market potential and continuous endeavors to accelerate the development of new quality productive forces.

The key to advancing new quality productive forces lies in breakthroughs in technological innovation, he said.

"Cooperation for multinational corporations with local partners in the battery industry chain is not only an important innovation in business models, but also a significant manifestation of high-level openness to the world," Luo added.

Shi Jiayan, energy storage analyst of BloombergNEF, said overseas companies can benefit from the collaboration with Chinese companies by leveraging China's mature battery manufacturing technology and better commercializing their new battery technologies and products at competitive cost.