HONG KONG (Reuters) - The world’s largest chemicals maker BASF (BASFn.DE) said its business in China is stagnating because industrial customers continue to run down their inventories amid economic uncertainty.
“If you have a little bit of destocking which is currently the case you can bring demand (to) a zero growth rate,” BASF co-Chief Executive told Reuters Insider TV on Tuesday.
“That is what customers do at the moment. They are more cautious,” he said, adding that long-term investment plans IN China remained unchanged.
Volume in China, which accounts for about half of its Asian business, was flat in the first six month of the year, he said.
BASF, whose products range from catalytic converters and car coatings to insulation foams, said in July it was suffering as a result of a slowdown in China, its main growth market. Chinese economic growth could remain subdued until the end of the year, it warned.
Asked whether the ousting of Chinese Politburo member Bo Xilai was a concern, he said China has a record of seamless changes in leadership.
The downfall of provincial leader Bo earlier this year exposed rifts in China’s leading party.
“The Bo Xilai case showed that there is something behind the curtain, but on the other hand we have seen all the transitions of leadership going smoothly and I actually also expect that in October this shift will (go) smoothly,” Brudermueller said.
“And I think there is no alternative for (China) to opening up even more and integrating into the world economy.” (Reporting by Tara Joseph; Writing by Ludwig Burger)