Chinese Chemical Firm Invests $1 Billion in Louisiana Plant

Share this:
by Genna Liu
Wanhua CEO Zengtai Liao and Louisiana Governor John Bel Edwards sign agreement on Wanhua’s $1 billion investment. [Image: Louisiana Economic Development]

Chinese chemical company Wanhua Industrial Group recently announced a $1.12 billion investment in the construction of a chemical manufacturing plant in Louisiana. The investment by the world’s largest producer of polyurethane raw materials is the second largest Chinese investment in the state. The plant, which will produce MDI, a major chemical used in insulation foam for refrigerators, is expected to create more than 1,100 jobs. Wanhua CEO Zengtai Liao cited Louisiana’s immediate access to natural gas and ease of transportation via the Mississippi River as reasons for choosing the state.

Louisiana has benefited greatly since Chinese investment shifted towards the Gulf Coast in 2010. The state is now the third largest recipient of Chinese foreign direct investment in the United States. Among the notable Chinese investors is methanol producer Yuhuang Chemical, which in 2014 invested $1.85 billion in a Louisiana production complex. Louisiana Economic Development, the state agency responsible for strengthening the state’s business environment, offers incentives like FastStart, a workforce development program, to attract Chinese firms. For Wanhua, the package includes a $4.3 million performance-based grant and access to the state’s Quality Jobs and Industrial Tax Exemption programs.

Louisiana’s 2016 exports to China amounted to almost $8 billion, making the country its top export market. The state’s large agricultural export contributed to a nearly $7 billion trade surplus with China, the biggest of any state. Besides farm production, Louisiana is looking to strengthen oil and liquefied natural gas ties and boost Chinese tourism to the state.

Universities and organizations in the state also contribute to deepening relations between Louisiana and China. Xavier University of Louisiana partners with China’s Hebei University in programming its Confucius Institute, one of the first established among historically black colleges and universities (HBCUs), and recognized as Confucius Institute of the Year in 2016. The Academy of Chinese Studies in New Orleans enrolls more than 130 students in Chinese language classes, and the US-China Strong Foundation, supported by the Chinese and US governments, runs several campaigns to promote US-Chinese engagement in the state. Louisiana State University students and the Baton Rouge community also partake in Chinese New Year celebrations every year, showcasing Chinese dance, music, and culture.

Genna Liu is a research intern at the East-West Center in Washington and a government and economics student at Dartmouth College.