Taiwan's Formosa Plastics Corp's refinery and ethylene project in China's Ningbo province, which involve an investment of US$10 bln, has run into problems.
Formosa's proposed refinery project in Ningbo (Zhejiang province) has been ordered halted by Chinese authorities, and controls of a proposed 1.2 mln ton ethylene plant will be handed over to China National Petroleum Corp instead of Formosa - mainly due to industrial security reasons. Formosa Plastics was to solely operate the ethylene project due for launch this year, while the refinery project was to be run jointly with CNPC or Sinopec.
The drastic changes seem to be the result of reluctance on the part of the authorities to concede control of such strategic facilities to non-mainland investors. The Chinese government seems concerned with the industrial security in the strategic sectors, hence the reluctance to allow foreign investment to play a controlling role in them.