The investment will be in place before 2008, with most of it -- US$3.1 billion -- going to a chemical production base in Caojing near Shanghai, announced Manfred Schneider, chairman of Bayer.

The Caojing project is scheduled to start construction on Friday with the attendance of visiting German Chancellor Gerhard Schroeder.

"China has become the investment focus of Bayer, which would surpass Japan before 2010 to be Bayer's biggest market in the Asia-Pacific region," said Schneider.

Bayer kicked off its first investment in China, US$300 million, in 1994. Up to now, it has established 10 mid-sized joint ventures and two wholly owned foreign enterprises in China.

"The investment in Caojing, the single largest capital expenditure project in our company's 138-year history, would support Bayer's future expansion in the Chinese market including the mainland, Hong Kong and Taiwan," the chairman of the German giant said.

The Caojing investment, the first in the Shanghai Chemical Industry Park and the location of Bayer's base, is expected to help the park become one of the largest and most advanced of its kind in the world, said Schneider.

The company will proceed with its investment plans in Caojing very swiftly, with construction work for the coatings and polycarbonate plants starting today. Since Bayer began doing business in China a century ago, it has penetrated deeply into the country with its four major activities - health care, agriculture, polymers and chemicals.

China's economic potential has attracted many foreign companies and the country's improved investment conditions have prompted multinationals to look at China as a regional investment hub, said Schneider.

He forecast that foreign direct investment in China would rise from US$41 billion this year to US$65 billion in 2005.

In another development, German electronic giant Siemens, which is currently the largest German investor in China, yesterday signed deals with Chinese telecom companies to further consolidate its business.

China Unicom, the country's second largest mobile telecom carrier, inked a US$50 million deal with Siemens to build its national optical network.

The new network, which is China Unicom's largest optical network contract, will have a length of more than 15,000 kilometres.

The contract with China Unicom is Siemens' fourth optical and broadband equipment contract for the Chinese market.

(China Daily November 1, 2001)