“Large multinational corporation signs agreement to invest billions of dollars in China petrochemical plant.” Yawn. It is not nearly as exciting as a trade war between the world’s two largest economies.

That is why a July 9 agreement concerning a $10bn investment by German chemicals giant BASF in a wholly owned facility in southern China received almost no press coverage, especially compared with the opening shot of US president Donald Trump’s trade war with China three days earlier. 

The two events are, however, closely linked and reveal much about Beijing’s penny-wise, pound-foolish approach to market access reforms over recent years. Chinese companies have profited enormously when foreign investors have been forced to operate through joint-venture structures, but China would have benefited much more if such requirements had been eliminated a long time ago.