The group is building a massive integrated chemical complex in southern China, its biggest ever investment project set to cost around 8.7 billion euros ($10.1 billion).

But the project has proven controversial at a time concerns have been growing about German firms' heavy economic dependence on Communist Party-ruled China.

CEO Markus Kamieth, however, said that "if you want to be a growth company in chemicals, you have to grow in China".

"China is by far the biggest market for chemicals," he told several media outlets, including AFP, in a discussion in Berlin.

"China is by far the strongest manufacturing country in the world. So if China grows, the market grows."

A host of problems, ranging from high energy costs to onerous regulations, have pushed the German chemical sector into crisis in recent years.

BASF -- the world's biggest chemical company by revenues -- has announced plans to make big savings in recent years, including by cutting jobs at its historic Ludwigshafen headquarters in Germany.

The group announced last week that its site in China, in Zhanjiang, Guangdong province, had started producing chemicals, marking a significant milestone for the project.

China's economy, the world's second biggest, has been battling a slowdown however, and Kamieth said business there had been a little slower than expected.

"The margins that we get from the product in the Chinese market will be lower than what we originally expected... We will have an economically more difficult start," he said.

BASF has also faced some headwinds in China. In April the group announced it had exited two joint ventures in the Xinjiang region after its local partner was alleged to have participated in rights abuses against the local Uyghur minority.

When it comes to politics, Kamieth said that Chancellor Friedrich Merz's coalition was yet to show "strong positive signs towards China," noting the leader had not yet visited China.

"I would still advise and advocate also the German government to reach out to seek a good working relationship with the Chinese government," he said.

Germany and China have long had deep ties, especially on the economic front, but relations have frayed in recent years over a host of issues, from trade issues to human rights.

German Foreign Minister Johann Wadephul postponed a trip to China last month, with Berlin saying that key meetings could not be arranged. However, Finance Minister Lars Klingbeil is due to visit next week.

kas-sr/fz/cw

BASF