The company, which produces a variety of polyurethane and polycarbonate-based raw materials used in sectors from automobiles to electronics, has established a partnership with bottled water brand Nongfu Spring to carry out recycling of water bottles.

It is also working with Tongji University in Shanghai on solutions to recycle mattresses.

"People these days are talking a lot about circular economy and carbon neutrality. We don't just talk about it, we are actually taking action. We hope we could have an impact on others with the efforts we have made," Holly Lei, president of Covestro's China operations, told China Daily in an interview.

She said the company will launch the world's first climate-neutral polycarbonates later this year to better help players in the downstream industry chain achieve their sustainability goals.

"We are accompanying our clients in accelerating the transition to the circular economy, as well as helping build an industrial ecosystem that favors circularity," Michelle Jou, president of the polycarbonates segment at Covestro, said.

China is making great efforts in green development with an ambitious goal of hitting peak carbon emissions by 2030 and achieving carbon neutrality by 2060.

Lei said China is the biggest single market of Covestro and the company will continue to strengthen its presence in the country.

It will build a new production facility for polyurethane dispersions at its Shanghai integrated site, the company's largest site worldwide and home to 11 plants, in a move to address growing demand for environmentally compatible coatings and adhesives in the Asia-Pacific region.

The material is widely applied in the automobile, furniture and shoe sectors.

The plant is expected to start construction within this year and begin operations in 2024, Lei said, without disclosing further details.

"We view China as our home market. From research and development, production, management and investment, we have comprehensive business in the country," Lei said.

"The Chinese market is highly important in our global strategy not only for now, but also for the coming years ahead. We are very confident about the prospects for this market."

Covestro's sales in the Chinese market reached 2.25 billion euros ($2.68 billion) last year, accounting for 21 percent of its total worldwide. The company's cumulative investment in China hit 3.8 billion euros as of the end of 2020.

While the Chinese government set its target for this year's economic growth at above 6 percent, some international organizations estimated that the rate could exceed 8 percent.

"With cross-industry application of our products, our business will grow in line with the pace of the Chinese economy, or even faster. We will strive to grasp the opportunity brought by Chinese economic growth," Lei said.

She also said the development of "new infrastructure" and smart city in China will bring new business opportunities to the company, as it will drive greater demand for high-performance materials, which are needed for making hardware equipment for the internet of things.

Also, China is striving to boost domestic consumption and that involves a wide range of things from garments and shoes to automobiles and electronics. "These are all drivers of growth and opportunities for us," she said.