Compared to modern industries such as high-tech and shiny retail malls, foreign investment in China's coal industry may be seen as a step into the past.

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Yet more and more foreign companies have entered the coal and related chemical sectors to tap into one of the nation's most traditional heavy industries.

Foreign companies now interested in major projects include US chemical giant Dow Chemical, Sasol Ltd from South Africa and Thailand's Chia Tai Group, said Zhang Yuzhuo, deputy general manager of Shenhua Group, the nation's largest coal company.

"Although foreign investment still accounts for a small part of China's coal chemical industry, multinationals have quickened their pace in the sector," said Zhang, who is also in charge of Shenhua's coal liquefaction business.

The quick development of China's coal chemical industry has provided a big incentive for foreign companies. According to a draft of the medium- and long-term plan for the development of China's coal chemical industry, China will invest more than 1 trillion yuan in development by 2020.

The nation will focus on the production of liquefied coal, dimethyl ether (DME), coal-to-olefin (CTO) and coal methanol.

By the year 2020 China plans to produce 30 million tons of liquefied coal and 20 million tons of DME; it aims to produce 8 million tons of CTO and 66 million tons of coal methanol by that year.

The nation also plans to build seven coal chemical bases by 2020.

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