After a decade of rapid development of an indigenous petrochemicals industry Mexico still relies on imported petrochemicals. To promote further participation of the private sector the Mexican government subsidizes the purchase of energy and basic raw materials. We analyze the impact of such a development policy on the growth of a balanced chemical industry, on the reduction of the dependence on imported chemicals, and on the technology selection by the industry. We then analyze the effect of insufficient investment capital and the possibility of entering the world markets for the sale of surplus petrochemicals.