More than 80% of foreign companies operating in China anticipate that their profitability in the country will remain steady or increase this year, according to a survey by the China Council for the Promotion of International Trade (CCPIT). The survey covering nearly 800 foreign companies in 26 provincial-level areas between April and June found that nearly 70% of surveyed foreign-funded businesses were optimistic about their outlook for the Chinese market for the next five years.
Over 90% of respondents believe that the Chinese market’s attractiveness will either increase or remain stable. Among the surveyed foreign firms, 59.82% are engaged in processing and manufacturing businesses, while 64.6% are small, medium and micro-sized enterprises. The primary reasons cited by these companies for investing in China include “large market size”, “multiple preferential policies” and “complete industrial and supply chains”, accounting for 77.54%, 53.36% and 39.91%, respectively.
As for development opportunities, foreign respondents said that the high-quality innovation environment, continuous opening-up in central and western regions, and the booming digital economy will offer strong momentum for their growth in China, said Sun Xiao, Spokesman for the Beijing-headquartered CCPIT. With China’s overall economic recovery and improvement, the confidence of multinational corporations in investing in the country has remained stable, and there has been no change in the overall trend of foreign companies expanding their investments in China, he added. China has implemented several policy measures to drive its economy toward high-quality development. The country is strategically shifting its focus toward cultivating new strengths centered around technologies, standards, brands and services, thereby facilitating a multifaceted transition in its economic landscape, said Chen Wenling, Chief Economist at the China Center for International Economic Exchanges in Beijing. Since the start of 2023, executives from multinational corporations, such as Siemens, ASML Holding, Tesla and Visa, have visited China, showing enthusiasm to expand investments in the Chinese market.
Eager to expand its market share in the country, luxury parka manufacturer Canada Goose plans to open more stores in China to meet the soaring demand for its products this year and beyond. Foreseeing a 40% year-on-year growth in the fourth quarter of its 2023 fiscal year on the Chinese mainland, Larry Li, President of the China unit at the Canadian company, said that Canada Goose will add eyewear, luggage and household goods to its product portfolio in the Chinese market within the next five years.
Thyssenkrupp announced last week that one of its subsidiaries inaugurated a new production line with an investment totaling CNY500 million to produce more seamless rolled rings for large megawatt wind turbines at its plant in Xuzhou, Jiangsu province. This is the fourth time the company has increased its investment in the factory since its establishment in 2005. The new investment will boost the plant’s production capacity by 150,000 metric tons. “China is one of the most important markets for our business. Wind turbines are increasingly designed with a larger size and more megawatts. Seamless rolled rings of high quality are one of the key factors for safe operation,” said Winfried Schulte, CEO of Thyssenkrupp Rothe Erde, a sub-brand of Thyssenkrupp that supplies bearings and seamless rolled rings for various industrial applications, the China Daily reports.
The Global Times adds that foreign direct investment (FDI) in the Chinese mainland in actual use fell 2.7% in the first half of 2023, with the country having used CNY703.7 billion of foreign capital, Vice Minister of Commerce Guo Tingting said on July 19. Some 24,000 new foreign-invested firms were established during the period, a surge of 35.7% from a year earlier. Geopolitical tensions and financial turmoil saw global transnational investment falling 12% in 2022, according to the United Nations Conference on Trade and Development (UNCTAD), which predicted continued downward pressure for global investment in 2023.
During a trip to Shanghai Free Trade Zone's Lingang Special Area, Chinese Premier Li Qiang vowed to attract more foreign enterprises to invest in China, and called for joint efforts to ensure stable industrial and supply chains, the Xinhua News Agency reported. Li visited Lenze Drive Systems (Shanghai) Co, a subsidiary of German firm Lenze, that specializes in automation, and Volvo Construction Equipment (China) Co, and learned details about the firms' progress in promoting intelligent manufacturing and remanufacturing.
MOFCOM said in a meeting that localities should step up efforts to stabilize and increase foreign investment, and speed up the process of setting up a roundtable mechanism with foreign companies for communicating on a regular basis and responding to companies' concerns in a timely manner. Bai Ming, Research Fellow at the Chinese Academy of International Trade and Economic Cooperation under MOFCOM, believes more policies will be announced in the second half of the year aimed at stabilizing foreign investment. “As China pursues the path of high-quality development, it will need to foster a win-win relationship with foreign-invested companies,” Bai told the Global Times. As the 100-day countdown to the 6th China International Import Expo (CIIE) started, global executives from over 60 exhibitors have confirmed their personal attendance at the world's largest imports trade show. Dozens of foreign companies have already signed up for the 7th CIIE in advance, the Global Times reports.
