Foreign companies remain upbeat about Chinese market
Photo taken on June 23, 2022 shows that BMW i3 electric cars are pictured during the inauguration ceremony of Plant Lydia of BMW Brilliance Automotive (BBA) in Tiexi District of Shenyang, northeast China's Liaoning Province.(Xinhua/Yang Qing)
Foreign-funded enterprises remained upbeat about investment prospects in China amid the country’s continuous efforts to open its door wider and increase its market appeal to global investors.
Recently, the groundbreaking ceremony of the Toyota Fuel Cell R&D and Production Project (Phase I) was held in Beijing. The automotive manufacturer attempts to catalyze the promotion and application of hydrogen energy in China via the project. Not long ago, Volkswagen Group announced the establishment of a joint venture with Beijing-based tech company Horizon Robotics, continuing to strengthen its development capabilities "in China, for China". Zeiss also made a big move - following its first overseas R&D center built in Shanghai a decade ago, the global leader in optical and optoelectronic technology launched the "Fengqi" project in Suzhou lately, aiming at higher-level R&D and manufacturing.
Experts believe that multinational companies' transfusion of investment in China mirrors their trust in the country's super-large market and its matured, efficient industrial system. Besides, what is behind that is the unchanged economic fundamentals that will sustain long-term growth and the increasingly attractive Chinese market featuring steady opening-up.
It's estimated that foreign investment in China will maintain steady growth in the fourth quarter of this year.
-- China's foreign investment inflow expands continuously
In the third quarter, the Chinese market remained attractive to foreign investment with a stable social environment, huge economic potential, an enormous market space, full-fledged industrial supporting facilities, and continuous preferential policies, said Sun Xiao, spokesman for the China Council for the Promotion of International Trade (CCPIT).
Major investment institutions around the world showed confidence in China, and nearly 80 percent of foreign-funded companies maintained their existing production and business scale, which resulted in growing foreign investment inflow, according to Sun.
Data from the Ministry of Commerce (MOC) showed that the foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded 15.6 percent year on year to 1.00376 trillion yuan in the first nine months of the year. In US dollar terms, the inflow went up 18.9 percent year-on-year to 155.3 billion U.S. dollars.
From January to September, high-tech industries saw FDI inflow surge 32.3 percent from a year earlier. Specifically, FDI in high-tech manufacturing jumped 48.6 percent while that in the high-tech service sector rose 27.9 percent year-on-year.
Chinese market is dynamic and is Volkswagen Group's most important business area in the world, said Ralf Brandstätter, chairman and CEO of Volkswagen Group China, adding that the partnership with Horizon Robotics is a central cornerstone of Volkswagen Group’s strategy to realign and further strengthen the company’s activities in China.
The "Fengqi" project is the first time that Zeiss has purchased land and built its own project in China since it came to the country 65 years ago, indicating the company's further deepening and expansion of business here. Maximilian Foerst, president and CEO of Zeiss Greater China, said, Zeiss has been optimistic about China's development, and its investment in the "Fengqi" project in Suzhou embodies its conviction in further exploiting the Chinese market and promoting localization.
The special task force for key foreign-funded projects under the foreign trade and investment coordination mechanism will make more detailed and effective measures to serve key foreign-funded projects, introduced by Shu Jueting, spokesperson for the Ministry of Commerce, at a regular press conference.
According to Shu, the MOC worked with local governments and relevant departments, to roll out a new list of key foreign-funded projects and launch landmark foreign-funded projects in the manufacturing sector based on the new list.
-- More vigorous policies unveiled to stabilize foreign investment
Multinational giants chose to invest more in China because of the country's unlocking policy effects and the improving business environment, in addition to its sophisticated industrial system and infrastructure as well as its super-large market.
Recently, more vigorous policies have been unveiled to stabilize foreign investment.
The National Development and Reform Commission (NDRC) and the MOC jointly issued a new catalog of industries where foreign investment will be encouraged, opening more sectors to foreign investment. The new catalog will come into force on January 1, 2023.
The latest revision is a vital measure to further stabilize foreign investment in the current context, said an official with NDRC, adding that it is conducive not only to promoting high-level opening-up and accelerating the construction of the new development paradigm but also to further keeping foreign investment stable, optimizing investment structure, and boosting foreign investment expectations and confidence,
Besides, six departments, including NDRC and the MOC, jointly unveiled the measures to spur foreign investment quality and quantity with a focus on the manufacturing sector recently.
It proposed to intensify efforts to introduce investment to the manufacturing industry, focus on addressing prominent problems faced by foreign-funded companies, bolster foreign investment promotion and services on all fronts, and stimulate high-quality development of foreign investment utilization.
Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation, thought that a slew of policies and measures clearly signaled that China will open wider and better to the world.
CCPIT rolled out the survey report on China's business environment for foreign enterprises on October 27, which shows that foreign-funded companies remain upbeat about the Chinese market and generally speak well of China's business environment as well as macroeconomic policies.
Over 90 percent of foreign-funded companies are more than "satisfied" with obtaining business premises; nearly 90 percent of foreign-funded companies are more than "satisfied" with market access, taxation, policies to keep the industrial and supply chains stable, implementation of the catalogue of industries encouraged for foreign investment, fiscal policies, and policies to cut taxes and fees.
-- Quantity and quality of foreign investment expected to grow
China's economy is recovering, the resilience of economic growth is improving, and the market is widening, all of which are appealing to foreign investment, and thus China will secure stable growth in foreign investment in the fourth quarter, said Zhang Yiqun, deputy director of the Performance Management Committee of Society of Public Finance of China.
Experts predicted that in 2022, China is expected to achieve an increase in both the quantity and quality of foreign investment.
Zhao Ping, vice-dean of the CCPIT Academy, said foreign investment is likely to keep a good momentum of steady growth, as China is stepping up efforts to open its door wider to the world while opening up more sectors of the economy, steadily recovering the industrial and supply chains, and expanding the list of sectors to encourage more foreign investment.
Analysts are convinced that China's momentum of stable growth in foreign investment has not changed. Relevant departments will continue to pursue higher-standard opening-up, actively respond to the demands of foreign-funded companies for convenient business in China, and keep securing good results in stabilizing foreign investment. The open Chinese market is bound to offer more opportunities to enterprises from all over the world.
According to Shu, next, China will work harder to attract new foreign-funded projects, support local governments to carry out investment and project promotions for key industries, and help realize more investment intentions. As a result, China can welcome unceasing new key foreign-funded projects.
