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Foreign enterprises confident in China’s economic prospects

By Qu Song, Yang Xun, People’s Daily

Many foreign enterprises in China said they are optimistic about China’s economic prospects given what the country has done to further open up and improve business environment. They said they are willing to further develop in the Chinese market and share development opportunities.

China’s total foreign trade in goods hit $6.05 trillion the last year, occupying an increasingly larger share in the global market. The country’s actual use of foreign capital surged 14.9 percent year-on-year to a historic high of about 1.15 trillion yuan ($181 billion).

According to statistics released by China’s Ministry of Commerce, China had been the world’s second largest destination of foreign capital for four years in a row between 2017 and 2020, and ranked first globally in outbound direct investment in 2020.

Employees of Siemens Electrical Apparatus Ltd., Suzhou manufacture circuit breakers ordered by foreign clients, June 22, 2021. (Photo by Hua Xuegen/People’s Daily Online)
Employees of Siemens Electrical Apparatus Ltd., Suzhou manufacture circuit breakers ordered by foreign clients, June 22, 2021. (Photo by Hua Xuegen/People’s Daily Online)

Last March, materials science leader Dow signed a memorandum of cooperation to build a manufacturing base in Zhanjiang, south China’s Guangdong province, with initial investment of $250 million.

Xu Yang, vice-president of Dow Greater China said the inking of more and more multilateral and bilateral trade and investment pacts, as well as the continuously facilitated cross-border trade have made China an important part on the global and regional supply chains, and the company’s second largest market globally.

According to an HSBC survey, 97 percent of the interviewed enterprises are planning to expand their investment in China, saying the country boasts a huge market, prospects for long-term growth, and a complete supply chain system.

A recent report issued by PricewaterhouseCoopers showed that Japanese enterprises in China attach high importance to the Chinese market and are generally satisfied with the business environment in the country. Ninety-one percent of the respondents said they will keep expanding their investment in China in the next three to five years.

The attraction of the Chinese market for foreign capital comes from the country’s efforts to expand opening-up and improve business environment. In the newly released 2021 version of the national negative list and pilot free trade zone negative list, the number of items has been cut by 6.1 percent and 10 percent, respectively. This marked the fifth year in a row for China to shorten the lists, which mirrored the continuous efforts made by China to make its business environment more market-oriented, law-based and internationalized.

A study by the Union Bank of Switzerland said that the gigantic and rapidly expanding Chinese market, as well as China’s continuous opening-up, will keep attracting foreign investment. As the global supply chain restructures, the role of Chinese upper-stream suppliers will be further underlined.

Workers manufacture products to be exported in a factory of a South Korean company in Rongcheng, east China’s Shandong province, Aug. 19, 2021. (Photo by Wang FudongPeople’s Daily Online)
Workers manufacture products to be exported in a factory of a South Korean company in Rongcheng, east China’s Shandong province, Aug. 19, 2021. (Photo by Wang FudongPeople’s Daily Online)

Honeywell is one of the earliest American enterprises to enter the Chinese market. Now, China has grown into the largest single market outside the U.S., as well as the fastest growing market of the company.

Steven Lien, president of Honeywell China noted that China is opening its market both extensively and intensively, and ensuring national treatment for foreign-funded enterprises to further release the market’s vitality of innovation. China has offered perfect development opportunities for Honeywell and other transnationals, reinforcing the company’s confidence in developing in China, Lien added.

Citing a report by Klynveld Peat Marwick Goerdeler, Reuters said in an article published on its Chinese website that China will continue to attract foreign investors in the new year, particularly in the wealth management, new energy, and high technology sectors.

In recent years, Epson has seen sound development of its businesses in China. The multinational electronics company estimates that China will be one of its fastest-growing markets in the years to come. Akihiro Fukaishi, president of Epson China, said the company’s confidence in China comes from the country’s energy that drives technological innovation. China is leading in multiple sectors globally, such as software and the internet, he added.

Liu Chang, chair of the government affairs forum of the European Union Chamber of Commerce in China, said China has made remarkable progress in building innovation ecology in the recent years.

According to a survey released by the chamber, 72 percent of the respondents thought Chinese enterprises were competent innovators, and the country’s sound environment for innovation was spurring multinationals to enhance their R&D efforts and establish innovation centers in China.

Multinationals will take full advantage of China’s innovation resources, exert their strengths in technology, and enhance cooperation with their Chinese partners for win-win results, Liu said.

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