Overseas firms boost investment in Wuhan after coronavirus hit

By Xie Jun Source:Global Times Published: 2020/5/20 19:43:40

Honeywell hosts a booth at the ATC 2016 in Beijing on September 12. Inset: Steven Lien, President of Honeywell Aerospace, Asia Pacific. Photo: Courtesy of Honeywell

Some overseas companies are moving to expand investment in Wuhan, Central China's Hubei Province, not long after the city ended months of lockdown and endured a heavy Covid-19 death toll, as foreign enterprises are attracted by the area's market potential and favorable policies by the local government. 

On Tuesday, US-based manufacturing giant Honeywell inaugurated its emerging market China headquarters and innovation center in Wuhan's high-tech hub, the East Lake High-Tech Development Zone. 

Chinese Premier Li Keqiang sent a congratulatory letter to the opening ceremony of Honeywell's new headquarters, in which he stressed that the Chinese government's determination to deepen reform and opening-up in the face of downward economic pressure at home and abroad.

The business scope of the new headquarters includes the management, research and development, sales and other services for Honeywell's main businesses, including city gas and lifecycle adsorbent, Honeywell informed the Global Times in a written document. 

As the first Fortune Global 500 company to enter Wuhan this year, Honeywell registered a wholly owned subsidiary -- Huosheng Industrial Technology Co in Wuhan -- in March as operator of the headquarters. 

Zhang Yufeng, president of Honeywell China, said that Honeywell and the Wuhan city government have worked together to accelerate implementation of the project at a "difficult time", and Honeywell has talked with the government about how to create a "smart Wuhan", such as by upgrading Wuhan hospitals with advanced technologies. 

"Honeywell's choice to add investment in China at a time when the US government is making trouble for the Chinese economy shows that US companies can't resist the attractions of this huge and growing market," said Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology. 

He told the Global Times that Wuhan's cluster of manufacturing supply chains, plus cheaper land and labor cost, give it a unique advantage in attracting overseas capital, which won't be weakened by the coronavirus assault earlier this year. 

Han Lei, vice president of Siemens China, also told the Global Times that Siemens will continue to expand engagement in digital projects in Wuhan, while strengthening cooperation with local industrial enterprises to build demonstration projects involving digital factories. 

Siemens signed a strategic cooperation agreement with Wuhan in November 2019, and it is looking to support Wuhan's future needs in industrial transformation and smart city construction, Han said. 

Other foreign-invested projects are expected to land in Wuhan later this year, a Wuhan city government official told the Global Times on Wednesday on condition of anonymity.

He said that relevant government departments in Wuhan are using all channels like chambers of commerce to increase the number of overseas projects this year. He also said that Wuhan is carrying out a new round of work on improving its business environment including taxation policy, the legal framework and services. 

But he acknowledged that many overseas companies remain cautious about investing in Wuhan, as market demand and industry chains have not fully recovered. 

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