Global businesses draw confidence from two sessions
Multinationals expand in China amid greater access, opportunities
Published: Mar 10, 2024 09:28 PM
A view of Shanghai, China's major financial hub and destination for foreign investment Photo:VCG

A view of Shanghai, China's major financial hub and destination for foreign investment Photo:VCG

Many multinational companies operating in China have drawn great confidence in their prospects in the Chinese market from the two sessions, where top Chinese officials, national lawmakers and political advisors put a great deal of emphasis on greater efforts to attract foreign investment, including higher-level opening-up. 

In interviews with more than half a dozen foreign companies and business groups, the Global Times found that many multinationals are particularly encouraged by China's pledges to expand market access in more areas such as manufacturing and services sectors, and those to improve the business environment. Foreign businesses are also upbeat about China's overall economic strategy, with focus on high-quality development. 

The growing optimism among global businesses in the Chinese economy also offers a firm rebuttal to a smearing campaign among Western officials and media outlets aimed at discrediting the Chinese economy, as well as their ill-conceived attempts to decouple from and contain China's development. 

"Despite the challenges, Airbus holds an overall positive outlook for China's economy in 2024, especially for the high quality development of the scientific and manufacturing sectors," European plane maker Airbus said in a statement to the Global Times, pointing to a slew of measures in the Government Work Report that aim to support foreign businesses. 

The Government Work Report, which was submitted to the national legislature for deliberation on March 5, outlined efforts to attract foreign investments. For example, all market access restrictions on foreign investment in manufacturing will be abolished, and market access restrictions in services sectors, such as telecommunications and healthcare, will be reduced. Work will also be done to make China a favored destination for foreign investment, according to the report.

At the two sessions, "more favorable policies to encourage domestic consumption, international trade and foreign investment are very welcomed by us, contributing to an optimized business environment and stabilized supply chain, showing positive signals for foreign companies," Airbus said.  

French multinational software company Dassault Systèmes said that China's steady opening-up and its rise in the global industrial, supply and innovation chains have offered new opportunities for multinationals. "Dassault Systèmes is more confident and determined than ever in investing in the Chinese market," Zhang Ying, managing director of Greater China of Dassault Systèmes, told the Global Times.

Overall confidence

In addition to specific measures to support foreign businesses, many multinationals are also confident in China's overall economic development strategies and goals outlined in the Government Work Report. 

According to the report, China will aim for a GDP growth rate of around 5 percent for 2024, launch a year-long program to boost consumption, and accelerate the development of new quality productive forces which will focus on innovation. On innovation, China will step up research on disruptive frontier technologies and launch an AI Plus initiative to boost development in artificial intelligence. 

"The Government Work Report this year established a target for China's economic growth at around 5 percent and outlined specific measures to attain this goal. This signifies the Chinese government's commitment to further stabilize the economy and propel growth," Zhou Xiaolan, executive vice president of Pharmaceuticals Division at Bayer AG, a German life science giant, told the Global Times. 

Zhou said that Bayer has been increasing investments in China in recent years to honor its commitment to the Chinese market. For instance, in 2023 alone, the company inaugurated an Open Innovation Center in Yizhuang, Beijing's Daxing district, the first of its kind in China, established the Beijing plant of Bayer Radiology and started construction for a new supply center in Hangzhou, East China's Zhejiang Province.

French multinational firm Schneider Electric has also been stepping up investment in the Chinese market. In 2023 alone, the company established world-class research and development (R&D) institutions in China, including DP China Hub, China Automation R&D Center, Secure Power Innovation Lab and AI Innovation Lab.

"Looking forward, we expect to establish more R&D institutions and introduce more cutting-edge products and solutions to empower Chinese users and partners, and support them to accelerate the dual-transformation," Yin Zheng, executive vice president of China & East Asia Operations at Schneider Electric, told the Global Times.

Although some Western officials and media outlets are claiming that foreign businesses are leaving the Chinese market, the fact is that more and more multinationals are expanding their presence in China, as the Chinese economy continues to recover and greater efforts are being taken to attract investment. 

In January, foreign direct investment in the Chinese mainland in actual use jumped by 20.4 percent from December 2023, that represented an 11.7 percent drop on a year-on-year basis, according to the Chinese Commerce Ministry. Meanwhile, 4,588 new foreign-invested firms were established across the country, up 74.4 percent year-on-year. Also encouraging is that FDI in the high-tech manufacturing sector soared 40.6 percent year on year in January.

This comes even as some Western countries, particularly the US, have been trying to pressure or even force global businesses away from investing in China, in their ill intention to contain China's economic development. The US, for example, has outright banned US investments in certain Chinese high-tech industries. While the EU has also taken what Chinese officials and experts say are protectionist moves against Chinese products and investments. 

In interviews with the Global Times, many multinational companies have voiced firm support for multilateralism, free trade and mutually beneficial cooperation. 

"The aviation industry is a global industry, a platform that connects people, places, and promotes cultural exchanges around the world. As a global company rooted in Europe, Airbus supports multilateralism and free trade, and advocates win-win cooperation," Airbus said.

FDI into China will likely increase in 2024, as the country takes greater efforts to attract foreign investment, according to experts and businesses. 

"We believe that China will maintain its positive attitude towards foreign companies with the further opening up of the economy and optimization of the business environment. We are also expecting China to take more actions to further stimulate local consumption and boost market confidence," German multinational firm Henkel AG told the Global Times.

Raymund Chao, a member of the 14th National Committee of the Chinese People's Political Consultative Conference, China's top political advisory body, and chairman of PwC Asia Pacific and China, called for more efforts to address various challenges faced by foreign businesses when they try to attract more foreign investment. 

Specifically, Chao said that access to more services sectors such as healthcare, elderly care, financial and telecommunications should be expanded accordingly, among others, according to his proposal to the two sessions shared with the Global Times.