Attracting foreign investment sets a record for China to win another "vote of trust" (international discourse) Chemical | Company | Attracting foreign investment
The picture shows Tianjin Port's fully IoT container terminal. Photo by Zhao Zishuo, journalist from Xinhua News Agency
The United Nations Conference on Trade and Development recently released the 2023 World Investment Report, which showed that China's foreign direct investment attracted increased by 5% in 2022, reaching a record high of 189.1 billion US dollars. In this regard, foreign media believe that against the backdrop of multiple challenges facing the world economy, China's attraction of foreign investment has grown against the trend, indicating the enormous attractiveness of the Chinese market and once again indicating that the world has cast a "vote of confidence" in the Chinese economy.
Foreign companies increase investment to expand their business in China
The report released by the United Nations Conference on Trade and Development shows that in 2022, global foreign direct investment decreased by 12% compared to the previous year due to factors such as the escalation of the Ukrainian crisis, high food and energy prices, and soaring public debt. Among them, foreign direct investment flowing into developed economies decreased by 37%. Compared to this, foreign direct investment flowing into developing countries increased by 4%. China's attraction of foreign direct investment continues to steadily increase, reaching a record breaking $189.1 billion.
In 2023, China's attractiveness to foreign investment remains strong. According to data released by the Chinese Ministry of Commerce in May, the actual amount of foreign investment used by China from January to April this year was 499.46 billion yuan, a year-on-year increase of 2.2%. Among them, the manufacturing and high-tech industries performed outstandingly, with year-on-year growth of 4.1% and 12.8%, respectively. The news agency reported that in 2022, the Chinese Ministry of Commerce revised the "Catalogue of Industries Encouraging Foreign Investment" to further expand the investment areas of interest to foreign investors. China aims to attract more overseas funds by relaxing regulations, introducing preferential measures, and further opening up the market.
Numerous foreign companies have also voted with their feet, demonstrating their confidence in the Chinese market through practical actions such as expanding their business and increasing investment in China. The 2023 White Paper on China's Business Environment released by the American Chamber of Commerce in South China shows that China is the most favored land for corporate investment, with over 90% of surveyed companies considering China as one of the most important investment destinations.
According to a recent report by the Nikkei Asia Review, the head of the most powerful technology company in the United States, Luo Yi, has been conducting activities in Beijing since the beginning of this year. The attention of the US technology industry to China indicates the importance of China to American high-tech companies.
The website of the German newspaper "Business Daily" recently reported that German small and medium-sized enterprises still hope to continue investing in China. The report takes Wells, a metal processing company headquartered in Hagen, Germany, as an example. The company has been operating near Shanghai since 2014 and expanded its existing factory in 2020. Currently, approximately 13% of Wells Inc.'s revenue comes from Asia. Yunius, the managing partner of the company, believes that China is an "attractive place" and will also be one of the most important growth regions in the next 10 years.
The Business Daily pointed out that many entrepreneurs share the same view as Yunius. A recent study shows that about 26% of German small and medium-sized manufacturing enterprises are considering relocating their production capacity from Germany, with 40% of companies shifting to Asia and 15% explicitly indicating a shift to China; Among larger enterprises with over 1000 employees, 36% hope to transfer production to other locations, with 60% planning to move to Asia and 23% planning to move to China. A recent survey by the German Chamber of Commerce in China confirmed that German companies still hope to increase their investment in the world's second largest economy.
Bloomberg noted that many French companies, from Louis Vuitton to Orient, have also chosen to continue deepening their presence in the Chinese market.
Continuous economic growth and strong attraction in China
Analysis suggests that foreign investment in China has benefited from its huge market size, sound industrial system, and abundant talent reserves, reflecting the continuous optimization of China's business environment and the increasing level of investment facilitation.
The first quarter 2023 research report on China's foreign investment business environment released by the China Council for the Promotion of International Trade shows that 97% of foreign companies surveyed rated the foreign investment policies introduced by the Chinese government since the fourth quarter of last year as "satisfactory" or above; The satisfaction rate with indicators such as obtaining financial services, resolving commercial disputes, and market access exceeds 80%.
The New York Times pointed out in an article that for German companies, development in China is crucial. German chemical giant BASF's executive board chairman, Bo Mule, said that doing business in China can effectively offset the impact of high energy costs in Europe. "Without China, the restructuring required by the company would have become impossible."
The German newspaper Business Daily quoted Thomas Ernst, a senior executive at German machinery manufacturer Junpu Intelligence, as saying that cost is not the only reason to expand production in China. In China, projects can be pushed forward faster and well-trained engineers can be found more quickly. Junpu Intelligent Company's sales mainly come from the automotive industry, and the growth of this industry mainly comes from China. Five years ago, the number of employees of the company in China was 50, but now it has increased to about 500, and it is expected that this number will continue to increase.
Mohammad Luta, President and CEO of the Dubai Chamber of Commerce, believes that China's economic growth foundation is solid, supported by a strong manufacturing and talent pool, which is crucial for innovation. China has complete infrastructure and strong financial technology capabilities, with rapid development in cutting-edge technologies such as artificial intelligence and the Internet of Things. These competitive advantages are attractive to foreign enterprises.
According to the 2023 World Investment Report, foreign direct investment flowing into China is mainly concentrated in the manufacturing and high-tech industries, with most of the investment coming from multinational enterprises in Europe. Faced with the complex world economic situation, China is continuously enhancing its innovation leadership role, striving to develop new industries and formats, and a series of practical measures to promote high-quality development, which have made more and more foreign-funded enterprises optimistic about the long-term development prospects of the Chinese economy.
Bloomberg reported that China is launching a charm offensive to attract foreign investment and has introduced a series of measures to open up free trade zones. According to a document released by the Chinese State Council on June 29th, the government will implement a series of new rules in eligible free trade zones or ports. In response, Fan Limin, Chief Asian Economist at HSBC Holdings in Hong Kong, believes that the new measures will help overseas companies in the free trade zone "conduct financial activities more smoothly", which sends a signal to the foreign investment community that China is gradually increasing its opening-up efforts. In addition, Bloomberg also noted that Chinese leaders have made speeches in recent weeks about China's commitment to openness, promising to protect and welcome foreign investors.
Promising development prospects, providing more opportunities
As Jeff Massa, Chairman and CEO of multinational medical company Medtronic, said, "Each project is a 'vote of confidence' we have invested in the Chinese market." The influx of foreign executives and continuous investment in China demonstrates our confidence in the prospects of China's economic development.
Lebedev, director of Russia's Great Asia Television, noted that Chinese President Xi Jinping had stressed in his New Year's message in 2002: "China's economy is resilient, has great potential and is full of vitality, and the fundamentals of long-term improvement remain unchanged. As long as we are confident and seek progress in stability, we will certainly be able to achieve our set goals." Lebedev believes that China's economy has the ability to resist pressure, full of vitality and energy.
Recently, international institutions such as the International Monetary Fund, the World Bank, and the Organization for Economic Cooperation and Development have raised their expectations for China's economic growth in 2023. The World Bank predicts that the Chinese economy will grow by 5.6% in 2023, while the OECD predicts a growth of 5.4%. Both major institutions believe that China will bring impetus to the development of the world economy.
The Wall Street Journal website reported that the 14th Summer Davos held in late June demonstrated confidence in China's economic development. The website reported that Chinese Premier Li Qiang stated at the Summer Davos Forum that China has the potential and space for further development. In addition, Li Qiang reiterated China's opening-up policy and called on all countries to further establish the concept of win-win cooperation and work together to address global challenges. According to reports, the Chinese government has been working hard to attract overseas capital to invest in China. The Chinese State Council recently announced that it will introduce more stimulus policies to drive economic growth.
Foreign media also believe that this summer's Davos Forum highlights the message that China welcomes foreign investors and entrepreneurs. The world has received an important signal that China is returning to the path of economic recovery.
Bernard de Witt, Chairman of the Belgian China Economic and Trade Commission, stated that China provides important support for the operation of global industrial and supply chains. This year, China's economic growth prospects are promising and will further contribute to global economic recovery.
Annie Richards, CEO of Fidelity International, said in an interview with Nihon Keizai Shimbun recently that "China can provide a lot of things for the global economy". For example, China is now a leader in the development of electric vehicles and solar panels; China's role in the renewable energy supply chain makes it a key player in energy transformation.
The international community generally believes that in the future, China will continue to provide more market opportunities, investment opportunities, and growth opportunities for the world through its own development. The International Monetary Fund calculates and analyzes that for every 1 percentage point increase in China's economic growth rate, it will drive the growth rate of economies associated with China to increase by 0.3 percentage points. The president of the organization, Georgieva, said that it is expected that China's contribution to global economic growth will reach about one-third this year.
People's Daily Overseas Edition
