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A Robust Investment Destination: Foreign investors' confidence in China is on full display (3)

By Zhou Xiaoyan (Beijing Review)

09:11, September 19, 2012

"Air Products has been doing business in the Chinese market for 25 years," said Matthew Mao, Vice President of Air Products China. "In the first 20 years, we invested 5 billion yuan ($793.65 million) and another 10 billion yuan ($1.59 billion) in the last five years. That's a testimony of the impact attending CIFIT brings."

On September 4, Amway, an American direct-selling multinational and a member of the AmCham South China, announced that it would invest 667 million yuan ($105.25 million) to establish a facility to produce nutrition supplement products in Guangzhou, Guangdong Province and a botanical research center in Wuxi, Jiangsu Province. The center will conduct R&D to bring the essence of traditional Chinese medicine through cutting-edge research techniques into a wide range of products for the international market.

China is Amway's largest market. The 667-million-yuan ($105.25-million) investment will focus on improving production ability and R&D to forge a solid foundation for our sustainable and long-term development in the Chinese market, said Yan Zhirong, President of Amway Greater China.

Due to rising labor costs and limited land resources in China, some multinationals chose to relocate their factories to Southeast Asian countries where costs are lower. But Roland Decorvet, Chairman of Nestle S.A. Greater China said that Nestle has never considered doing so.

"We never move factories just because labor cost increases. Now we are focusing on China and there will be many more factories in China for its 1.3-billion population. Our market is not 1.3 billion people, but 1.3 billion stomachs," he said.

In September 2011, the Swiss-based food giant acquired a 60-percent stake of Yinlu Food Group, a Xiamen-based private food company known for its ready-to-drink peanut milk and ready-to-eat canned rice porridge.

"China has very good development in almost every aspect," said Decorvet. "Nestle is quite optimistic about the Chinese market." Despite the slowdown of economic growth in the country, the sales volume from January to August has increased and Nestle China remains profitable, said Decorvet.

In the next three to five years, the sales volume of Nestle will reach $10 billion in the Chinese market, which will make China Nestle's second largest market in the world.

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