Firms bullish on scope of China market

By Liu Zhihua (China Daily) 08:51, October 23, 2023

Executives, experts say FDI-friendly policies bolstering business potential

Multinational enterprises are unwaveringly committed to the Chinese market and will keep investing in China, as the country's pursuit of high-quality development and Chinese modernization are set to offer them more development opportunities, according to business executives and experts.

The Chinese market has provided a conducive environment for growth of multinational enterprises. As it steps up efforts to expand high-level opening-up, more business potential is unfolding for foreign investors, especially those in high-tech and advanced manufacturing sectors such as electronics, healthcare and life sciences, they said.

Allan Gabor, president of science and technology company Merck China, said he believes in the marvelous "China speed" and the country's growth momentum, which is driven by unremitting efforts to embrace high-quality development through the Chinese path to modernization.

Over the past decade, Merck has invested nearly 6 billion yuan ($820 million) in China. The country is the company's second-largest market worldwide, with approximately 3 billion euros ($3.18 billion) in sales last year.

Merck has invested about 70 million euros to increase its high-purity reagent production capacity and to expand its Nantong Life Sciences Center in Jiangsu province, which is expected to begin operations in 2026.

It has also announced its "Level Up" growth plan to further invest at least 1 billion yuan in China by 2025 to enhance localized manufacturing, technology and supply chain capabilities in the electronics sector.

"Despite the uncertainties and challenges in the post-pandemic era, China insists on embracing foreign direct investment and is continuously rolling out measures and policies that facilitate multinational companies to deepen their footprints in the country. In my opinion, that practical approach is the precious certainty in an uncertain world," Gabor said.

In its unique path to modernization, China has increasing needs in healthcare, high-quality food and drugs, solutions on environmental protection and the digital economy, and Merck is in a "sweet spot to continuously contribute with its innovative products and services", he added.

Will Song, global senior vice-president of Johnson &Johnson and chairman of the healthcare company's China division, said the Chinese market is increasingly becoming an important growth engine and innovation hub in the company's global business portfolios, and its long-term commitment to the Chinese market remains unchanged.

"We are pleased to see that China strives to create a first-class business environment that is market-oriented, rules-based and internationalized, making greater efforts to attract foreign investment, and continuing to promote high-level opening-up," Song said.

He said his company believes that China's high-quality economic development will bring many diverse opportunities for multinational enterprises, and it looks forward to the country's further opening-up as well as its continuous emphasis on and recognition of innovation values.

"With its market size, economic resilience and population, China remains an important strategic market in Johnson &Johnson's global business portfolio, and we are here for the long term," he added.

The number of newly established foreign-invested enterprises in China reached 37,814 in the first three quarters, up 32.4 percent year-on-year, data from the Ministry of Commerce showed on Friday.

The structure and quality of foreign direct investment saw much improvement, even though FDI into the Chinese mainland in terms of actual use dropped 8.4 percent year-on-year to 919.97 billion yuan over the period, according to the data.

FDI used in China's manufacturing sector amounted to 262.41 billion yuan during the January-September period, with an increase of 2.4 percent year-on-year. High-tech manufacturing saw remarkable growth of 12.8 percent year-on-year.

Justin Yifu Lin, dean of Peking University's Institute of New Structural Economics, said that the Chinese economy, with strong endogenous strength from factors such as an enormous domestic market and increasing innovation capability, is well poised to rebound and show dynamic growth, making great contribution to global economic growth.

Lin, who is a former senior vice-president and chief economist of the World Bank, expects the Chinese economy to grow 5.5 percent — or even 6 percent — this year, and it will continue to be a key driver of global growth.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said that as China's economic recovery is gathering pace, consumption rebound and improvement in cross-regional development coordination will create a more conducive environment for foreign investors in China.

Zhou said he believes that China will become more attractive to foreign investors, especially for those in the manufacturing and producer services sectors, considering the country's efforts to remove all restrictions on foreign investment access in the manufacturing sector and its strengthening growth momentum in high-tech fields.

Leon Wang, executive vice-president of biopharmaceutical company AstraZeneca and president of AstraZeneca China, told China Daily earlier that the company hopes to contribute to the high-quality development of the Chinese economy.

AstraZeneca will further deepen its market presence in the country through its regional-headquarters strategy, while supporting local economic development and driving dual-circulation development, he said.

Zhang Fei, associate director of the Chinese Academy of International Trade and Economic Cooperation's Institute of Foreign Investment, said she expects more government moves to increase FDI inflows and improve FDI structure.

Sectors such as automobile manufacturing, medical equipment and aerospace have great potential to boost FDI in China, she said.

(Web editor: Tian Yi, Liang Jun)


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