Letter from China: How multinationals navigate China's dynamic market

SHANGHAI, March 28 (Xinhua) -- This year is the Year of the Dragon, a creature often associated with positive attributes such as prosperity, vitality and courage in Chinese culture.

Interestingly, as a business reporter, I have observed that these three attributes also resonate with the characteristics of multinational corporations looking to become competitive in the Chinese market.

For Apple CEO Tim Cook, March has heralded fresh opportunities for the company's business in China, its second-largest market globally. Last week, Cook opened Apple's biggest retail store on the Chinese mainland in downtown Shanghai, celebrating the achievement in front of a large crowd of Apple fans.

During Cook's visit, Apple held a sharing session with its key Chinese suppliers. And earlier this month, the U.S. tech giant announced that it will expand its applied research lab in Shanghai and establish a new lab in Shenzhen later this year.

"There's no supply chain in the world that's more critical to us than China," Cook said last week, hinting at his focus on China despite continuing geopolitical tensions.

Apple's steadfast commitment to the Chinese market is indicative of a broader trend among multinational corporations, I learned from the American Chamber of Commerce in Shanghai (AmCham Shanghai), which boasts a membership of 2,800 individuals across over 1,000 companies.

Eric Zheng, president of AmCham Shanghai, told me in a recent interview that despite uncertainties brought by the current geopolitical environment, the chamber's member companies continue to see China as a strategic market for long-term success. He noted that China is still very competitive from a manufacturing standpoint, and many member companies continue to see China as the ultimate market.

This year marks the 45th anniversary of the establishment of China-U.S. diplomatic relations. Since 1979, a stable diplomatic relationship has been crucial to the prosperity of the two countries, as well as to global peace and stability. U.S. businesses have also flourished in commercial relations between the two countries.

Zheng and his dedicated team are actively preparing a gala that will be held this week to commemorate the anniversary. It will feature speeches by member companies that have witnessed the evolution of the relationship between the two countries.

"There are new challenges to be managed. We continue to believe that growth is here, so our member companies are here to stay for the long term," he said.

Unlike AmCham Shanghai's member companies, which are most concerned with geopolitical tensions, German companies in China see competitiveness as a key issue, according to AHK Greater China, an official institution promoting Germany's foreign trade in the region.

"China is so advanced in many areas, not only e-commerce, telecommunication, but also in technological areas. So if you are not in China, you will lose global competitiveness. If you are not able to compete here, you might have big challenges in the rest of the world," said Maximilian Butek, chief representative of the Delegation of German Industry and Commerce Shanghai.

A recent business confidence survey conducted by the German Chamber of Commerce in China echoes Butek's perspective. Among the 566 member companies surveyed, 91 percent said they intend to continue their operations in China, and 54 percent said they are considering increased investment.

Coach, Atlas Copco Group, Align Technology, AVEVA — I could list dozens of foreign companies I interviewed recently that continue to look to China as a viable and vital market.

Indeed, the market's landscape has evolved significantly from 20 or 30 years ago, when success was often achieved simply by introducing new products to China. Today, foreign companies are strategizing how to bolster their market presence and enhance their strength in the country.

The collective insights of various chambers of commerce and multinational corporations paint a true picture of what it is like to conduct business in China at present. Despite challenges, the Chinese market's rapid development pace, innovation and scale continue to be irresistible to foreign businesses. The keys to success in China are innovation, adaptability and commitment to investing in the market's long-term vibrancy and potential.