Foreign firms expand footprints in China amid swift recovery, further opening up

While global investments succumbed to the COVID-19 pandemic's economic fallout, international companies are upping their ante in China due to the country's head start in business recovery and unwavering commitment to opening up.

Foreign direct investment into the Chinese mainland, in actual use, stood at 535.65 billion yuan (about $78.4 billion) during the first seven months of this year, up 0.5 percent year-on-year, reversing the decline reported in the first half of the year, official data showed.

A bevy of leading global firms like lift equipment manufacturer JLG, Uniqlo and Nestle have announced or made new investments in China this year, while many others reported robust earnings in the country compared with other regions.

"We have confidence in the Chinese market," said Jack Liu, general manager of Goodrich Aerostructures Service (China) Co Ltd. "Given China's swift economic rebound, the aerospace maintenance industry chain will quickly be rolling again."

The airplane maintenance services provider based in North China's Tianjin Municipality, a subsidiary of the North Carolina-headquartered aerospace products supplier Collins Aerospace, has seen sales revenue jump 17 percent in the first half of this year, while its workforce grew by 11 percent.

"We were able to tide over the COVID-19 crisis and attain revenue growth because we resumed our operations fast, despite the huge blow to the aerospace maintenance sector in the Asia-Pacific region and the rest of the world," said Liu. The company fully restored business activities in early March.

Building on effective containment of the COVID-19 outbreak, China has rigorously advanced business and production resumption for foreign firms and domestic ones alike, ensuring the supply of epidemic prevention gears and slashing certain fees like social security contributions.

Official data showed that 66.9 percent of nearly 9,000 key foreign-invested companies had restored over 70 percent of capacity by late March.

"Having successfully managed the effects of the COVID-19 pandemic with the support of the Chinese authorities, Nestle has decided to increase its investments in China which is another clear demonstration of our long-term commitment and confidence in the country," said Rashid Qureshi, chairman and CEO of Nestle Greater China Region. The company announced new investments of over 730 million yuan to enhance its product portfolio in late May.

Under existing efforts like shortening the negative list for foreign investment and protecting interests of foreign firms based on laws and regulations, China has cultivated an increasingly favorable business environment.

With assistance from local authorities, Goodrich Aerostructures Service (China) Co Ltd was able to install autoclaves, massive processing devices that weigh almost 100 tons each, using around half of the average time it would take in the industry, according to Liu.

Local customs has reduced the duration for entry and exit of items requiring maintenance from three days to a few hours, said Liu, adding that the improvement could save the company around 1 million yuan per year.

"We will increase our investments in China, since the country will take up a larger share in the global aerospace maintenance market as its economy grows," said Liu.

Liu's view was echoed by many of the over 100 US companies across sectors polled by the US-China Business Council in its latest survey. Nearly 70 percent of the surveyed companies said they were optimistic about the commercial prospects of the Chinese market, and 87 percent reported no plans to shift production out of China.

China has pledged to open wider to the outside world during the 2020 China International Fair for Trade in Services concluded Wednesday, announcing decisions to roll out a negative list for cross-border trade in services and further ease market access for the sector.

"China is wise to continue its opening up ... And the world has benefited greatly from China's opening up," said William Jones, Washington bureau chief of the US publication Executive Intelligence Review.