China's opening-up measures, carbon-neutrality commitments and fast-growing trade in services will all motivate multinational corporations to increase their investments in the country, so as to profit from the potential of its vast domestic market, said heads of foreign business chambers, corporate executives and academics.
China's purchasing power, cost effectiveness and supply chain reliability are persuading an increasing number of MNCs that are keen to stay competitive, to look at areas like green growth, healthcare, high-end manufacturing, trade in services and cross-border e-commerce businesses.
As China continues to press ahead with industrial innovation, and promote multilateral trade initiatives and pilot free trade zones, many MNCs are seeking to reorient their role in the country's new growth pattern, underscoring their long-term confidence in operating in China, said Cui Fan, a professor of economics at the University of International Business and Economics in Beijing.
With China planning to reach its targets of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060, British companies have been supporting China's carbon markets and driving down the cost of offshore wind energy, said John Edwards, UK trade commissioner for China.
"Hydrogen is another area with high-growth potential for bilateral collaboration," he said, noting a significant number of UK companies have already built a presence in this field in China.
Jens Hildebrandt, chief representative of the Delegation of German Industry and Commerce in Beijing, said: "The Chinese market is of paramount importance to many German companies ... German companies expect growth in most industries, especially in fields like decarbonization, e-mobility and connected driving."
Similar views were expressed by Roberta Lipson, vice-chair of the Board of Governors of the American Chamber of Commerce in China. Lipson said China's new opening-up policies have won support from US business leaders and the country will create a better environment for high-quality economic growth in wide-ranging areas such as culture, science and technology.
Over 99 percent of the surveyed foreign companies are confident that China's economy will fare well in 2023, and 98.7 percent said they would maintain and expand their investment in China, according to a report released by Beijing-based China Council for the Promotion of International Trade last month.
As the economy continues to recover, the Chinese market will bring more and better investment opportunities to global companies in 2023, said Zhang Xiaoyu, president for China at Arkema SA, a French manufacturer of specialty materials.
"With China further optimizing its COVID-19 control policies and vowing to make greater efforts to maintain steady foreign investment growth, we remain confident and ready to contribute to the development of local industry," she said.
Bostik, one of Arkema's subsidiaries, announced last month it will increase its investment by 400 million yuan ($59.6 million) in new businesses and innovation in Shanghai, Zhang said.
China has placed high priority on strengthening capacity for innovation, and on promoting the transformation and upgrade of its manufacturing and services sectors. It has been able to achieve groundbreaking innovation broadly across various sectors, particularly in digitalization and smart manufacturing, said Kilian Aviles, senior vice-president for APAC at Dekra SE, a German testing, inspection and certification group.
Even though the COVID-19 pandemic and the downward economic pressure posed challenges to the global economy in recent years, the actual use of foreign direct investment in the Chinese mainland expanded 9.9 percent year-on-year to 1.16 trillion yuan during the January-November period of 2022, data from the Ministry of Commerce showed.