Global companies are expanding in China
Foreign companies operating in China, a long-term thriving part of the country’s economy, are expected to continue investing this year as many countries around the world struggle amid the Russia-Ukraine conflict, high inflation rates and a slowing economic recovery Uncertainties are facing, analysts and business leaders said.
Not only did they describe China as a safe haven for foreign direct investment, they said the country’s efforts to create a unified single market, its sizable middle-income group and reduced negative lists will allow its economy to absorb shocks and maintain a steady growth momentum .
By building a unified domestic market that includes all elements of production and resources — capital, technology and energy — China will further eliminate the obstacles to the rational flow of production factors, said Bai Ming, deputy director of international market research at the Beijing-based company Chinese Academy of International Trade and Economic Cooperation. It will also reduce transaction costs and ensure fair competition, which will encourage domestic and foreign companies alike to invest across the country, Bai said.
The nation’s strength in attracting global capital will continue, he added, and business sectors such as new energy, consumer goods, high-end manufacturing and services will remain hotspots for multinational investment.
Thanks to the country’s complete industrial chains, political support and stable business environment, actual consumption FDI flows to mainland China rose 14.9 percent year-on-year to a record high of 1.15 trillion yuan ($170.43 billion). US dollars) in 2021, according to the study to the Ministry of Commerce.
In addition to opening new stores in smaller cities and making additional investments in apparel and children’s products across China in the coming years, Skechers, a US-based athletic and casual footwear and apparel company, is preparing to build the second phase of its logistics center in Taicang begin in Jiangsu province and will begin operations at its new China headquarters in Shanghai in the second half of the year.
“We are confident in the Chinese market,” said Willie Tan, CEO of Skechers China, South Korea and Southeast Asia. The company will continue to strengthen its diversified product lines for all ages to meet the needs of different consumers as China has become the cradle of promoting “numerous new consumption scenarios, products and services in sports and health industries,” Tan said.
Vivian Tu, head of marketing at Philips Domestic Appliances Greater China, said that the home appliance sector, which is somewhat boosted by work-from-home trends related to the COVID-19 pandemic, will have the potential to grow more than before and seeing new opportunities in China, as consumer demand has become more diversified and personalized.
“We will expand the research team at our innovation center in Suzhou, Jiangsu Province to focus on advanced technologies such as robotics, IoT and artificial intelligence over the next five years. This will bring new impetus to the home appliance industry for the development of digitization and intelligence,” Tu said.
Bai Wenxi, chief economist at IP Global China, said China has improved the competitiveness of its industrial chains in the face of fierce competition in Southeast Asia in labor-intensive manufacturing sectors. Its ability to attract global capital has been further strengthened by expanding the opening-up policy and implementing equal treatment for foreign-funded enterprises.
Rajat Agarwal, President of Henkel China, a German chemical and consumer goods manufacturer, said: “Looking ahead, China will continue its transformation towards high-quality growth and drive progress toward its dual-carbon goals. We see strong future demand in the packaged food, home improvement, automotive and electronics sectors, and Henkel will continue to support our customers and consumers with impactful innovations.”
Henkel resumed production in Changchun, Jilin province on April 15, manufacturing products for key industries such as metal, automobile and rail transportation. The two Shanghai plants have been “white-listed” to resume closed-loop production and expand production capacity, conditions permitting.