The first half of 2023 has seen a surge in confidence among foreign investors in the Chinese market, as several prominent multinational companies make significant investments in various industries.
BMW Brilliance Automotive, the joint venture between BMW Group and China, announced its plan to commence the production of next-generation electric vehicle (EV) models in Shenyang, Liaoning province, by 2026. To support this endeavor, they broke ground for a 10-billion-yuan ($1.39 billion) plant dedicated to manufacturing BMW’s sixth-generation high-voltage batteries for these new EV models.
In another instance, German industrial giant Siemens revealed its intentions to boost its investments in China, allocating an additional 1.1 billion yuan in fixed-asset investment for its industrial automation products smart manufacturing base in Chengdu, Sichuan province.
Likewise, multinational pharmaceutical company AstraZeneca signed an agreement with Qingdao high-tech industrial development zone in Shandong province to expand its production and investment in China. AstraZeneca will establish a regional headquarters in the city and build an innovation center focusing on rare disease diagnosis and treatment.
China has emerged as an attractive destination for foreign investment, underscored by impressive numbers in the first five months of the year. The actual use of foreign direct investment (FDI) in the Chinese mainland reached 574.81 billion yuan during this period. Additionally, 18,532 new foreign-invested enterprises were established, registering a notable 38.3 percent year-on-year growth.
Foreign government officials, international organization leaders, and executives from multinational corporations have frequently visited China this year. They actively participate in trade fairs and explore collaboration opportunities with Chinese enterprises, showcasing their confidence in China’s economic prospects and the urgency to strengthen cooperation.
The manufacturing industry witnessed a 5.9 percent growth in FDI, reaching 147.08 billion yuan in the first five months. High-tech industries also experienced a positive trend, with a 7.5 percent year-on-year increase in FDI, and high-tech manufacturing surging by 30.8 percent.
Foreign companies’ satisfaction with China’s policies aimed at boosting foreign investment is evident, as shown by a survey conducted by the China Council for the Promotion of International Trade, covering over 600 foreign-invested firms. A striking 97 percent of respondents expressed contentment with these policies, implemented from the fourth quarter of the previous year to the present.
China’s appeal as a destination for foreign investment is further underscored by the State Administration of Foreign Exchange’s estimation of a 9.1 percent return rate on foreign investment over the past five years, surpassing that of Europe and the United States, which stands at about 3 percent.
Amid a global economic slowdown, China’s position as a super-large market with immense domestic demand potential becomes even more pronounced. With its emphasis on high-quality development and ongoing upgrades in energy, industrial, and transportation infrastructure, China presents abundant opportunities for transnational investment.
Companies like Panasonic Corporation have shown confidence in China’s green and low-carbon development, evidenced by their investment in zero-carbon factories, with plans to increase their number to 16 by 2024. Similarly, Volkswagen Group is establishing a new R&D company in China, focusing on advanced EVs and intelligent networked vehicles. The company’s leadership believes that China is at the forefront of the EV transition, and they predict a substantial growth in the automobile market with a high penetration of new energy vehicles.
China’s Ministry of Commerce has actively engaged with foreign-invested firms through roundtable discussions to address business concerns and ensure long-term and stable development for these enterprises. Additionally, various regions across China are proactively optimizing the business environment to attract and efficiently utilize foreign investment.
With its stable social environment, vast investment prospects, and attractive returns, China continues to be an alluring destination for global enterprises. As China embarks on its journey towards modernization, it is committed to opening its doors wider, offering an improved business environment and better services, leading to increased foreign enterprise participation and fruitful collaborations in the foreseeable future.