BEIJING: China’s wide appeal for multinational corporations will continue due to its robust domestic market and its unwavering dedication to opening up its economy, despite a globally subdued investment sentiment, said analysts and heads of foreign chambers of commerce in China.
Participating in various events during the 2023 China International Fair for Trade in Services, which concluded on Wednesday in Beijing, they noted that there has been a quantity-to-quality shift in the inflow of foreign investment into the country. This transformation, they said, is aligned with China’s pursuit of high-quality development that aims to generate more growth opportunities in sectors such as trade in services and high-end manufacturing.
Jens Hildebrandt, executive director of the German Chamber of Commerce in China (North China), said that despite the impact of geopolitical tensions on global business confidence, foreign investors will continue to have confidence in China’s economic growth in the long run.
The previous cooperation model is changing, he said, referring to the fact that German companies provided technology to China in the past and tremendously benefited from the Chinese market. But now, China has strong brands and high-end technologies, which are successfully penetrating both the German and European markets, especially in the decarbonization and healthcare sectors.
Highlighting that German investment in China is currently concentrated in the industrial sector, Hildebrandt said that with China gradually opening up its services industry, German companies will have more access to the Chinese market in the coming years. As the global economy is dealing with a sluggish recovery and cross-border investment remains lackluster, China has intensified efforts to boost its foreign investment inflow, unveiling 24 targeted policy measures in mid-August.
The authorities pledged to ensure that foreign businesses receive the same treatment as their Chinese counterparts and enjoy the nation’s stronger fiscal support and tax incentives.
The policy rollout will boost the confidence of multinational corporations in conducting long-term operations in China and, therefore, play a pivotal role in revitalizing global cross-border investment, said Loh Wee Keng, chairman of the Malaysian Chamber of Commerce and Industry in China. As China’s traditional advantage of low labor and rental costs diminishes, some foreign manufacturers, especially those from low value-added industries, have chosen to exit the market. Concurrently, many high-tech companies are eagerly entering the Chinese market to capitalize on opportunities associated with industrial upgrading, said Nie Pingxiang, a research fellow with the Beijing-based Chinese Academy of International Trade and Economic Cooperation. –The Daily Mail-China Daily news exchange item
