Multinational invest in China for high-quality development and business opportunities

Multinational corporations remain adamant about ramping up investment in the Chinese market as a result of the country's stepped-up efforts to shore up economic growth and push continuous progress in expanding opening-up, said business leaders and experts. Many opportunities come from China's latest policy measures, such as advancing high-standard opening up in cross-border service trade and investment, and deepening reform in areas including the State-owned enterprises, digital economy, intellectual property and government procurement, as well as efforts to remove all restrictions on foreign investment access in the manufacturing sector, they said.

Highlighting China's massive market, well-developed industrial system and strong supply chain competitiveness, Ding Hongyu, senior vice-president of 3M Co and president of 3M China, said that the US company will ramp up investment at its plant in Jinshan district, Shanghai, to further expand the structure adhesive capacity later this year, and work on localized production for its health care area, expecting to achieve mass production in the years ahead.

"The Chinese economy has shifted from high-speed growth to high-quality development. We will take advantage of emerging trends and focus on end markets where we can win," he said, adding that investing in fields such as automotive electrification, home improvement and consumer electronics all represent significant opportunities for 3M. Leser GmbH & Co KG, a German safety valve manufacturer, has also been heading in that direction, the Hamburg-based group said that it will expand its market share in the country's food and pharmaceutical industries to maintain robust growth in the coming years.

China's supportive policies will further incentivize foreign companies to extend their business activities within the country. The country's opening-up measures will continue to push global companies from the high-end manufacturing sector to further transform traditional industries with smart manufacturing technology, said Tim Jiang, general manager of Leser's China branch. Bridgestone Corp, the Japanese tire and rubber manufacturer, also plans to build more partnerships with domestic automakers and supply customized tires for China's fast-growing electric vehicle market during the country's 14th Five-Year Plan period (2021-25).

"We look forward to the Chinese market as a growing market and will focus on premium niche areas. The increasingly optimized business environment and strong market demand will effectively promote China's economic growth,” said Agustin Pedroni, president and CEO of Bridgestone (China) Investment Co Ltd. The foreign direct investment used in China's manufacturing sector amounted to 262.41 billion yuan in the first three quarters of 2023, representing a 2.4 percent increase on a yearly basis, with high-tech manufacturing seeing a growth of 12.8 percent year-on-year, data from the Ministry of Commerce showed.

China's current strength lies in its leading position in several crucial technological innovations with promising prospects for the future. This is a positive development for the country's manufacturing sector, said Pan Yuanyuan, an associate researcher at the Chinese Academy of Social Sciences' Institute of World Economics and Politics in Beijing.

Rather than solely focusing on attracting foreign investments to establish more factories, China's continuous industrial upgrade and commitment to environmental sustainability will enhance the country's competitive advantage, said Cui Fan, a professor of economics at the University of International Business and Economics in Beijing.

"This will, in turn, create a favorable environment for foreign businesses to invest across diverse sectors, such as digitalization, high-tech manufacturing and innovation,” he said.

That sentiment is in line with the latest data. China saw newly established foreign-invested enterprises reach 37,814 between January and September, a year-on-year increase of 32.4 percent, according to the Ministry of Commerce.

Regarding the source of foreign investment, France, the United Kingdom, Canada, Switzerland and the Netherlands saw actual investments in China grow by 121.7 percent, 116.9 percent, 109.2 percent, 76.9 percent and 32.6 percent, year-on-year, respectively.

Upbeat about the Chinese market, Rituals Cosmetics, the Netherlands-based home and body cosmetics brand, will open 10 brick-and-mortar stores in the Chinese mainland by the end of 2024, with the goal of expanding its market share, said Raymond Cloosterman, Rituals' founder and CEO.

After establishing more than 1,000 stores in other parts of the world, mainly in Europe, the Dutch company ventured into the Chinese mainland by inaugurating its first store in Shanghai in late September. It is scheduled to open two more stores, one in Shanghai and another in Nanjing, Jiangsu province, by the end of this year.