Foreign firms show faith in China market

Workers assemble a vehicle at Tesla's Shanghai factory. [Photo/China Daily]

Executives say nation maintains its appeal amid gloomy global outlook

As China's industrial upgrade gains momentum, the country will play a bigger part in stabilizing global supply chains, just as it did amid three years of COVID-19 disruptions, which will facilitate the smooth running of the world economy, global business leaders said.

Boasting a complete supply chain support system, strong logistics, a big market and favorable government policies spurring innovation, China holds great appeal for multinationals amid headwinds such as a gloomy global economic outlook, they added.

Deuk-kyu Hwang, president of Samsung Greater China, said "With a complete supply chain support system, China is well positioned to cope with global uncertainties."

Hwang said the consumption upgrade of China's middle-income group, and technological innovation spurred by the government's new infrastructure initiatives in big data, artificial intelligence and 5G will generate new demand in the nation's domestic market.

"In the future, Samsung will continue to prioritize development in China's large market," he added.

As the world's largest manufacturing nation, China ranks first globally in terms of output for more than 40 percent of the world's 500 major industrial products, which has enabled the country to produce goods in urgent need globally amid the COVID pandemic, according to the Ministry of Industry and Information Technology.

Denis Depoux, global managing director of consultancy Roland Berger, said with the optimized COVID-19 containment measures, the winter of 2022-23 to a certain extent could "see a replay of the 2021 situation when China's supply chain supported the economic recovery in Europe and in the US, because of its flexibility and availability".

He said that China's supply chains have improved, as Chinese and foreign companies invested heavily in modernizing their local production systems, especially in 2021 when most of the global manufacturing sector was still badly hit by disruptions related to the pandemic.

Such an investment trend continues, with global business leaders increasingly valuing China's roles as a vast market and crucial part of global supply chains.

Caroline Wu, managing director of Maersk China, a country branch of Danish shipping and logistics services provider A.P. Moller-Maersk, said, "We will continue to invest in China, contributing to Shanghai's position as a global leading shipping and logistics center."

Maersk announced in late December that it will build its flagship logistics center in China with a total investment of $174 million. The project, located in the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone, is expected to become operational in the third quarter of 2024.

Liu Wenqiang, deputy head of the China Center for Information Industry Development, based in Beijing, said that as China strengthens its research and development prowess, it will continue moving up the industrial value chain, which will increase its appeal in terms of high-end manufacturing and further help safeguard the stability of global industrial and supply chains.

Progress is already evident. Last year, the actual use of foreign direct investment in China's high-tech industries surged by 28.3 percent year-on-year, faster than the overall 6.3 percent growth rate for foreign capital use, according to the Ministry of Commerce.

Meanwhile, the export value of China's technology-intensive mechanical and electrical products and high-tech goods rose to 12.8 trillion yuan ($1.9 trillion) and 6.3 trillion yuan respectively in 2021, up from 7.4 trillion yuan and 3.8 trillion yuan in 2012, according to the latest data from the Ministry of Industry and Information Technology.

Craig Allen, president of the US-China Business Council, said "China is an attractive location for supply chain integration."

China's scale motivates US companies, while the country's ecosystem is strengthened greatly by investments in infrastructure and talent, Allen said.

Roy Yang, head of smart buildings and smart power divisions for China at Swiss tech company ABB Group, said that supported by China's efficient logistics and supply chain, his company exports products manufactured at its plants in the country to more than 60 countries and regions.

"We are also partnering with Chinese companies to carry out engineering, procurement and construction projects in overseas markets, especially in economies related to the Belt and Road Initiative," Yang said.