HSBC: MNCs to further expand in China market

Tourists take photos at the Bund area of Shanghai. [Photo by Wang Gang/For China Daily]

Encouraged by China's economic rebound following the optimization of its COVID-19 control measures, the majority of international businesses in the country plan to further increase their investments in China, with supply chain, technology and innovation, and digital capabilities and platforms arising as the top three investment priorities, according to an HSBC report released on Monday.

By polling more than 3,300 companies from 16 major economies, HSBC revealed that 87 percent of the interviewed international companies will increase their business in China in the next 12 months.

About 73 percent of the respondents expect to increase their supply chain footprint in China over the next three years, with one in four expecting to "increase significantly".

Southeast Asian businesses are especially interested in expanding their supplier networks in China. Such interest is the strongest among surveyed Indonesian companies at 92 percent, followed by those from Vietnam and the Philippines.

Manufacturers are particularly interested in growing their supply chains in China, with 74 percent likely to increase such investment over the next three years, said HSBC.

Mark Wang, president and CEO of HSBC China, said that high inflation, lack of growth momentum and supply chain risks are the major concerns of overseas companies at present as they face many complexities and changes in the global economy.

However, the Chinese market continues to attract attention from companies around the world given its continued economic recovery, massive market size and deeply integrated supply chains. As China's high-quality economic development advances, more international companies will benefit from China's growth, especially the potential generated by emerging economies and low-carbon transition, Wang said.

As HSBC discovered in the survey, a majority 88 percent of interviewed international businesses agree that China's digital economy is opening up new investment opportunities.

On top of that, one-third of the respondents believe that China takes the lead worldwide in terms of e-commerce, while a similar proportion see the country as a leader in artificial intelligence, machine learning and digital payments.

Thanks to China's large domestic market, 39 percent of international companies see China as an attractive place to develop and test new technologies and products, according to the HSBC report.

China's green industry is also lucrative, with renewable energy, electric vehicles and energy-efficient products likely to churn out the greatest growth potential, said international businesses interviewed by HSBC.

Therefore, nearly 55 percent of the respondents plan to offer greener products in China, including energy-saving products, recyclable products and products using sustainable materials. The United States and Germany are more prone to guide consumers' habits by providing more incentives to encourage the purchase of green products and services, according to HSBC.

Meanwhile, 49 percent of the polled companies will invest in making manufacturing facilities or office buildings more energy efficient and 48 percent plan to make their operations more sustainable.

The report was released for the sixth consecutive year during the China International Import Expo.