China remains hotspot for foreign investment

In January 2024, China saw the establishment of 4,588 new foreign-invested firms, marking a 74.4 percent surge from the previous year, according to data from the country's Ministry of Commerce (MOFCOM).

A staff member searches for goods at a cross-border e-commerce park in the Heihe Area of the China (Heilongjiang) Pilot Free Trade Zone in Heihe city, northeast China's Heilongjiang Province. (Xinhua/Xie Jianfei)

An official from the ministry underscored the soaring enthusiasm among foreign investors for China, adding that multinational companies remain optimistic about opportunities in the Chinese market and are boosting their investments in the country.

Many foreign companies operating in China have recently disclosed impressive financial results for 2023, accompanied by ambitious plans for further expansion in the Chinese market.

French cosmetic giant L'Oreal and Germany's leading engineering and technology company, Bosch Group, each reported a 5 percent increase in their 2023 sales in China. The Greater China market accounted for about one-fifth of Apple's total revenue last year. U.S. pharmaceutical enterprise MSD saw its sales in China surge by 32 percent year on year to $6.71 billion in 2023.

The sales growth of foreign companies in China is closely tied to the country’s vast market. Joe Bao, president for Greater China at Finland-based elevator giant KONE, mentioned that the Chinese market was the company's largest single market in the fiscal year of 2023, accounting for about 26 percent of its global sales last year. In the same period, KONE's equipment shipments in China exceeded 1.5 million units.

A staff member works at a factory of SMC (China) Co., Ltd., a foreign-invested company in Beijing. (Xinhua/Shan Yuqi)

"China is the world's largest new elevator market and the country with the most elevators in operation. Notably, 95 percent of the elevators currently in use in China have been installed for less than 20 years. This means that there is tremendous growth potential in the Chinese market for elevator maintenance and upgrading," Bao said.

Without China's development, there would be no success for KONE, Bao added, noting that this year, the company is further optimizing its products and services and is actively participating in urban renewal and development projects across various Chinese cities.

Additionally, China's further opening-up holds appeal to foreign enterprises. "Despite facing various challenges in 2023, Kärcher's overall performance in China was quite impressive. Sales in the Chinese market continued to grow and ranked among the top 10 in Kärcher's global markets," said Rainer Kern, vice general manager and CFO of Kärcher China.

Kern believes that China's attractive investment climate, solid supply chain, abundant talent pool, stable social setting, and the ongoing introduction of preferential policies have strongly supported the development of foreign companies in the country.

Beyond its vast market, China's well-developed industrial and supply chain systems, along with its high-quality talent and other advantages, have allowed foreign companies to efficiently integrate various production factors, said Li Hongtao, an associate research fellow at the Institute of Foreign Investment of the Chinese Academy of International Trade and Economic Cooperation.

Particularly in recent years, China's abundant innovation scenarios, platforms, and resources have provided multinational companies with new opportunities for product research, development, and sales, enabling them to secure an early advantage in global markets, added Li.

An increasing number of global enterprises are committing to growth in China. The largest development center of German carmaker Volkswagen Group outside Germany commenced operations in January 2024. Meanwhile, U.S. energy giant ExxonMobil plans to invest 10 billion yuan ($1.4 billion) in a project in south China's Guangdong Province this year.

Staff members work at a foreign-funded electronics components enterprise in Gangxi township, Rongcheng city, east China's Shandong Province. (Photo/Li Xinjun)

On March 1, multinational pharmaceutical giant AstraZeneca signed an investment agreement with the management committee of the Wuxi National High-Tech District, committing $475 million to build a small molecule drug factory in Wuxi city, east China's Jiangsu Province.

A recent survey conducted by the American Chamber of Commerce in China (AmCham China) revealed that 50 percent of the companies surveyed rank China as their top or among their top three investment destinations.

A report released by HSBC in 2023 indicated that 87 percent of the international companies interviewed plan to increase their operations in China.

The enthusiasm of foreign enterprises to invest in China lies in the fact that they remain bullish on the country's prospects.

Yoon Doson, CEO of CJ China, stated that the South Korean conglomerate CJ Group has remained committed to China's market for nearly 30 years. The group values and appreciates the growth opportunities and favorable conditions that the Chinese market offers to foreign enterprises operating in China. With profit growth in 2023, the group maintains an optimistic outlook on the Chinese market and is confident in its operations within the country.

"China's consumption and industrial upgrading, driven by its high-quality economic development, are bringing new opportunities to foreign companies," Li added.