Foreign businesses stay optimistic about Chinese market
By He Yin
Foreign direct investment (FDI) into the Chinese mainland, in actual use, hit 98.7 billion yuan ($14.38 billion) in November, up 5.5 percent year on year, according to statistics released by China’s Ministry of Commerce (MOFCOM) on Dec. 15.
This marked the eighth consecutive month for the country to witness positive growth in FDI.
A recent survey done by the British Chamber of Commerce in China indicated that 44 percent of British businesses planned to increase investment in China in 2021. Similar sentiment is also shown in a U.S.-China Business Council report which said nearly 70 percent of the council’s member companies expressed optimism about market prospects in China over the next five years. The Japanese Chamber of Commerce and Industry in China also disclosed in a survey that more than 40 percent of interviewed Japanese enterprises said they would expand their businesses in China in the next one to two years.
The trust of foreign businesses in China comes from the steady growth of the Chinese economy. As a major economy that is first in the world to put COVID-19 under control and resume production, China has showcased its economic resilience and vitality, which contributed a major part to foreign businesses’ confidence in the Chinese market.
In November this year, China’s Manufacturing Purchasing Managers Index (PMI), non-manufacturing business activity index, and comprehensive PMI output index reached 52.1 percent, 56.4 percent and 55.7 percent, respectively, all exceeding the threshold for nine consecutive months. The total profits of industrial enterprises above designated size nationwide from January to October expanded by 0.7 percent from a year ago, marking the first positive growth in the year.
The Organization for Economic Cooperation and Development (OECD) Economic Outlook released earlier this month projected that China will be the only major economy to record a positive performance this year, which coincides with the statement made earlier by the International Monetary Fund (IMF). The remarkable economic performance of China is a major reason for its strong attraction to global market entities.
The trust of foreign businesses in China comes from the country’s continuous efforts to lift its business environment. China enacted the foreign investment law and its implementing regulations, comprehensively canceled the approval and registration of foreign enterprises in the business field, and amended the Measures for the Handling of Complaints from Foreign-invested Enterprises. China’s continuous efforts to build a market-oriented, law-based, and internationalized business environment have won high recognition from the international society.
The World Bank said in a July publication titled “China’s Doing Business Success: Drivers of Reforms and Opportunities for the Future” that China has witnessed an unprecedented improvement in its business environment. An investigation done by the American Chamber of Commerce in China (AmCham China) also found that 12 percent more respondents indicated a substantial improvement in China’s investment environment, compared with those from a year ago.
The trust of foreign businesses in China comes from the country’s constant measures to expand opening-up. China is currently accelerating the establishment of a “dual circulation” development pattern in which domestic economic cycle plays a leading role while international economic cycle remains its extension and supplement, so as to make steadier steps toward high-quality opening-up.
Items on China’s national negative list have been cut from 40 to 33; the Hainan free trade port has been constructed; a master plan was unveiled to build three new pilot free trade zones (FTZs) in Beijing, Hunan and Anhui; efforts are being made to expand opening-up in financial and other sectors. These concrete measures of opening-up signal China’s sincerity and resolution to make larger the cake of win-win cooperation, and are very appealing given the current economic situation of the world.
Bernard DeWit, president of the Belgian-Chinese Chamber of Commerce said China is worth the recognition and support from the world, as the Chinese government has been taking multiple measures to expand opening-up when some other countries try to close their doors to foreign investment.
To make China a shared market of the world is a hope of China, as well as a common aspiration of global enterprises. There are always enterprises that are adept at grasping and conforming to opportunities. From January to October, about 29,500 foreign enterprises were established in China; the investment ploughed back by foreign enterprises in the first nine months this year was up 25.5 percent year on year. Many enterprises, including BMW, Daimler AG, Siemens, Toyota, LG, Exxon Mobil and BASF, have decided to expand investment and optimize their business structure in China. These facts, which reflect foreign businesses’ confidence in China, well explain that the international society believes in China’s present and future.
It calls for the vision of building a community with a shared future for mankind to get rid of the COVID-19 shadow and achieve recovery. China, staying committed to openness, cooperation and unity for win-win results, making institutional innovations to support an open economy of higher standards, and making its business and investment environment more attractive, is injecting positive energy to the world. It is believed that the path of common development, jointly chartered by China and other countries, will only become wider and wider.