Business leaders signal brighter future
Enormous potential of domestic dairy industry heralded by European country
China will retain its status as an attractive investment destination for French companies, driven by its alluring consumer market, continual industrial advancements and unwavering commitment to further opening-up, said French business leaders.
“The Chinese market is still huge with great potential,” said Fabien Pacory, vice-president of the French Chamber of Commerce and Industry in China.
“The country is moving in the right direction … I am quite confident about China’s economic prospects in 2024, as I can see many adjustments and many big efforts have been made by the provincial governments and central government. We will be able to see some improvements by the end of this year,” said Pacory.
He said many French companies still think China is an important place for production as well as a key market. “They are confident that China is working hard to make sure everything is going in the right direction.”
The membership of the French chamber, established in 1992, comprises a network of more than 1,603 companies and organizations across China. It helps French companies to develop businesses in China, as well as to inform and guide Chinese companies wishing to invest in France.
Even though foreign direct investment in China, in terms of actual use, experienced an 8 percent year-on-year decline to 1.13 trillion yuan ($157.8 billion) in 2023, the country’s high-tech industries attracted 423.34 billion yuan of foreign direct investment in the same year, accounting for 37.3 percent of the country’s total utilized FDI, data from China’s Ministry of Commerce showed.
In the meantime, FDI from France into China jumped by 84.1 percent year-on-year, said the commerce ministry.
In response to challenges such as declining global demand for goods and geoeconomic shocks, China has been expediting the unlocking of its market potential, said Zhang Wei, vice-president of the Beijingbased Chinese Academy of International Trade and Economic Cooperation.
Multinational corporations have taken proactive steps to align with market trends and enhance their investment strategies, particularly in sectors like high-end consumption, manufacturing, healthcare, and the development of green energy solutions, she said.
Cathay Capital, a Sino-French investment company with offices in global locations including Shanghai, Singapore, Paris and New York, recently announced that it has undertaken an exclusive strategic investment in Milkana, a French cheese brand, aiming to enhance its market presence and growth prospects in the Chinese market.
Milkana, owned by Savencia Fromage and Dairy, a French dairy and food product manufacturer, now offers over 50 varieties across multiple series worldwide.
Continuously innovating to meet Chinese consumer needs, the brand has established itself as a pioneer in exploring and defining the cheese market, solidifying its leading position in China’s cheese sector.
“The trust between the two companies has led to this partnership.
We believe that together we will be stronger in creating the future of cheese in China,” said Olivier Delamea, CEO of Savencia Fromage and Dairy, headquartered in Viroflay, France.
“Currently, the Chinese market for cheese is small, with the average Chinese consumer’s annual cheese intake at about 180 grams, compared to 27 kilograms in France and 4 kg in Japan,” said Delamea, adding that the company anticipates that consumption will increase in China. Its goal is to reinvent and innovate this market.
Savencia emerged as a forerunner in China’s cheese market three decades ago. The company’s local subsidiary, BSI, introduced a unique product line for the Chinese market, notably under the brand Milkana, featuring a cheese snack specifically designed for children.
Cai Mingpo, founder and chairman of Cathay Capital, said this strategic investment is not only a testament to the company’s trust and support for Milkana but also a firm belief in the future potential of China’s dairy market.
Leveraging Sino-European industrial advantages and its understanding of the local market, Cai said Cathay Capital will help Milkana better adapt to the evolving needs of the Chinese market and actively promote product innovation and brand development, spurring new momentum in product development, brand shaping, channel expansion and supply chain management for the French brand.
The value of the Chinese cheese market is expected to grow from $1.06 billion in 2020 to $1.96 billion in 2025, a surge of nearly 85 percent, according to a report by GlobalData, a London-based data and analytics company.
Founded in 2007, Cathay Capital has more than $5 billion in assets under management with more than 230 buyouts and venture capital investments from offices in Paris, New York, Shanghai, Munich, San Francisco, Berlin, Beijing and Singapore.
Samson Khaou, executive vicepresident for the Asia-Pacific region at Dassault Systemes, the French industrial software company, said China has enormous potential for economic development and plenty of growth momentum. Despite the effect of the COVID-19 pandemic, the company has maintained double-digit business growth in the entire Asia-Pacific region in the past several years, with the biggest contribution coming from China.
Looking ahead, Khaou said the Chinese economy will continue to move forward in the direction of high-quality growth.
China’s economy expanded by 5.2 percent year-on-year in 2023, above the country’s preset economic growth target of around 5 percent, data from the National Bureau of Statistics showed, indicating that economic recovery is steadily gaining momentum in the post-pandemic era.
“This is a fairly important prerequisite for multinational corporations, giving us confidence in our development in the Chinese market,” he added. “We will continue to increase our investment in the Chinese market, extend our coverage in various industries, and work with leading companies to create best industrial practices.”
China will roll out a package of measures in 2024 to boost efforts in soliciting foreign investment. The government will work to solve existing problems that foreign businesses face in investing in its market, according to the National Development and Reform Commission, China’s top economic regulator.