Multinationals show strength of their faith
Despite rising external uncertainties, multinationals plan to expand their presence in China given its bright growth prospects and continuing steps to open up, business leaders say.
Digital transformation, carbon neutrality and common prosperity, as part of the country’s pursuit of highquality growth, are among the top areas that are seen to provide the greatest opportunities for multinationals, they said.
Their sentiment was reflected by recent figures pointing to the strong momentum of foreign direct investment in China. FDI in the Chinese mainland, in terms of actual use, rose 37.9% year-on-year to 243.7 billion yuan ($37.86 billion) in the first two months of the year, compared with 14.9% growth last year, the Ministry of Commerce said.
Frank Meng, the chairman of Qualcomm China, said: “Like many domestic and foreign companies that have benefited from the continuously improving business environment in China, we are upping our investments, expanding our presence and seeing a growing list of partners in the country.”
The U.S. computer chips company will work with its Chinese partners to make technology more accessible and accelerate the 5G-powered digital economy, making the most of opportunities offered in China by digital transformation.
Despite uncertainties, the U.S. manufacturer Cummins Inc. will continue to invest in expanding its operations in China, said Nathan Stoner, vice-president of Cummins Inc. and chairman of Cummins China.
“China continues to be the world’s largest end-market (of engines) by volume, a critical link in our global supply chain and one of the fastest developing markets for new energy and hydrogen,” Stoner said, adding that Cummins will open its $150-million research and development center in Wuhan, Hubei province, in the second quarter.
Underpinning business leaders’ confidence has been China’s reiteration of a highquality development agenda.
The Government Work Report at the recently concluded annual session of the National People’s Congress calls for the research and application of low-carbon technologies to be promoted, the income distribution system to be improved, and technological innovation and digital industries to receive more attention.
“Innovation, decarbonization and common prosperity rank high on China’s agenda, and we anticipate China’s high-quality development will drive future global economic growth over the coming decades,” said Jerry Zhang, executive vicechairman and chief executive of Standard Chartered China.
The Government Work Report also highlighted the country’s continuous drive in terms of opening-up and said foreign companies would be treated equally, they would be encouraged into a broader range of sectors and more pilots for opening the services sector would be established.
To further boost foreign businesses’ confidence in the Chinese market, it is critical for local governments to put into place the principle of national treatment, or treating foreign and domestic firms exactly the same way, said David Blair, vice-president of the Center for China and Globalization.