MNCs remain bullish on China prospects
Top executives of foreign firms in Shanghai foresee stronger business growth in key market
Senior executives of multinational corporations based in Shanghai share an optimistic view of the world’s secondlargest economy and believe the China market will play a greater role in their global business.
Among them is Alex Gu, senior vicepresident of Medtronic and president of Medtronic China, who believes that China will become the world’s largest medical care market in the years to come.
Since opening its first office in Shanghai in 1989, the enterprise has formed a complete value chain spanning research and development, production, sales, training, and aftersales service, as well as investment, and this has laid a solid foundation for the corporation’s long-term development in the country, Gu said.
Medtronic has also made a slew of strategic investments over the past few years, including the completion of its second innovation center in Chengdu of Sichuan province in 2021, making China the only country to house two Medtronic innovation sites.
In addition, the company’s medical science and technology industry base located in the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone in Pudong district started construction in late 2022.
The base is expected to help the company better meet local market demand, when it opens in 2024.
“A series of investments and localized collaboration represent Medtronic’s long-term commitment and confidence towards the China market, as Medtronic deeply believes that the future of medical technology is in China,” said Gu.
Johnson & Johnson also believes the Chinese economy’s high-quality development will bring about great opportunities for multinational corporations, said Song Weiqun, global senior vice-president and China chairman of J&J.
His company is “highly confident of China’s economic outlook and its market prospects,” Song said.
According to Song, the confidence stems from China’s strong economic growth, great market potential and resilient economy.
Over in the automotive sector, Michael Kirsch, president and CEO of Porsche China, pointed out that China was again the company’s biggest market in 2022 — the eighth consecutive year it held this position.
“We have been participating in China’s reform and opening-up process, and we have achieved success as we benefited from its development,” said Kirsch.
Porsche’s presence in China goes far beyond a sales unit, he said, citing how China is also an innovation powerhouse that sets important trends in the global economy.
“The success of Porsche in China and Shanghai would not have been possible without the great support and cooperation of the Chinese government and everyone who is important to us doing business here,” said Kirsch.
“Since entering the Chinese market, we have been growing together with its automotive industry … and we are very impressed by China’s great determination to transform and develop the automotive industry
through electrification, intelligence and shared mobility initiatives.”
L’Oreal, which has been operating in China for over 25 years, shared similar sentiments, with the president of L’Oreal’s North Asia zone and CEO of L’Oreal China Fabrice Megarbane saying that the company has experienced constant growth in the country.
“We’ve been growing with and in China, and also building a lot of capability in the past few years,” he said, before pointing out that the company
had last year channeled investment into its intelligent fulfillment center in Suzhou, Jiangsu province, which will be inaugurated in September this year.
“We’re extremely confident in building capability and being closer to consumers. We are very optimistic about the years to come,” he said.
L’Oreal had also launched Meicifang, its first investment arm in China, last year.
Megarbane noted that his group
has full confidence in its development in China as consumption levels are steadily recovering.
Another company that highlighted the significance of the China market to its operations is Unilever. Zeng Xiwen, the company’s vice-president for China corporate affairs, said China is now one of the top three key growth markets for Unilever in the world due to its large population and the rapid rise of income levels in the country.
Among the first batch of multinationals to enter the Chinese market after China’s reform and opening-up in the 1980s, consumer goods giant Unilever has so far invested more than $3 billion in the China market.
In a show of commitment to the Chinese market, Unilever in 2009 set up one of its six global research and development centers in Shanghai. Here, up to 400 R&D personnel from 12 nations work together with their colleagues from around the world to create innovations to better serve both Chinese and global consumers, according to Shen Jun, Unilever’s vice-president for North Asia R&D Center.
Shen said the Shanghai R&D center has been constantly developing new products for Chinese consumers, even during the COVID-19 pandemic. Now that China’s COVID-19 response has entered a new phase, the company is set to deliver better and more advanced products to the China market in the coming year, he added.
“This year marks the 100th anniversary of Unilever’s first entry into the China market, and I hope we will grow vigorously together with China for another 100 years,” said Zeng.
Shanghai’s actual use of foreign direct investment rose 0.4 percent year-on-year to $23.96 billion in 2022, and 96.3 percent of the investment went to the tertiary industry, Xue Feng, director of the Shanghai Foreign Investment Development Board, said during an interview with media on Feb 17.
As of 2022, Shanghai was home to 891 multinational corporations’ regional headquarters and 531 foreign-funded R&D centers.