The Covid-19 outbreaks and the downward economic pressure posed short-term challenges to certain market players in China in 2022.
But many foreign-funded firms have remained upbeat and even upped their local investment, indicating their confidence in the country’s growth over the long run.
In the first 11 months of 2022, China’s foreign direct investment totalled 1.156 trillion yuan (RM746bil), up 9.9% year-on-year. The amount has already surpassed the total for 2021.
Over 99% of the surveyed foreign firms are confident about China’s economic outlook in 2023, and 98.7% said they would maintain and expand their investment in China, a report by the China Council for the Promotion of International Trade said last month.
As China continues to expand domestic market demand, presses ahead with industrial innovation and facilitates the circulation of domestic and international markets, many foreign-invested firms are seeking to reorient their roles in the country’s new development pattern, underscoring their long-term confidence in operating in China.
Home to the largest middle-income group in the world, China’s per capita gross domestic product has exceeded US$12,000 (RM52,482).
“China is the world’s most promising consumer market with optimising and upgrading consumption and modern modes of production,” said Zhao Chenxin, deputy director of the National Development and Reform Commission, the country’s top economic regulator.
With growing affluence, Chinese consumers tend to spend more on products and services to better their lives, such as health and beauty products.
Global pharmaceutical company AstraZeneca announced in June that it would set up a new regional headquarters and a manufacturing and supply base in Qingdao, Shandong province, further expanding its regional presence in the company’s second-largest market worldwide.
“While containing the pandemic, China has achieved all-round economic and social development, with it not being easy to strike such a balance.
“At the same time, the country has continued to deepen reform across the board and taken effective measures to boost market confidence,” said Leon Wang, president of AstraZeneca China.
“We can feel that China’s opening-up stance has never changed.”
In November, Japanese cosmetics giant Shiseido Group vowed to continue to invest in building its second-largest research and development centre in China, bolstered by an innovation fund worth up to one billion yuan (RM650mil).
“We are full of confidence in the huge potential in China and are even more committed to our long-term investment in the market,” said Shiseido Group chief executive officer Masahiko Uotani, calling China “a key growth engine” of the company’s development.
China has the most complete industrial system globally. The country’s manufacturing industry accounts for 30% of the world’s total, making it an important hub of the global manufacturing industry.
High-end manufacturing has become a major foreign direct investment destination this year, and many foreign manufacturers have made China an innovation base.
Official data showed that China’s actual utilised foreign investment in high-tech manufacturing soared 58.8% year-on-year during the January-November period.
German firms are big investors in the sector. BMW Group’s joint venture in China, BMW Brilliance Automotive Ltd, said in November that it would invest 10 billion yuan (RM6.5bil) in a new battery production project in Liaoning province.
