/ world today news/ BMW invested tens of billions of euros to expand its battery production center in Shenyang, Liaoning Province, and BASF made an equally large investment in an integrated production base in Zhangjiang, Guangdong Province. China definitely does not stop attracting “like a magnet” foreign investments from large companies, world leaders in their sectors.
In 2022, amid a 40% drop in foreign investment globally, China achieved growth in this indicator and reversed the trend. The actual use of foreign capital for the year was 1,232.68 billion yuan, a year-on-year increase of 6.3%. On a parity basis, this is the equivalent of US$189.13 billion, an increase of 8%.
Behind the brilliant results are foreign-funded enterprises from all walks of life, which continue to increase their share of the Chinese market.
From the beginning of 2023, foreign capital continues the trend and increases its participation in the Chinese market even more. According to data from the Ministry of Commerce, in the first two months of this year, the country’s actual use of foreign capital was 268.44 billion yuan, an increase of 6.1% year-on-year and continuing to maintain strong growth. Among them, the actual use of foreign capital in the high-tech manufacturing industry increased by 68.9% year-on-year, becoming an important area of foreign capital inflow.
Why might China become an investment hotspot for foreign-funded enterprises, especially the manufacturing industry? Not only does the stable development of China’s economy support the development of foreign companies’ business processes, but the process of China’s continuous opening to the world also brings many positive results for investors.
According to the guidelines of the Central Working Conference on Economic Affairs held at the end of last year, “intensifying efforts to attract and use foreign capital” are one of the five key tasks of economic work in 2023. The meeting proposed to ensure maximum convenience for foreign businessmen to visit China for short-term and long-term business trips to participate in trade and investment negotiations, and to promote the construction of foreign-funded projects. The government’s 2023 performance report lists “foreign capital” as an important part of economic development, emphasizing greater efforts to attract and use foreign capital.
In addition to the further release of initial dividends, the steady growth of the Chinese economy has also provided sufficient confidence for foreign investment. In February this year, the Consolidated Index of Business Activity (Purchasing Managers Index, PMI) in China rose to 52.6%, the highest level since May 2012. At the same time, the index of non-manufacturing business activity was 56.3%, an increase of 1.9 percentage points compared to the previous month, reporting two consecutive months with extremely large growth in the indicator. The recovery and development of the manufacturing industry is improving.
Some foreign companies that have been in China for many years also have insight into the transformation and modernization of China’s manufacturing industry and have found a new direction for cooperation with Chinese companies. Li Haigu, Digitalization Director of Siemens (China) Co., Ltd. Digital Industry Group Guangdong East Region, said: “Siemens is a provider of digital transformation solutions for industrial enterprises. We serve industrial enterprises in Shenzhen, Dongguan, Huizhou and the eastern part of Guangdong Province. It can be seen that many companies, especially leading players in the market, have largely completed a certain degree of digital transformation. We at Siemens hope to serve the digital transformation of 80% of China’s SMEs in the future.”
Li Haig also added that there are definitely a number of new projects and ideas with which Siemens can participate in industrial standardization. “Siemens serves many equipment companies in Shenzhen. We hope that through our technical means, local Chinese companies will be able to better adapt to EU standards and enter the European market more easily.”
Overall, amid the continuous progress in opening up China and the country’s economy to the world, supported by stable economic development, China has become a hot spot for foreign investment. The in-depth cooperation between Chinese and foreign companies will certainly constitute a beautiful development movement in many fields such as manufacturing and service industries.
#China #magnet #investments #large #foreign #companies
