China's efforts to build an institutional system conducive to high-level opening-up will encourage multinational companies to export more products manufactured by their plants in the country, said market watchers and business executives.
Their remarks emerged in response to a series of growth measures outlined by top policymakers during the tone-setting Central Economic Work Conference, which concluded on Dec 16 in Beijing. The remarks stressed that the country will make greater efforts to attract and utilize foreign capital, widen market access, promote further opening-up of modern service industries and grant foreign-funded enterprises national treatment.
Amid the global economic downturn and geopolitical uncertainties, these policies will further motivate foreign companies to boost investment in China and deem the country as one of their global or regional manufacturing bases for exports, said Nie Pingxiang, a researcher with the Beijing-based Chinese Academy of International Trade and Economic Cooperation.
Similar views were shared by Denis Depoux, global managing director of Munich, Germany-headquartered consultancy Roland Berger. "China's supply chains have improved as domestic and foreign companies invested heavily to modernize their production systems in 2021 when most of the global manufacturing sector was still badly hit by disruptions related to the COVID-19 pandemic."
"The continuous growth in China's exports, even in 2022, demonstrates the resilience and competitiveness of the country's supply and industrial chains," he said.
The value of China's foreign trade grew 8.6 percent on a yearly basis to 38.34 trillion yuan ($5.57 trillion) during the January-November period last year, while foreign-funded companies in the country saw their export value grow by 2.4 percent year-on-year to 6.87 trillion yuan during the same period, said the General Administration of Customs.
Amcor Plc, a packaging solutions provider headquartered in Zurich, Switzerland, opened a new plant in Huizhou, Guangdong province, in mid-December, with an investment of nearly $100 million. The factory is the largest flexible packaging plant in terms of production capacity in China, according to Amcor.
"This investment is a testament to our commitment to growing with our customers in China and throughout the Asia-Pacific region," said She Xin, vice-president and general manager of Amcor China.
Comparable opinions were expressed by Lyman Tu, vice-president for China and Southeast Asia at Wilo SE, a German provider of pumps and pump systems, who said the company will add investment in China and put a new plant into operation in Changzhou, Jiangsu province, in early 2023 after seeing its sales revenue soar by more than 20 percent year-on-year in the country in 2021.
"Together with other manufacturing bases in China, the new factory's products will not only supply the Chinese market, but also be exported to other emerging markets," he said, adding China's broad market prospects, integrated supply chain and improving market environment are the incentives for Wilo to expand its presence. The country will likely become the group's largest market by 2023.
Lu Chengyun, a researcher at the Institute of Transportation Research under the National Development and Reform Commission, said China's logistics industry, bolstered by factors such as a well-developed transportation infrastructure, China-Europe freight train services and the active participation of global players, has greatly facilitated global companies to carry out export business in China and boosted domestic consumption.
Backed by new opening-up policies, multilateral trade initiatives and high-standard business platforms, such as the Regional Comprehensive Economic Partnership agreement and the annual China International Import Expo, the actual use of foreign direct investment into China expanded 9.9 percent on a yearly basis to 1.16 trillion yuan during January-November period of 2022, data from the Ministry of Commerce showed.
Zhang Yongjun, a researcher at the Beijing-based China Center for International Economic Exchanges, said that China will remain an attractive market, a superior industrial cluster and an increasingly efficient innovation hub for most multinational companies.
"The Chinese market increasingly demonstrates features of its own in consumption patterns, domestic technology and business model evolution, which is different from other markets, calling for business model localization," he said, noting that engagement and business models of multinational companies need to evolve accordingly to better participate in China's future growth.
Echoing that sentiment, Edward Hu, managing director of China for Swiss company International Workplace Group, the world's largest serviced office firm by sales revenue, said the company is optimistic about its growth in China in 2023.
Since more domestic and foreign companies have adopted flexible working spaces as an important part of their corporate real estate strategy in China over the past three years, IWG will accelerate the pace of opening new service facilities in the country in 2023 to meet the high market demand for serviced offices.
