By Dr Mehmood Ul Hassan Khan
Recently concluded China’s annual 2 Sessions has unboxed its economic, social, political and geostrategic DNA which further boosted confidence of regional as well as world markets and economies.
Actually, announcement of China’s GDP up to 5 percent, implementation of new productive forces, further structural reforms to attract more and more foreign direct investments, modernization, further opening-up, institutional of AI Plus, rectification of real estate market, small banks and financial institutes and strong regulatory mechanism for stock exchange has further enhanced multinational companies operating in China.
It seems that further expansion of private sector, market access in more areas such as manufacturing and services sectors and improvement in the business environment has given good message to multinational companies in China. All are also upbeat about China’s overall economic strategy, with focus on high-quality development.
Frankly speaking 2 Sessions have successfully rebuttal the smearing campaign of Western policy makers and media outlets aimed at discrediting the Chinese economy, as well as their ill-conceived attempts to decouple from and contain China’s development.
Interestingly, Airbus spells out an overall positive outlook for China’s economy in 2024 mainly for the high quality development of the scientific and manufacturing sectors. It rightly termed persuasions of productive forces, focusing on domestic consumption, international trade and foreign investment as appropriate steps creating an optimized business environment and stabilized supply chain, showing positive signals for foreign companies.
On the other hand, French multinational software company Dassault Systèmes mentioned that China’s steady opening-up, role in the global industrial, supply and innovation chains have offered new opportunities for multinationals. Resultantly, Dassault Systèmes is more confident and determined than ever in investing in the Chinese market.
The famous German Bayer has been increasing investments in China. The company inaugurated an Open Innovation Center in Yizhuang, Beijing’s Daxing district, established the Beijing plant of Bayer Radiology and started construction for a new supply center in Hangzhou, East China’s Zhejiang Province during 2023 vividly reflecting high margins of profitability.
Moreover, the French multinational firm Schneider Electric has also been stepping up investment in the Chinese market. In 2023 alone, the company established world-class research and development (R&D) institutions in China, including DP China Hub, China Automation R&D Center, Secure Power Innovation Lab and AI Innovation Lab.
It seems that more and more multinationals are expanding their operations in China, as the Chinese economy continues to recover and greater efforts are being taken to attract investments.
4,588 new foreign-invested firms were established across the country, up 74.4 percent year-on-year in January 2024. It is encouraging that FDI in the high-tech manufacturing sector soared 40.6 percent year on year in January 2024.
In summary, the US and the EU have been applying economic protectionism to pressure China in its ill intention to contain China’s economic development.
Many multinational companies have voiced firm support for multilateralism, free trade and mutually beneficial cooperation.
Airbus supports multilateralism and free trade, and advocates win-win cooperation.
FDI into China will likely increase in 2024, as the country takes greater efforts to attract foreign investment. Hopefully, China will maintain its positive attitude towards foreign companies with the further opening up of the economy and optimization of the business environment.
It is suggested that the Chinese policy makers should provide more access to more services sectors such as healthcare, elderly care, financial and telecommunications.
The author is Executive Director of The Center for South & International Studies (CSAIS) Islamabad.
