Beijing tipped to remain preferred destination for foreign capital

Experts have tipped Beijing to continue being an appealing destination for foreign investment by actively attracting sci-tech innovation projects and talent, while steadfastly striving to enhance its business environment.

Executives from foreign-funded companies, investors and government officials gave the Chinese capital — a leading hub for scientific and technological innovation — this vote of confidence at the 2023 Invest Beijing Global Summit.

The summit was held on the sidelines of the 2023 Zhongguancun Forum, held from May 25 to 30 in the city's Zhongguancun innovation hub, known as "China's Silicon Valley."

During the summit, domestic and foreign companies signed a series of investment deals worth more than 60.8 billion yuan (about $8.61 billion), covering 39 projects in Beijing's high-tech sectors such as intelligent connected vehicles, medicine and health, and intelligent manufacturing.

A total of 152 investment projects involving enterprise financing, park cooperation, building cooperation, and land financing were also announced during the summit, with a total investment of 143.4 billion yuan.

Hubertus Troska, member of the board of management at Mercedes-Benz Group responsible for Greater China, said Beijing has the largest number of regional headquarters of Fortune 500 enterprises and gives priority to development in fields such as services trade, technological innovation, and intelligent manufacturing.

In the past 10 years, Mercedes-Benz Group and its local partners have invested more than 100 billion yuan in China, focusing on expanding local production capacity, strengthening local research and development capability, and building the automotive industry chain, among other key fields.

"I'm confident that Beijing, with its clear commitment to continuing with China's reform and opening-up policy and constantly improving business environment, will remain an attractive choice for foreign investors," said Troska, who has lived in the city for more than a decade.

Carl-Alexander Scheef, vice-president of Bayer Healthcare Co, China, said Beijing's efforts in driving reform and opening-up, along with preferential policies, encouraged Bayer to become one of the first foreign-funded enterprises to settle in the city.

Local government officials have visited the company's factory in Beijing several times to better understand its development needs. The launch of China (Beijing) Pilot Free Trade Zone in September 2020 has also helped Bayer with a resilient supply chain and speedy customs clearances, giving the company more confidence in its future development in Beijing, Scheef said.

Last year, Bayer invested 40 million euros (about $43 million) in setting up four new packaging production lines in China, increasing its capacity by at least 40 percent. "It's a big investment, because we really believe in the growth of the Chinese market," Scheef added.

Sheng Qiuping, vice-minister of commerce, said: "Beijing is one of the first pilot cities in China to carry out the construction of international consumer center cities and the cultivation of an innovative business environment. We sincerely welcome foreign-funded enterprises to carry out investment in Beijing and continuously expand fields of cooperation."

Beijing has become a hot spot for foreign investment in China. The Beijing Municipal Bureau of Statistics said actual utilized foreign direct investment totaled $17.41 billion last year, a year-on-year rise of 12.7 percent. Of this total, $6.98 billion was spent on scientific research and technology services.

The city has also become a prominent hub for sci-tech innovation, as it is home to nearly 100 universities and more than 1,000 research institutes. It holds third position globally in terms of the number of unicorn companies — those valued at $1 billion or more. Beijing has also secured top spot in the Nature Index global science city rankings six consecutive times.

The Zhongguancun innovation hub has attracted more than 300 multinational companies to set up regional headquarters and research centers, and over 130 Fortune Global 500 companies to establish branch offices.

Zhou Kui, partner at investment company Sequoia China, said, "Beijing has long attached great importance to the development ecosystem of the venture capital industry, providing sufficient talent reserves for cutting-edge sci-tech innovation and rich scenarios for technology application."

A total of 50 companies based in Beijing that Sequoia has invested in, 50 have completed initial public offerings, and 43 have become unicorn companies.

"We firmly believe that more achievements and leading enterprises with global influence will be seen in the future in Beijing," Zhou added.