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Foreign firms find sweet spot of stability, continuity in China

China Daily | Updated: 2021-03-29 08:52

Employees work at the Tesla Gigafactory in Shanghai, Nov 20, 2020. [Photo/Xinhua]

With China leading the global economic recovery from the impact of the COVID-19 pandemic, the country's mega market, optimized business environment, and status as the biggest trading partner of more than 120 countries and regions will continue to generate big dividends for global companies in the long run, business leaders said.

Despite lingering uncertainties about the COVID-19 pandemic, China's actual use of foreign direct investment, or FDI, surged 31.5 percent on a yearly basis to 176.76 billion yuan ($26.07 billion) in the first two months of this year, data from the Ministry of Commerce showed.

"We have witnessed China's impressive response to the pandemic and economic rebound as it expands efforts to further open the economy, boost consumption and pursue high-quality development. This has led to increasing demand for innovative and sustainable solutions across industries, including food packaging, laundry and home improvement," said Rajat Agarwal, president of Henkel China, the German industrial and consumer goods manufacturer.

Henkel delivered an overall robust performance for its 2020 fiscal year. The group's sales and profit reached 19.3 billion euros ($22.8 billion) and 2.6 billion euros, respectively. China is the main contributor to the group's total growth.

"We anticipate China to contribute significantly to our global growth in the coming years," said Agarwal, adding the company established several production lines at its Zhuhai plant in Guangdong province in 2020 to provide high-impact thermal products and solutions for its customers in China and across the globe.

As China and its partners signed the Regional Comprehensive Economic Partnership agreement and the country also plans to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the executive said these moves will pave the way for a greater level of market access.

China's effective control of the contagion, followed by the quick economic recovery, have also helped the country to sign free trade agreements and promote liberalization and facilitation of trade and investment with more partners, said Hao Hongmei, deputy director of the foreign investment institute at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.

Michael Lai, general manager of China operations at AstraZeneca, the British multinational pharmaceutical company, said despite the impact brought by the pandemic, the company realized double-digit growth in 2020, with total revenue rising 10 percent year-on-year to $26.62 billion. Its total revenue in China surged by 11 percent on a yearly basis to $5.38 billion, counting for 20 percent of global revenue.

Since China is the British company's second-largest market across the world, Lai said the country has some important unmet health needs in key disease areas like oncology, respiratory and cardiovascular, which also represent the main therapy areas for AstraZeneca.

Thus, the group has brought over 40 innovative medicines to China to meet market demand.

Apart from planned establishment of five regional headquarters in Beijing, Guangzhou, Hangzhou, Chengdu and Wuxi this year, Astra-Zeneca has ensured that its supply sites in China were among the earliest to return to work after the acute phase of the COVID-19 pandemic.

It has continued to supply innovative medicines to about 70 countries and regions around the world in 2020.

With the Chinese government stepping up support for its chip and integrated circuit manufacturing industries during the country's 14th Five-Year Plan period (2021-25),Merck Group believes a golden decade for the country's semiconductor industry has just begun.

This is the right time for Merck to further invest in China's next-generation electronics, said Allan Gabor, president for the company's operations in China and managing director of Merck Electronics China.

Backed by an investment of 140 million yuan ($21.5 million), the German conglomerate will start operating an electronics technology center in Shanghai in the first half of 2022, providing technology solutions and materials to the semiconductor industry to drive its growth.

From personal computers, smartphones, televisions to wearable electronics, China has become the world's largest producer and consumer of a wide range of consumer electronics.

And the country's post-pandemic growth will increasingly be driven by digital innovation technologies such as 5G, artificial intelligence, quantum computing and the internet of things, said Gabor.

"Our focus this year and in the immediate future is our two application centers-one for life sciences, the other for electronics in Shanghai-and to make sure that they are fully built out, helping customers to their maximum capabilities," he said, noting this will accelerate the learning of the technologies that the company is bringing to China and enhance Merck's local innovation strength.

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