Recently, the international situation has become more complex and changeable, and the world economic recovery is full of uncertainty. China’s economy is facing the triple pressure of shrinking demand, supply shock and weakening expectation. The situation of epidemic prevention and control is grim and complex. There is another argument abroad that China’s importance to multinational corporations is weakening. We must be soberly aware that this kind of bad mouthing and questioning will not change the objective fact that China’s economy will improve for a long time, nor will it weaken China’s ability and strength to deal with complex domestic and foreign challenges. China is still regarded by multinational corporations as a ‘safe haven’ for its development.
China’s economic growth prospects are highly uncertain, and the expected growth rate ranks among the top among the world’s major economies. This year’s government work report puts forward that the expected growth target of GDP is about 5.5%, which is higher than that of most economies. In 2021, China’s total economic output will exceed 114 trillion yuan, an increase of 5.5% on this basis. The corresponding economic growth can rank among the top 20 in the world in terms of economies. I believe multinational companies can see clearly how big the opportunities contained in the Chinese market are.
China has sufficient policy tools to meet various challenges at home and abroad. From the central economic work conference at the end of last year to the national two sessions this year, China has made a series of plans to stabilize growth, which has effectively boosted market confidence. Many analysts and institutions at home and abroad believe that although China’s economy faces many challenges, with the support of stable growth policies, the economy will improve quarter by quarter.
At a time when the international situation has intensified turbulence, good fundamentals and rich policy toolbox have made China a major ‘safe haven’ for global investors. Kenneth Argentway, head of Asian sovereign debt at Aberdeen Asset Management in the UK, believes that China is ‘the closest you can find to a safe haven’. When US Congressmen recently proposed that Intel should withdraw from the Chinese market, Intel CEO Gail Singh replied: ‘to become an industry leader, we must have a layout in China, the world’s largest market. For Intel, the Chinese market is the most important source of income.’
High quality development has spawned new economic growth points and become a new power source for the development of multinational corporations. As China promotes the goal of ‘double carbon’, a huge ‘green market’ is taking shape. Especially in the situation that low-carbon business is becoming a global trend, China will provide a great impetus for multinational corporations to realize low-carbon business. Recently, BASF, Bosch, Schneider Electric, Saudi Aramco and other well-known multinational companies have strengthened their investment and layout in the Chinese market for low-carbon business. With the rapid development of China’s high-tech industry, this field is also becoming a hot spot for multinational corporations to invest. In the first two months of this year, the actual use of foreign capital in China’s high-tech industries increased by 73.8% year-on-year, highlighting the willingness of multinational corporations to be optimistic about the prospects of China’s economic transformation and upgrading and to share the dividends of China’s economic transformation and upgrading.
The continuously optimized business environment has stabilized the development expectations of multinational corporations in China. The newly released negative list of market access has been further reduced by 6 items compared with the 2020 version. Since the full implementation of the negative list system of market access in December 2018, the negative list of market access has been reduced three times, releasing a clear signal that China continues to promote high-level opening-up. Recently, the Chinese government has also successively issued a series of special policies and measures to stabilize foreign investment, promote the implementation of the national treatment of foreign-funded enterprises, expand the scope of encouraging foreign investment, and effectively promote the growth of the scale of foreign investment.
The 2022 China business environment survey report released by the American Chamber of Commerce in China shows that 60% of member enterprises say that China is still one of the top three investment places in the world, and 66% of member enterprises plan to increase their investment in China in 2022. L’Oreal, MSD and other multinational companies also recorded double-digit growth in the Chinese market in 2021. A series of data show that international investors and multinational corporations are casting a vote of confidence in China.