Foreign firms operating in China make profits, plan to expand; newcomers multiply

The business performances of foreign-invested companies in China are particularly impressive. Those that have been operating in China are making expansion plans, while more and more foreign companies are coming to invest and settle in the Chinese market to seize growth opportunities.

Analysts on Tuesday attributed the attractiveness to China's huge market, continued opening-up policy and improved business environment.

US-based multinational pharmaceutical company MSD reported operating revenue of $6.71 billion in China in 2023, up 32 percent year-on-year, accounting for 12.5 percent of its global revenue.

German automotive supplier Bosch reported sales growth of 5.2 percent in China in 2023, totaling 139.1 billion yuan ($19.4 billion).

Apple's revenue from China accounts for about one-fifth of its total revenue.

The financial results of HSBC Holdings showed that the company made more than $1 billion in profit from the Chinese mainland in 2023.

"We remain confident in the resilience of the Chinese economy, and the growth opportunities in the Chinese mainland over the medium to long term," Noel Quinn, CEO of HSBC Holdings, said in a statement along with the release of the 2023 results.

In 2023, China was Finnish elevator maker KONE's largest single market globally. Sales from the China market accounted for 26 percent of its global sales, according to its results.

Such business performances show why foreign-funded companies are increasing their presence in the Chinese market.

As one of the latest examples, Apple announced on Tuesday that it will open a new research and development (R&D) center in Shenzhen, South China's Guangdong Province and upgrade its Shanghai R&D center to support product manufacturing.

Apple will also add a new store in downtown Shanghai on March 21, which will reportedly be the highest-standard Apple store in the Chinese mainland. It will be its 57th store in Shanghai.

Bosch on Monday won approval to start construction of the second phase of a production base for new-energy vehicle components and a self-driving R&D center in Suzhou, East China's Jiangsu Province, the Suzhou Industrial Park announced on its WeChat account on Tuesday.

Total investment for Bosch's Suzhou production and R&D base will exceed $1 billion. Phase one of the project is expected to begin trial production in September, and formal mass production will be achieved in early 2025.

Newcomers have also emerged. For example, on Monday, US fashion brand Supreme announced a plan to open its first store in China, which will be its 17th store worldwide, media reported.

The number of newly established foreign-invested enterprises in China amounted to 4,588 in January, an increase of 74.4 percent year-on-year, data from the Ministry of Commerce showed.

In 2023, 53,766 foreign-funded enterprises were newly established in China, up 39.7 percent over the previous year, according to the National Bureau of Statistics.

Analysts said that China's economy has returned to the normal track of growth, and foreign investment will stick to the country's huge market.

China's leading position in global economic growth will provide plenty of investment opportunities, Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management Co, told the Global Times on Tuesday. "China's overall industrial advantages and unchanging position in global supply chains remain attractive to foreign investors," Tian Yun, a veteran economist based in Beijing, told the Global Times on Tuesday.

For example, KONE said in its 2023 financial results that the majority of components used in the company's supply chain are sourced from external suppliers, a significant number of which are located in China.

Apart from having a huge market, growth potential and industrial advantages, analysts also noted that China has been continuously opening up its markets to foreign investment.

The business environment in the Chinese market has been continuously improved, and the market's vitality has been continuously stimulated, the analysts said.

The 2024 Government Work Report, delivered at the opening meeting of the second session of the 14th National People Congress, outlined the country's efforts to attract foreign investment. For example, all market access restrictions on foreign investment in manufacturing will be abolished, and market access restrictions in services, including telecommunications and healthcare, will be reduced.

Tian expected that China's attractiveness to overseas capital will be higher in 2024 than in the previous year.

"We believe that China will remain on a positive trajectory in the long run, and its market will continue to attract multinational corporations as well as foster new start-ups," Denis Depoux, global managing director of Roland Berger, told the Global Times in a recent interview.