BEIJING (XINHUA) – In a year marked by rising protectionism and “decoupling” attempts in the world economic arena, what has become of China’s allure as a favoured investment destination? Foreign enterprises’ bullish moves have told a lot about it.
As 2024 draws to a close, a recent landmark investment decision by French pharmaceutical giant Sanofi has emerged as a compelling testament to global investors’ consistent faith in the Chinese market.
In early December, the company announced a plan to invest nearly EUR1 billion (about USD1.04 billion) in establishing a new insulin production base in Beijing. This will be Sanofi’s largest single investment in China since entering the country in 1982.
Sanofi has not been alone throughout this year in ramping up its commitment to the Chinese market. In the first 11 months, a record 52,379 foreign-invested companies were established in China, up 8.9 per cent from the previous year, according to the Ministry of Commerce. In November, foreign direct investment in the Chinese mainland in actual use climbed six per cent year on year.
The influx of investors serves as a reality check for many China sceptics, who have spread a narrative of foreign companies fleeing the Chinese market en masse. But what allows China to maintain its pull for global investment?
A key magnet is China’s industrial system, which is the most comprehensive on a global scale and offers unparalleled supply chain advantages. It is the only country in the world with every industrial category classified by the United Nations, with its manufacturing added value constituting roughly 30 per cent of the global total.
The country’s supply chain advantages for foreign investors present immense growth opportunities. Coupled with a vast consumer market of 1.4 billion people, the country remains a crucial destination for global investors.
President of the American Chamber of Commerce in China Michael Hart recently shared his insight with Xinhua on why he does not believe that most foreign companies will leave the country. “One, they have invested in supply chains and built them up with their suppliers. Number two, there are no quick, easy replacement markets.”
Recognising China’s market potential and supply chain benefits, German optics giant ZEISS inaugurated a research and development (R&D) and manufacturing site in Suzhou, an industrial hub in east China, this year. President and CEO of ZEISS Greater China Maximilian Foerst said the site is a milestone in the company’s efforts to localise R&D and expand its high-end product portfolio.
China is a crucial sales and manufacturing base and an integral part of the company’s global business, said Foerst. He noted that the company has full confidence in China’s outlook and is committed to long-term investment in the country.
As China pursues an innovation-driven growth model, the country’s prominence in the global innovation landscape continues to increase. The Global Innovation Index 2024, released by the World Intellectual Property Organization, ranks China 11th among the world’s most innovative economies, up one spot from the previous year. This makes China one of the fastest risers over the past decade.
Riding the wave of China’s innovation drive, ACWA Power, a Saudi Arabia-based electric power generation company, announced in October that it will establish a global innovation centre in Shanghai. The centre will focus on new technologies and products in areas such as photovoltaics, wind power and green hydrogen.
Executive vice president of ACWA Power Lyu Yunhe said China’s supply chain companies in the renewable energy sector possess advanced technologies and competitive solutions.
Establishing an innovation centre in China will support the company’s global strategy and project development, he added.
