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The COVID-19 outbreaks and the downward economic pressure posed short-term challenges to certain market players in China in 2022. But many foreign-funded firms have remained upbeat and even upped their local investment, indicating their confidence in the country's growth over the long run.
In the first 11 months of 2022, China's foreign direct investment totaled 1.156 trillion yuan ($170.6 billion), up 9.9 percent year-on-year. The amount has already surpassed the total for 2021.
Over 99 percent of the surveyed foreign firms are confident about China's economic outlook in 2023, and 98.7 percent said they would maintain and expand their investment in China, a report by the China Council for the Promotion of International Trade said last month.
As China continues to expand domestic market demand, presses ahead with industrial innovation and facilitates the circulation of domestic and international markets, many foreign-invested firms are seeking to reorient their roles in the country's new development pattern, underscoring their long-term confidence in operating in China.
Finer consumer tastes
Home to the largest middle-income group in the world, China's per capita GDP has exceeded $12,000. "China is the world's most promising consumer market with optimizing and upgrading consumption and modern modes of production," said Zhao Chenxin, deputy director of the National Development and Reform Commission, the country's top economic regulator.
With growing affluence, Chinese consumers tend to spend more on products and services to better their lives, such as health and beauty products.
Global pharmaceutical company AstraZeneca announced in June that it would set up a new regional headquarters and a manufacturing and supply base in Qingdao, Shandong province, further expanding its regional presence in the company's second-largest market worldwide.
"While containing the pandemic, China has achieved all-round economic and social development, with it not being easy to strike such a balance. At the same time, the country has continued to deepen reform across the board and taken effective measures to boost market confidence," said Leon Wang, president of AstraZeneca China. "We can feel that China's opening-up stance has never changed."
In November, Japanese cosmetics giant Shiseido Group vowed to continue to invest in building its second-largest research and development center in China, bolstered by an innovation fund worth up to 1 billion yuan.
"We are full of confidence in the huge potential in China and are even more committed to our long-term investment in the market," said Shiseido Group CEO Masahiko Uotani, calling China "a key growth engine" of the company's development.
Modern 'made in China'
China has the most complete industrial system globally. The country's manufacturing industry accounts for 30 percent of the world's total, making it an important hub of the global manufacturing industry.
High-end manufacturing has become a major FDI destination this year, and many foreign manufacturers have made China an innovation base. Official data showed that China's actual utilized foreign investment in high-tech manufacturing soared 58.8 percent year-on-year during the January-November period.
German firms are big investors in the sector. BMW Group's joint venture in China, BMW Brilliance Automotive Ltd, said in November that it would invest 10 billion yuan in a new battery production project in Liaoning province.
The new investment follows a phase of extensive upgrading at the BMW production base in the province, including a 15-billion-yuan plant that opened in June 2022.
In late 2022, Swiss tech giant ABB opened a state-of-the-art robotics megafactory in Shanghai. The vast production and research facility represents a $150 million investment in the world's largest robotics market.
"Our innovative, automated and flexible factory plays a key role in our strategy of 'in China, for China', strengthening our full value chain here," said Sami Atiya, president of ABB Robotics and Discrete Automation.
Shared financial dividends
China's stock, bond and futures markets rank second in the world in terms of size, while the country has further opened up its financial markets to share growth dividends.
Chinese financial authorities have released regulations to encourage foreign institutional investors to make long-term investments in its bond market, offering them more channels for foreign exchange hedging and making it easier to remit investment funds.
The range of stocks eligible under the Stock Connect program between the Chinese mainland and Hong Kong will also expand, giving mainland and international investors wider direct access to each other's stock markets.
In November, the country officially rolled out a private pension program, opening up a lucrative new market for global banks and financial institutions.
"We are very optimistic about the scale of the capital inflow into the private pension market," said Helen Huang, managing director of Fidelity International China. The company has recently gained Chinese regulatory approval to conduct retail business in the country's vast mutual fund industry, shortly after US asset manager Neuberger Berman got the same regulatory nod.
"The market might attract 5 trillion yuan to 10 trillion yuan in 10 years," Huang said.