FOREIGN companies once used to send their managers, sales experts and engineers, along with product samples, to big Chinese cities such as Beijing, Guangzhou and Shanghai to set up representative offices and test the viability of the Chinese market.
This was particularly so during the 1980s, and by the 1990s many of these companies began building factories in China, their number surging after the country joined the World Trade Organization in 2001.
With products made in China being supplied to both domestic and international markets, foreign companies such as Schneider Electric of France and Bosch Group of Germany increasingly appointed Chinese executives to head their operations in the country. This move was part of broader localisation efforts that included setting up research and development centres in China.
As the People’s Republic of China celebrates the 75th anniversary of its founding this year, senior executives of multinational companies said the country’s recent economic reforms are poised to bolster the global supply chain network and deepen the integration of foreign investment with the country’s economic growth.
For global firms that produce and distribute products and services, China has evolved into a place for promoting growth and innovation.
Anna An, president for the China unit of Henkel AG & Co, a German industrial and consumer goods manufacturer, said that since entering China more than 50 years ago her company has grown with the country, continuing to invest so as to promote talent and industry growth.
“We will continue investing in China to further support our customers with innovative and sustainable solutions and products in sectors where we see strong future demand, such as consumer electronics, new energy vehicles, advanced manufacturing, packaging and consumer goods.”
Nat Madarang, president for Asia Pacific with Goodyear Tire and Rubber Co of the United States, said China is crucial to the company’s global business strategy, and that China’s new reform initiatives, aimed at expanding opening-up and fostering industrial upgrades and technological innovation, align well with his company’s objectives.
“We see substantial opportunities in China’s reform and opening-up initiatives and remain dedicated to deepening our presence and investment in China and the broader Asia-Pacific region.”
Goodyear said it has benefitted from the Regional Comprehensive Economic Partnership, shipping tires made in China to Japan and a number of Southeast Asian countries.
Driven by factors such as rapid industrial upgrading, shifting business models and growing demand for personalised products, many multinational companies have recognised that Chinese consumers and the business environment are continuing to evolve, said Tang Yihong, a professor specialising in cross-border investment at the University of International Business and Economics in Beijing.
In response, these companies have established more innovation and service centres to meet local demand in China, she said.
From January to August China’s actual use of the foreign direct investment reached 580.2 billion yuan ($81.8 billion). Affected by a high base in the corresponding period last year, the scale of such investment fell year-on-year but remained relatively high in the context of the past decade, the Ministry of Commerce said.
In particular, nearly 37,000 foreign-funded companies were newly established in China in this period, 11.5 per cent more than in the corresponding period last year.
Between January and August the foreign trade value of foreign-invested businesses was 8.4 trillion yuan in China, 1.5 per cent more than in the corresponding period last year, accounting for 29.4 per cent of the country’s total foreign trade value, the General Administration of Customs said.
# The Global New Light of Myanmar