investment

French businesses upbeat on China market

China France Photo:VCG

China France Photo:VCG

 

French businesses have expressed growing confidence in investment in the China market, as a state visit by Chinese President Xi Jinping to France is set to strengthen bilateral ties and economic and trade cooperation. 

French direct investment in China has been skyrocketing in recent months, highlighting the great attractiveness of the China market among French companies amid China’s steady opening-up measures, experts said. 

The state visit will bolster the confidence of both Chinese and French businesses to pursue win-win cooperation, they noted. 

“President Xi’s visit to France reinforces the potential for the two countries to open up a new future of collaboration on the 60th anniversary of bilateral diplomatic ties,” Paul Hudson, CEO of Sanofi, a French multinational pharmaceutical and healthcare company, told the Global Times. “The two countries have opportunities to strengthen their bilateral relationship while also further collaborating to address global topics.”

Hudson said that the company has seen a great expansion in the China market over the past several decades and will continue to expand in China, amid growing potential and the improving business environment. 

“As one of the first multinational companies to enter China since its reform and opening-up more than 40 years ago, our footprint has grown significantly over the years as a result of openness and collaboration between our two countries,” Hudson said.

“China staying focused on high-level opening-up and actively improving the environment for foreign investment incentivizes pharmaceutical innovation for patients in China and beyond.”

Sanofi is hardly alone in expanding in the China market. In 2023, France was one of the fastest-growing sources of direct investment in China, with direct investment surging 77 percent year-on-year to $1.34 billion, according to China’s Ministry of Commerce (MOFCOM). 

L’Oreal Chairman Jean-Paul Agon also said that the company remains committed to the China market.

“I can assure you that we are more determined than ever to contribute, together, to the mutual development of our two countries. To this end, I believe it is essential to reiterate the imperative need for an ongoing dialogue between us,” Agon said.

That trend has only intensified this year, with French direct investment in China surging 585.8 percent year-on-year in the first two months of this year, data from the MOFCOM showed.

A survey of French companies in China conducted by the French Chamber of Commerce and Industry in China in 2023 showed that members’ willingness to operate in China over the coming three years had increased, with 47 percent saying they planned to further invest in the Chinese market. 

French companies are interested in cooperation with Chinese companies in a wide range of areas including pharmaceuticals and clean energy. During the fifth meeting of the China-France Business Council in April 2023, 36 Chinese and French businesses signed 18 cooperation agreements in the areas of green energy, innovation, aerospace and new energy.

“In China specifically, we are bolstering local innovation and investment by prioritizing early-stage [research and development], involving China in 90 percent of our global simultaneous projects,” Hudson said. 

The growing commitment of French companies to the China market is mainly due to China’s continuous opening-up measures, efforts to improve the business environment for foreign companies, as well as China’s steady economic recovery and its vast market potential, experts noted. 

Cui Hongjian, a professor at the Academy of Regional and Global Governance at Beijing Foreign Studies University, said that the state visit will send a clear signal to French and European businesses that China remains committed to continuous opening-up in an all-round way. 

“This will further strengthen the confidence of French businesses and investors in the China market,” Cui told the Global Times on Monday, noting that remarkable growth in French direct investment in China in recent months has already showed growing confidence in China.  

07/05/2024 by news

Ample China-Saudi synergy shown as Aramco seeks Hengli Petrochemical stake

Illustration: Xia Qing/GT

Illustration: Xia Qing/GT

Saudi oil giant Aramco said on Monday it is in talks with Hengli Group to acquire a 10 percent stake in a subsidiary of the Chinese firm that specializes in refining and petrochemicals. The negotiations mark the latest efforts by Aramco to bolster its downstream presence in China.

Middle East investors looking to gain more exposure in China are increasingly attracted to the nation’s fast-growing consumer market and abundant opportunities for supply chain cooperation. Aramco’s case serves as a good example of this trend.

With a memorandum of understanding signed between Aramco and Hengli, the Saudi oil giant stated that the deal aligns with its strategy to expand its downstream presence in key high-value markets, advance its liquids-to-chemicals program and secure long-term crude oil supply agreements.

The global shift toward a low-carbon economy poses a threat to energy companies’ business models and long-term profitability, prompting them to enhance their competitiveness through innovation. Take the example of Aramco, observers believe that China is becoming increasingly important for Aramco’s ambitions to convert 4 million barrels per day of its oil production into higher-value chemicals. That is why the Saudi oil giant has been closely monitoring opportunities in China’s petrochemical industry.

In 2023, Aramco acquired a 10 percent stake in Shenzhen-listed Rongsheng Petrochemical. Aramco’s joint-venture company, Huajin Aramco Petrochemical Co, announced last year that it planned to start construction of a major integrated refinery and petrochemical complex in Northeast China.

As these efforts continue to advance, cooperation between China and Saudi Arabia has seen diversified development beyond traditional energy trade. Saudi Deputy Minister of Investment Saleh Khabti was quoted by the Xinhua News Agency in October 2023 as saying that China has strengths in infrastructure, high-tech and logistics, so the possibilities of the two countries’ business cooperation are “unlimited.”

Saleh Khabti also mentioned that Saudi Arabia’s investment in China more than doubled in 2023 and Saudi Arabia is open to Chinese investors.

Saudi Arabia has also become a focus of investment by Chinese companies. The economic structures of the two countries are highly complementary. China is a major energy importer with a mature manufacturing sector and a complete industrial chain. Saudi Arabia’s economy is undergoing a transformation, as it implements reforms to reduce its oil dependence, invests in the downstream petrochemicals industry and diversifies its income sources.

This expanding and diversified bilateral cooperation is a clear example of how China remains an important market and investment destination for Middle East investors, despite some Western media outlets spreading a false narrative that China’s attractiveness to foreign investment has declined. 

Cooperation between China and the Middle East is primarily focused on common development, without any conspiracies or political motivations. This partnership aligns with the regional economic development needs and will inject new driving forces into the economic and social development.

China’s high-level economic opening-up includes increased institutional openness, expanded market access and improved services for foreign investors. As China continues to further open its doors to foreign enterprises and attract more investment from other countries, it will facilitate the opening-up of sectors such as energy, refining and petrochemicals to create more trade and investment opportunities for foreign investors.

For some time, there have been reports and comments in Western media outlets hyping claims of “foreign capital fleeing China.” These reports do not match the facts. With China continuously improving the quality of investment and promoting the development of mutually beneficial cooperation, it is moving toward high-quality development.

Aramco’s enthusiasm for China’s market serves as evidence of China’s good performance in attracting foreign investment and accelerating development. China will follow its own speed and rhythm in opening up its economy to foreign investors. 

Western observers don’t need to point fingers at China, because their biased narratives that “foreign capital is fleeing China” won’t affect China’s attractiveness to foreign investment.

The author is a reporter with the Global Times. [email protected]

24/04/2024 by news

IDC: China’s GenAI sector investment surges, projected to reach $13 billion by 2027

AI Photo: VCG

AI Photo: VCG

Driven by rapid technological advancement, China is expected to see a compound annual growth rate (CAGR) of 86.2 percent for generative artificial intelligence (AI) investment between 2022 and 2027, according to a newly released report from Research firm IDC, showcasing the robust prospects of the country’s high-tech sector.

Thanks to the government’s rising efforts to accelerate high-quality development, China’s generative AI spending is set to reach 33 percent of the world’s AI investment by 2027, up from 4.6 percent in 2022 with the generative AI investments probably reaching $13 billion, according to the report.

China’s performance is outstanding amid overall global growth in the industry, which is projected to reach $512.42 billion by 2027, with a CAGR of 31.1 percent, IDC forecasted in its Worldwide Artificial Intelligence Spending Guide.

The report also underscored China’s leading position in AI investment within the Asia-Pacific region, surpassing half of the total investment in the region. As of 2027, China`s AI investment is set to exceed $40 billion, representing a CAGR of 25.6 percent. 

Generative AI is poised to become a pivotal technology in enterprise automation. Banking, retail, software, and information services are cited as the top three spenders driving its innovation and growth, collectively constituting nearly a third of the market, according to the report.

Since 2014, China’s AI development has been accelerating, driven by the surging application demand within the domestic market. According to an official with the Ministry of Industry and Information Technology (MIIT), China’s AI industry output value reached 580 billion yuan ($80.23 billion) in 2023, up 18 percent year-on-year. The number of major AI-related enterprises has exceeded 4,400, ranking second in the world.

China’s AI development has been rising rapidly amid the government’s ramped-up efforts to develop new quality productive forces. The country has announced a slew of plans to enhance industrial innovation, and accelerate AI-driven manufacturing, led by large language models, to speed up the establishment of a modern industrial system, an official from MIIT said recently.

Global Times

05/04/2024 by news

More provinces are running fairs to further attract and utilize foreign investment

A city view of Guangzhou in South China's Guangdong Province Photo: VCG

A city view of Guangzhou in South China’s Guangdong Province Photo: VCG

China is doubling down on efforts to attract foreign investment as more provinces are running fairs to further attract and utilize foreign investment over coming days, reflecting China’s determination to further opening-up. 

China’s recent measures related to opening-up and upcoming events have offered a clear path forward for operation and investment in China, according to multiple CEOs from global companies when contacted by the Global Times, and Chinese market watchers said that China’s attraction to foreign investment remains strong.

Guangzhou, South China’s Guangdong Province will hold a global investment conference from April 8 to 9. Focusing on developing new quality productive forces, the conference has attracted more than 2,000 guests including representatives from more than 300 global companies, and they will conduct communications around digital economy, green energy, intelligent manufacturing and biomedicine, according to the Guangzhou Municipal Commerce Bureau on Tuesday. 

The upcoming China International Consumer Products Expo, which will be held from April 13 to 18 in Haikou, South China’s Hainan Province, is expected to welcome more than 3,000 brands from 59 countries and regions.

The event will be China’s first significant international expo this year, as the country continues to promote consumption growth, according to the Ministry of Commerce (MOFCOM). 

These activities have sent a clear signal that the Chinese government welcomes and supports foreign investors to invest in China, Guo Tao, an industry analyst told the Global Times.

 

China not only shows the potential and opportunities of its market, but also its determination to improve the business environment and strengthen international cooperation. This has a positive effect on enhancing the investment willingness of multinational companies, Guo added.

Tim Cook, chief executive officer of Apple Inc, exchanges business cards with participants at the China Development Forum 2024 in Beijing, on March 24, 2024. About 400 people, including experts, entrepreneurs, government officials and representatives of international organizations, attended the opening ceremony of the forum. Photo: VCG

Tim Cook, chief executive officer of Apple Inc, exchanges business cards with participants at the China Development Forum 2024 in Beijing, on March 24, 2024. About 400 people, including experts, entrepreneurs, government officials and representatives of international organizations, attended the opening ceremony of the forum. Photo: VCG

Those events also came after a series of activities of promoting high-quality opening-up by Chinese governments following the China Development Forum concluded on March 25 which attracted around 400 guests from global companies and institutions. 

On April 1, MOFCOM held a roundtable in Chongqing with 26 foreign companies including Intel and BASF, after a roundtable was held with 12 Danish enterprises in Beijing on March 29.

MOFCOM vows to promote the development of Danish enterprises in China on the back of supportive policies, and Danish representatives also expressed optimism about Chinese market potential and were committed to further strengthening investment and cooperation with China.

Chinese experts also said that high-tech and high value-added industries have become a new driving force for the transformation and upgrade of China’s economy, which provides new investment opportunities for foreign capital.

Mats Harborn, president of Scania China Group told the Global Times that the company is developing deep relationships with Chinese suppliers to tap into the exciting, new technological innovations happening in China, such as electrification, autonomous driving and connected intelligent vehicles.

French multinational software company Dassault Systèmes said that Chinese government’s recent initiatives to attract foreign investment and improve the business environment have bolstered their confidence in China’s market potential. 

By closely collaborating with our Chinese partners and leveraging our expertise in digital technologies, we aim to transform challenges into opportunities, said Samson Khaou, Executive Vice President for Asia-Pacific at Dassault Systèmes.

A number of foreign investors are also expanding in the Chinese market, reflecting confidence in China’s economic growth.

On March 27, US memory chip giant Micron Technology’s new plant in Xi’an, Northwest China’s Shaanxi Province officially broke ground. 

Apple opened its new store to large crowds in Shanghai on March 21 with a reported impressive investment of over 83.4 million yuan ($11.54 million). On the same day, Panasonic signed a deal to produce eco-friendly integrated circuit products in Suzhou, East China’s Jiangsu Province. Pharmaceutical company AstraZeneca on March 1 announced to invest $475 million in a new drug factory in Wuxi, Jiangsu Province.

To further attract foreign investment, in March, China’s State Council, the cabinet issued 24 measures, which included targeted moves including expanding market access in the high-tech and financial sectors, facilitating cross-border data flows and promoting international business travel.

“The action plan demonstrates the government’s determination to remain an integral part of the global economy, which bodes well for foreign investors engaging in long-term business in China,” Harborn said. 

China is opening wider and wider to the world, and China’s mega-market will bring enormous opportunities to the world. Our message to businesses around the world: invest in China, flourish in China and succeed in China,Wang Wenbin, a spokesperson for Chinese Foreign Ministry said on Tuesday.  

In the first two months of 2024, China’s high-tech manufacturing has utilized 28.27 billion yuan of foreign capital, up 10.1 percent from a year ago, data from MOFCOM showed.

04/04/2024 by news

recent comments

No comments to show.