MNCs express confidence in nation's growth, expansion opportunities

SHANGHAI - Last week was a busy one in China, with some of the best-known international business tycoons embarking on visits and expressing hopes of expanding in the world's second-largest economy.

One of the most prominent visitors was Tesla's founder Elon Musk, whose first visit to China in three years has aroused widespread attention from businesses and individuals alike.

Musk arrived in Beijing on May 30 and was met by Foreign Minister Qin Gang and Minister of Commerce Wang Wentao. During the meetings, he praised China's vitality and potential, voiced confidence in the Chinese market and expressed his willingness to deepen cooperation.

Musk also visited Tesla's Gigafactory in Shanghai, the first of its kind outside the United States. He congratulated the Chinese team on their amazing work and "the positive energy of getting things done".

"It's been incredibly impressive how you have been able to overcome so many difficulties and so many challenges," he said in a visit to the factory on June 1, shortly before he left China.

"Throughout the world, the cars we produce here are not just the most efficient production, but also the highest quality," he added.

Tesla's Shanghai plant delivered 710,000 vehicles last year, an increase of 48 percent from 2021.

Shanghai will also be home to the company's new mega factory, which will be dedicated to manufacturing the company's energy-storage product Megapack. The new plant is scheduled to break ground in the third quarter of this year and start production in the second quarter of 2024.

Post-pandemic boom

Musk and Tesla are among a large number of international players that are eager to renew business ties with China and get a share of the post-pandemic boom in the world's second-largest economy.

On May 31 and June 1, the 19th J.P.Morgan Global China Summit attracted participants from 37 countries and regions in Shanghai, representing some of the world's most influential investors and businesses, with a combined market cap of $4.5 trillion.

Jamie Dimon, chairman and CEO of J.P. Morgan Chase, said the summit showcased global investors' confidence in the development of China and Shanghai.

At a roundtable with the media on May 30 ahead of the summit, Laxman Narasimhan, the new global CEO of US coffee giant Starbucks, suggested that the company's goal of opening 9,000 stores on the Chinese mainland by 2025 remains unchanged. Starbucks revealed the expansion plan last year, despite the impact of COVID-19.

Narasimhan highlighted China's huge market potential, saying: "Our ambitions in China are large. It's such a large consumer market."

Accor Chairman and CEO Sebastien Bazin said he comes to China four times a year and is always happy to visit. "You really have to know that China will be the largest hospitality market in the world ... a market you cannot miss," he said during a visit in April.

As Europe's biggest hotel group, Accor has 600 hotels in China with another 350 under development.

Powerful pull

China's GDP grew 4.5 percent year-on-year to 28.5 trillion yuan ($4 trillion) in the first quarter, according to figures released by the National Bureau of Statistics. The growth outpaced last year's 3 percent and the 2.9 percent reported in the fourth quarter of 2022.

With its faster-than-expected economic growth, China continues to exert a powerful pull for foreign investment, defying so-called "decoupling" from the country and providing a boon to the global economy.

For Judy Marks, chairwoman and CEO of Otis Worldwide Corp, by investing in China, the company is not just investing in products and facilities. "Most importantly, we invest in our future here," she said.

David Zehner, partner and head of the Asia-Pacific consumer products practice at Bain & Company, sees China as the most exciting consumer story in the world, describing it as "a real source of innovation that the rest of the world can learn from".

He was echoed by Bai Ming, a researcher with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce. "China is gradually becoming a source of global innovation," Bai said in an interview on June 1.

He said this was one of the major reasons why international firms have "cast a vote of confidence in China's economy".

The other reasons Bai cited include the prospects of China's huge market, the resilience of its economy and the mature industry chains of a global factory.

Latest data from the Ministry of Commerce show that foreign direct investment in the Chinese mainland, in actual use, expanded 2.2 percent year-on-year to 499.46 billion yuan in the first four months of this year and fell by 3.3 percent year-on-year calculated in US dollars ($73.5 billion).

Xinhua