Eyeing vast opportunities, multinationals flock to China

Beijing: Multinational corporations are eager to increase their investments in the prosperous Chinese market as the new year begins. Despite a challenging global environment and lackluster economic recovery, these companies continue to see untapped potential in China.

China offers promising opportunities for businesses from different countries to expand, thanks to its solid infrastructure, extensive consumer market and favorable investment climate that is constantly improving.

Ola Kallenius, chairman of the board of management of Mercedes-Benz Group, said that the company has made significant strides in China over the years, laying a solid foundation for future growth.

With China’s mature economic development and immense market size, there remains substantial growth potential in the long run, said Kallenius in an interview with Xinhua, adding that his company hopes to seize this opportunity and further deepen its strategic presence in China.

Germany’s Volkswagen Group, another multinational automotive company, is pushing for complete production, research and procurement localization. Last November, the group revealed that Volkswagen China Technology Company (VCTC), its largest development center outside Germany, plans to unveil an electric platform for the entry-level segment within 36 months.

“With the development of a China-specific platform for the entry-level segment, we are taking on significant development tasks for our ‘in China for China’ strategy,” Ralf Brandstaetter, chairman and CEO of Volkswagen Group China, said.

The rise of China’s electric vehicle industry has provided ample business opportunities for French automotive equipment manufacturers such as Valeo and Faurecia.

Faurecia’s 2023 third-quarter financial report revealed an 11.8 percent increase in sales in the Chinese market, showcasing robust performance.

Patrick Koller, chief executive of Faurecia, has repeatedly emphasized the Chinese market’s strategic importance for the company on different occasions, saying the increasing influence within China’s automotive sector is expected to further drive the development and progress of Faurecia’s automotive electronics supply chain.

Christian Dreger, senior research fellow at European University Viadrina Frankfurt (Oder), told Xinhua that the European market and enterprises pay significant attention to China’s economic development.

The scale of China’s market, the population’s level of education, high-quality infrastructure, and China’s influential role in driving economic growth in Southeast Asia are all crucial factors for the recovery of the European economy, Dreger said.

China’s huge market has attracted increasing investments from multinational manufacturing, international food services, high-tech companies and financial institutions, showcasing its resilience amid a sluggish global economy.

Global food service giants continue to thrive. Take Yum China, the operator of KFC and Pizza Hut restaurants in the country. The company reported steady growth in operations and added 500 stores as of the third quarter of 2023. It now operates over 14,000 restaurants and aims to have 20,000 stores in China by 2026.

Leading U.S. company Apple revealed that the Greater China market accounted for one-fifth of its revenue last year. CEO Tim Cook said China’s market is vital for Apple, and he remains “very optimistic” about the company’s long-term prospects there.

For Apple, China is a crucial source in the supply chain. One hundred and fifty-one of the company’s 200 major suppliers, including foreign and Chinese, have a manufacturing presence in the country.

The robust support from China’s industrial ecosystem also boosts production efficiency. Tesla’s Shanghai plant, the U.S. carmaker’s first gigafactory outside the United States, delivered 947,000 vehicles in 2023 and can produce a car in less than 40 seconds.

US-based Citigroup plans to establish a wholly-owned China investment banking unit as early as the end of 2024 and hire roughly 30 people. It will focus on the domestic capital market, with plans to expand its workforce to nearly 100.