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Land of opportunities: why China keeps drawing more foreign investment

Foreign enterprises are eyeing new opportunities in the Chinese market as the country remains one of the top investment destinations despite multiple headwinds besetting the global economy.


Land of opportunities: why China keeps drawing more foreign investment
China, Credit- Denys Nevozhal

Foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded 37.9 per cent year on year to 243.7 billion yuan in the first two months of this year, the latest data from the Ministry of Commerce showed. In U.S. dollar terms, the inflow went up 45.2 per cent year on year to 37.86 billion dollars.



The strong growth built on a record high of 1.15 trillion yuan in FDI in 2021, with China's sound economic fundamentals and constantly improving business environment retaining an appeal to foreign capital.


A super-large market with upgrading consumer demand, as well as an ongoing transition to more sustainable development, has brought some of the most exciting opportunities for foreign investors.


PURSUIT OF HIGHER-QUALITY LIFE


Starting from only a small office room in China, Amorepacific Corporation, a beauty and cosmetics conglomerate from the Republic of Korea, was one of the beneficiaries of China's rapid growth during the past 30 years.


Boasting an industrial park in Shanghai, Amorepacific now offers a wide range of products and services from skin-care to colour cosmetics at more than 5,000 stores in 250 Chinese cities.


Amorepacific China's growth was chiefly driven by the rise of Chinese people's living standards, said Mike Hwang, president of Amorepacific China.



"Chinese consumers will demand higher-quality life as government goals such as common prosperity foster a fuller and more balanced development of the country's market. This has provided us with a new direction for business development and generated a new impetus for growth."


The success of Amorepacific mirrored China's years of efforts in securing a better life for its people, which has nurtured enormous business opportunities for global investors.


China's middle-income group has increased from over 100 million in 2010 to more than 400 million in 2019, accounting for about 30 per cent of the total population.


The just-concluded Beijing 2022 Winter Olympics and Paralympics have created new consumer trends, with sports like skiing quickly gaining popularity and kindling new interests among investors.


Decathlon, a leading global sporting goods retailer, is one of a large number of companies that have jumped on the bandwagon to tap into the new opportunities.


"The sports industry is closely tied with economic development," said Daisy Wang, Decathlon China vice president, who noted that Chinese consumers are increasingly pursuing healthy lifestyles and interested in niche activities such as skiing and camping. "We are playing an active role in it."


Noting that China's spending on sports is expected to take up more than 4 per cent of the total GDP by 2035, Wang said "Decathlon has every confidence in the future of the Chinese sports market."



SUSTAINABLE GROWTH


As an essential part of high-quality development, China's low-carbon path has served as a new boost for green development globally.


For Vale, a global mining company, the country's endeavour in realizing the transition to a low-carbon economy, contains huge opportunities.


The Chinese market has remained the largest market for Vale since 2006. In 2021, as one of the founding members, Vale joined the Global Low-Carbon Metallurgical Innovation Alliance that was initiated by China Baowu Steel Group, the world's largest steel conglomerate.


"Vale always puts China in the centre of our business strategy," said Tracy Xie, president of Vale China, who noted that the company is confident in contributing to China's green transformation through its product portfolio and technical solutions.



China has pledged to have carbon dioxide emissions peak before 2030 and achieve carbon neutrality before 2060, making the world's biggest cut in carbon emission intensity in the shortest time frame in history.


A report from the French bank Societe Generale estimated that China's green investment needs to reach 2.2 trillion yuan per year in the current decade, and the amount will grow to 3.9 trillion yuan in the period from 2031 to 2060.


"We are seeing great potential in China's green finance," said Peter Qiu, president of Deutsche Bank (China) Co., Ltd. The company will fully leverage its role in financing sustainable development to help Chinese enterprises better seize the opportunities brought by the green transition.


Source: Xinhuwa, Editor- huaxia

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