Multinational corporations committed to rising Chinese market
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Multinational corporations are more committed to China as the fast-growing market offers huge opportunities, executives said at the annual Boao Forum for Asia (BFA).
China became the largest bright spot as it led the world out of the worst financial crisis since 1930s thanks to massive economic stimulus and explosive growth in bank lending.
The strong recovery has made the world's third-largest economy a buffer zone as many multinational businesses suffered heavily in most parts of the world.
Chris Lu, chief executive of Deloitte China, said it invested further 100 million U.S. dollars in China last year after launching a five-year investment program totalling 150 million U.S. dollars in 2003.
This was the U.S. accounting firm's largest investment in the global market amid the economic downturn.
"The fund was raised from our partners throughout the world who shared consensus that the money should be invested in China," Lu said.
Global investors were more concerned about returns in financial crisis, Lu said. "Money should be invested in the safest and most valuable market and China is such a market," he said.
Many overseas businesses are sponsors of the BFA, a pan-Asian forum that attracts about 2,000 political and business heavyweights and academics from Asia and around the world to a small town in south China's Hainan Province.
Deloitte has been among the sponsors for years. This helps to boost brand recognition in China, Lu said.
The financial crisis has dampened global investment, but transnational businesses still have high interests in China.
A BFA report released this weekend showed that China remained the hottest investment destination in the Asia-Pacific region despite the financial crisis.
Foreign businesses had invested nearly 1 trillion U.S. dollars in 680,000 operations in China by the end of 2009 and more than 480 of the Fortune 500 companies had presence in China, according the Ministry of Commerce.
Ding Lei, general manager of the Shanghai GM, said sales at the joint venture between U.S. carmaker General Motors and SAIC group jumped 58 percent annually last year and surged 101 percent in the first quarter of the year.
"The financial crisis pushed GM to file for bankruptcy, but its sales in China are amazing," Ding said.
Guan Dongyuan, deputy president of Brazilian aircraft maker Embraer, said that overseas investors saw future growth opportunities in the huge Chinese market.
By the end of 2009, only 8 percent of all commercial aircraft in China were regional jets with less than 120 seats each, compared with 43 percent in the United States and 36 percent in Europe.
This means a huge potential for regional jet market in China, Guan said.
Green growth opportunities
The bullish outlook came on strong growth in China's consumption as the country is committed to boosting domestic demand to transform the pattern of economic growth.
The move also offers investment opportunities to foreign green businesses. China will soon release new regulations on attracting overseas green investment, Zhang Xiaoqiang, deputy minister of the National Development and Reform Commission, said Saturday.
"We welcome foreign investment that is conducive to the transformation of economic growth pattern, but polluting and energy-gorging projects are no longer welcomed," he said.
In addition, China's cabinet has launched an initiative to better develop ten new industries including clean energy, new resources, new-energy cars, and information technology.
Danfoss, a Danish engineering group long committed to energy saving and pollution reduction, launched a new plant in north China's Tianjin City two days before the forum opened on Saturday.
The mechanical and electronic components maker has said its sales in China amounted to 3 billion yuan (439.6 million U.S. dollars), making the country its third-largest market.
The green growth drive is making China more important to multinational cooperations for global expansion as more set up research and development (R&D) centers and regional headquarters in the country.
By the end of 2009, the transnational corporations had set up 1,200 R&D centers in China, according to the Ministry of Commerce.
Zhang Yaqin, a vice president of Microsoft Corporation, said foreign businesses investing in China set up only production centers when they first entered into the country.
Step by step, they opened marketing centers and R&D centers. Now China has risen to be a strategic development center for many multinational companies, Zhang said.
"Microsoft China has become another strategic headquarters besides its global headquarters in the U.S.," said Zhang. "We regarded China as the largest market outside the U.S..".
