By Zhong Sheng
The door of China’s opening-up will only open wider and wider, the business environment will only get better and better, and the opportunities for global multinationals will only be more and more, Chinese President Xi Jinping said in a congratulatory letter to the first Qingdao Multinationals Summit.
Held in Qingdao, east China’s Shandong province from Oct. 19 to 20, the event showcased China’s determination to open wider amid sluggish global trade and investment.
115 companies on the Fortune Global 500 list for 2019, 284 leading enterprises and over 5,100 guests participated in the summit themed “Multinational Companies and China”. The attendance indicated that multinationals value the opportunities China offers and that they are confident about the country’s further opening-up.
Multinationals’ investment has been instrumental in China’s development. In the past 40-plus years of China’s reform and opening-up, nearly one million foreign-invested enterprises have brought $2.1 trillion of investment, advanced technologies and equipment, high-quality products and services, management skills and innovation resources to China.
As important participants, witnesses and beneficiaries of the country’s reform and opening-up, multinationals have connected China with the rest of the world. It is through those interactions with the world that China has realized long-term and rapid development.
In recent years, economic globalization has encountered headwinds and multinationals were requested to withdraw from China and decouple themselves from Chinese economy by certain forces. Such headwinds may be strong, but they will never shake the cooperation foundation between China and multinationals.
China has been the largest recipient of foreign investment among developing countries for 27 consecutive years since 1992. Last year, China maintained growth in FDI, bucking a global trend of slide.
In the first three quarters this year, over 30,000 foreign-invested enterprises were newly set up in the country, with the actual use of foreign capital growing by 6.5 percent year on year. Now, about 490 companies on the Fortune Global 500 list have invested projects in China.
Facts have proved that China and multinationals enjoy closer contacts and make greater strides towards common development, creating a snowball effect.
The interaction between China and multinationals fully proves that seeking win-win results through greater openness and cooperation is the right way to develop at any time.
A major reason why China adheres to opening-up is that foreign investment has contributed to the country’s development.
The Chinese Academy of International Trade and Economic Cooperation released a report titled “Multinationals in China: 40 Years of Investment” at the Qingdao summit.
According to the report, foreign-invested enterprises, which account for less than 3 percent of the total number of enterprises in China, contribute nearly half to the country’s foreign trade, one fourth of the output value and profits of industrial companies above the designated scale, and one fifth of tax revenue.
China has always been a favored place for transnational corporations thanks to the high return from the Chinese market.
Statistics from the Bureau of Economic Analysis under the US Department of Commerce show that the return on investment for US businesses in China in 2018 was 11.2 percent compared with a global average return of 8.9 percent for American companies.
China has always been one of the most attractive investment destinations in the world, said a manager with a multinational company present at the summit.
To achieve win-win cooperation requires an open and inclusive environment and mind. For decades, China has further opened up, broadened market access and improved business environment, providing an inclusive environment for foreign investment.
In the past three years in particular, the country has revised the negative lists on foreign investment for three times, reducing 57 percent of investment restrictions. Such open and inclusive investment environment has made it favored by foreign companies.
Chinese enterprises, through decades of learning and development, have deeply integrated into the global industrial, supply and value chains, gradually raising their competitiveness.
It should be recognized that the enhanced competition does not mean the Chinese market is unfriendly to foreign investors. On the contrary, only competition can enhance vitality and competitiveness of enterprises.
It has become a global phenomenon that multinationals choose to test themselves in the Chinese market so as to become more competitive in the global market. With such an open and inclusive mind, multinationals will have a broader vision and enjoy greater development.
China is glad to share its enormous business opportunities with the rest of the world to realize common development and score more remarkable achievements through open cooperation.
(Zhong Sheng is a pen name often used by People’s Daily to express its views on foreign policy.)
