China's appeal to foreign firms more than the size of its market

The series of recent visits to China by senior executives of global multinationals reflects their confidence in China's economic prospects and the attractiveness of China's market, manufacturing strength and innovation capability.

Three years after its Shanghai factory was put into operation, Tesla has grown to become the world's largest car company by market capitalization. During his recent visit to China, Tesla CEO Elon Musk said that Tesla's Shanghai factory is one of the most productive factories in the world.

At a time when developed economies are facing the risk of economic recession, the huge potential of the Chinese market is crucial for multinational companies to achieve stable performance. With its large population and growing middle-income group, China is an ideal market for multinational companies, and many US companies such as Procter& Gamble, Starbucks and Yum, are benefiting from China's economic recovery.

China's unique advantages in the supply chain are also attractive to multinational companies. According to a recent report released by PricewaterhouseCoopers, most multinational companies in China highly recognize the unique advantages of China's supply chain, saying China still has a strong advantage in the global manufacturing system thanks to the high efficiency of its labor and logistics, as well as its low tariffs.

In the face of the complex external environment, China has chosen to open wider to the outside world and introduced a series of favorable policies for foreign investment, which has significantly boosted the confidence of multinational companies investing in China. The Ministry of Commerce has said that it will study the further reduction of the negative list for foreign investment this year, and further cancel or relax restrictions on investment access.

China's ever-growing capability to drive global scientific and technological innovation also makes it an irresistable to many foreign companies. More and more multinational companies now regard China as an indispensable part of their development strategy. Since China improved its epidemic prevention and control measures, executives of many large multinational companies with global influence, such as Apple, Ford, General Motors, Astrazeneca, BHP Billiton and Siemens, have visited China and expressed optimism about China's development prospects and the hope their companies can continue to share the dividends of China's economic development. This trust will surely translate into a win-win situation for both China and multinational companies.

ECONOMIC DAILY