Manufacturing access latest opening-up move

China's recent announcement that it would completely remove market access restrictions on foreign investment in manufacturing sparked optimism among numerous foreign enterprises as they seek collaboration with Chinese entities for more growth opportunities, particularly in high-end manufacturing.

Experts view this initiative as a positive signal for China's active expansion of high-standard openness, injecting fresh momentum into global industrial development.

The remarks came after this year's Government Work Report, delivered during the recently concluded two sessions, said that all market access restrictions on foreign investment in manufacturing will be abolished, and market access restrictions in services sectors — such as telecommunications and healthcare — will be reduced.

Andrew Choy, global accounting firm Ernst & Young China's international tax and transaction services partner, said the latest announcement on the comprehensive opening of manufacturing signifies a crucial milestone in encouraging more foreign direct investment and collaboration.

"This demonstrates China's willingness to provide the largest market globally for foreign investors to explore innovation in advanced manufacturing and commercialize related innovative outcomes. This move also implies that China can accelerate the comprehensive upgrade of manufacturing," Choy said.

"In the context of the global restructuring of supply chains in many critical industries, China, through these policies, can make a more significant contribution to global industrial development. Many technologically advanced economies have expressed optimism about the Chinese market. Their manufacturing enterprises also showed a willingness to collaborate with Chinese entities in high-end manufacturing," he added.

Mathias Klein, chief sales officer of EMAG Group, a global manufacturing system supplier based in Germany, said: "We hope the delivery volume of our Chinese factories will double in the next three to four years. Correspondingly, this investment will require at least several million euros. This is the strategy we are implementing — continuous investment in China. We express our confidence in the Chinese market through action."

Norbert Wiest, general manager of the Asia branch of global machine tool manufacturer Schwaebische Werkzeugmaschinen GmbH — also based in Germany — said: "China is (a) nearly unbelievable (market) for SW, as the peak seems to be never reached even under unstable environmental situations in the last years. Therefore, SW believes in (the potential of) the Chinese market. In SW Group business, SW China is contributing more than 40 percent of the order intake in total in 2022, with now more than 100 customers, 1,000 machines and 400 employees in China."

Jiang Ying, a member of the 14th National Committee of the Chinese People's Political Consultative Conference and chair of market consultancy Deloitte China, said the removal of market access restrictions on foreign investment in manufacturing indicates that China will continue to actively expand high-standard openness, connecting the domestic market with the "two-way journey" of foreign investment, injecting a continuous new driving force into global industrial development.

In addition, the State Council, China's Cabinet, issued a 24-measure document last year addressing core concerns of foreign-funded enterprises such as intellectual property protections. This has showcased China's firm determination to promote further opening-up, thus greatly boosting the confidence of foreign-funded enterprises in China. Looking ahead, China's potential in innovation and green development will bring numerous opportunities for foreign enterprises, Jiang said.

According to the State Administration of Foreign Exchange, last year, foreign investment in China saw a net inflow. Specifically, net inflows from foreign equity-based direct investments amounted to $62.1 billion last year. There was also a net inflow of securities investments into China, reaching a near two-year high in scale during the fourth quarter.

"We have reasons to believe that the growth momentum of foreign investment in China will not only continue but will also further strengthen. Our global clients, including corporate executives and major investors, have expressed optimism about the Chinese market. They believe that China remains a hotbed for attracting foreign investment, with comparative advantages in new industries, technology talent pools and the overall business environment," Jiang said.

"I am optimistic about the foreign investment situation in China this year and believe that this growth trend will continue in the foreseeable future. The frequent new trends in foreign investment projects and the accelerating expansion of foreign-funded enterprises in China this year are positive responses to China's long-term stable economic growth and high-quality development policies. As China deepens reform and opening-up, especially in investment opportunities in high-tech, environmental protection and modern services, there will be increasing opportunities to attract more foreign capital," she added.