BEIJING, May 22, 2024
/PRNewswire/ -- Official data has
repeatedly shown that China remains
as a top investment destination, and China's economy has become an
important engine and stabilizing force for global economic
growth.
During recent visits to several foreign companies in Wuxi,
Global Times reporters found that foreign firms continue to view
China as a favored investment destination, driven by the country's
steadfast commitment to opening-up. Eyeing enormous market
opportunities, those executives said "wise people will continue to
choose the Chinese market."
Flocking to China
It takes less than four hours to arrive at Wuxi East Railway Station after boarding
G27 high-speed train from Beijing South Railway Station.
Official data showed that Wuxi, a city in the Yangtze River
Delta region, acknowledged as one of the powerful engines of
China's opening-up endeavor, is home to more than 7,200 foreign
companies including 222 companies backed by 110 Fortune 500
companies.
TLD Asia (Wuxi) Ltd is one of them. Founded in 2008 in Wuxi, the
company mainly produces ground support equipment such as aircraft
tractors, cargo lifting platforms, baggage tractors and sewage
treatment trucks, with customers including airlines, airports and
ground handling services providers.
"Our products made in Wuxi and Shanghai are available everywhere that is home
to airlines or airports," Wu Jianqiang, chief operating officer of
company, told the Global Times.
Wu explained that the French-based TLD entered into China in
1997 in Shanghai, and the
executives of the company found the plant in Shanghai could not meet the demand after
years' development, so they set up the Wuxi factory.
US-based manufacturing giant Jabil Inc followed a similar
path.
The company launched its businesses in Guangzhou in South
China's Guangdong Province
and Shanghai in the 1990s, and
expanded to new cities as its businesses grew. Wuxi became a clear
choice on the back of supportive policies put in place by the local
Wuxi government, according to Xiao
Yong, general manager of Jabil Circuit (Wuxi) Co, a
subsidiary of Jabil Inc.
Wuxi was chosen not only for its supportive policies, but also
for the cluster effect the city has formed. Lots of companies in
the list of Fortune 500 Companies had also established a presence
here, Xiao said.
Currently, the company has more than 50,000 employees across 13
factories in China.
Expansion is common to see in tandem with China's reform and
opening-up over the past 40 years. Data showed that multinational
companies remain optimistic about the development opportunities
offered by the China market.
Statistics from the Chinese Ministry of Commerce showed that
from January to February this year, the number of newly established
foreign-invested enterprises reached 7,160, a year-on-year increase
of 34.9 percent, representing the highest level over the past five
years.
A report released in January by the German Chamber of Commerce
in China revealed that more than 90 percent of the German companies
surveyed planned to continue to operate in the China market, and
more than half of German companies planned to increase investment
in China over the next two years.
Fierce competition
Chinese experts said the success of foreign companies in China
has a close connection with China's talent pool and huge market
size.
For example, the population of Wenzhou in East China's
Zhejiang Province is about 9.76
million, which is higher than the population of some European
countries such as Hungary,
Austria and Switzerland. Foreign companies continue to
explore more opportunities in China's second- and third-tier and
even smaller cities, Chen Fengying, an economist and former
director of the Institute of World Economic Studies at the China
Institutes of Contemporary International Relations, told the Global
Times.
Foreign enterprises have faith in the entrenched advantages of
the China market relating to market size, industrial support and
business environment, while, the market has gradually developed
into the most fiercely competitive battlefields in the world,
market analysts said.
Thanks to an early investment into leading technology, we still
could maintain a leading position in the industry. But now, our
biggest concern is a local producer in Weihai, East China's
Shandong Province, although
currently its market share is less than one-third of ours, said Wu
from TLD Asia (Wuxi).
We do not take lightly the comprehensive strengths of other
Chinese companies when it comes to their technological level and
manufacturing capabilities which are developing very quickly, he
noted.
The cost of labor in China used to be relatively low in the
past, offering a sharp comparison of the competitiveness of local
enterprises and the foreign ones. But the comprehensive strength of
local enterprises is increasing with the rapid development of
China's industrial manufacturing and digital economy, and the
competitive pressure faced by foreign enterprises in China is
naturally increasing, Cao Heping, an
economist at Peking University told the Global Times.
"This is the inevitable outcome of the development of China's
market economy," Cao said.
Foreign competitors continue to invest heavily in technological
innovation too.
Wu said that it has become an urgent priority to develop
unmanned driving and unmanned operations to address a shortage of
manpower following the COVID-19 epidemic.
When transporting cargo to the cabin, the cargo loader and cargo
should get as close to the cabin door as possible but must not hit
the cabin door, otherwise the aircraft will be damaged. In the
past, skilled workers were required to be present, but now an
automatic safe approach system independently developed by the
company is used instead, Wu explained.
Competition in China has made us run faster than our European
and North American peers. To a certain extent, it is our companies
in China that are driving the French group moving forward, Wu
said.
Chinese experience
During interviews, many companies highlighted the importance of
China's speed in the competition with local players.
Zhu Daigui, deputy general manager of KACO Wuxi sealing system
Co, said one of the big challenges here was to introduce a flexible
sales policy that adapts to market conditions.
KACO, a German company founded in 1914, is a manufacturer of
special rubber seals. It has been providing high-end seals to
global giants such as Audi, BMW and Volkswagen. In recent years, it
has attracted more Chinese customers such as BYD and NIO.
In the past, the German firm would use "standardization" to turn
down the requirements to adjust the size, and I had to visit the
headquarter to communicate and promise to shoulder all the
responsibilities. The deals reached afterward has brought huge
profit, and helped win their trust, Zhu said.
This was not a risk, but a judgment based on comprehensive
consideration of the China market and the company's technologies.
Abandoning rigidity and adopting flexible strategies is a valuable
experience gained in China, Zhu noted.
"What we learn here is speed, such as dealing with problems
quickly and move forward quickly. It doesn't matter even if you
fail. The accumulated experience in China has helped us participate
in international competition," echoed Wiekert Visser, chairman of
Tehmag Zeelandia, a century-old enterprise from the Netherlands which has deeply rooted in
Wuxi's Xishan district for over 20 years.
Meanwhile, localization is an important way out.
In June of 2023, Jabil won the 2023 Manufacturing Leadership
Award issued by the National Association of Manufacturers, for an
innovation of AI Automatic Visual Inspection Driven by 5G and Edge
Computing, the first time for Jabil has won this honor since its
establishment.
Our Wuxi factory is an innovative factory with more than 100
patents under our name and it is currently the only "mega factory"
in the group that integrates R&D, prototype trial production,
manufacturing and after-sales maintenance and testing service
capabilities among Jabil's more than 100 factories around the
world, Xiao said.
Participating in the fiercest market competition will help
companies focus on technological innovation and enhance global
competitiveness.
"If you can't stay in China in the next five to seven years, it
may take decades to catch up, or you may be eliminated," Cao
said.
Wise choice
Interviewees said it has become common for foreign corporate
headquarters to rely on the China market to participate in global
competition and the wise people will surely continue to choose the
China market.
"Looking around the world, which country's market can achieve
growth? China can!" said Visser, adding that the China market still
has great growth potential, and discussion is ongoing how to expand
more in China market.
The market share of Chinese companies in our group has increased
from less than 10 percent initially to more than 20 percent, making
a great contribution to the group's performance. In comparison, the
share of Europe market is
declining, Visser said.
On April 14, Federal Chancellor of
Germany Olaf Scholz arrived in Chongqing Municipality for a
three-day official visit to China.
Scholz was accompanied by senior representatives of a number of
renowned German companies, including Siemens, Bayer, Mercedes-Benz,
BMW, and Zeiss. More than 5,000 German companies are operating in
China, as China has been Germany's
largest trading partner for many years, Xinhua News Agency
reported.
"Companies around the world put
profits first, and everyone want to have a better life," Visser
said.
"Wise people will continue to choose the Chinese market," he
remarked.
As for Jabil, Xiao said the Wuxi factory is Jabil's largest
communications production base. From the earliest 2G to the current
5G, the company is growing up with China's technology development
in the past 20 years.
"I believe that we will still have great potential in Wuxi and
the China market in the future," Xiao said.
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SOURCE Global Times