When commenting on recent controversy caused by some foreign companies operating in the Chinese market, some Western media jumped to the conclusion that foreign companies are in a difficult position here and their future faces growing uncertainty. But such argument is clearly at odds with the facts.
A new report by the United Nations Conference on Trade and Development (UNCTAD) showed that China became the world’s top recipient of investment flows in 2020, attracting $163 billion in foreign direct investment, up 4 percent year-on-year.
According to the “2021 China Business Climate Survey” by the American Chamber of Commerce in China (AmCham China), the business outlook of foreign businesses in China remains largely positive, as 61 percent of the respondents rank China at their top investment destination. These companies say they are confident that China will further open up its market. And 83 percent of the respondents said they do not consider moving their production plants outside China.
Foreign companies continue to be very optimistic about the Chinese market. On the one hand, the Chinese market is and will become increasingly attractive.
China is expected to overtake the US as the largest consumer goods market at the end of the 14th Five-Year Plan (2021-25) period. In the face of global overcapacity, purchasing power has become extremely important for companies from all over the world. As the US has been the largest market in the world for more than a century, it would largely boost many foreign companies’ confidence if China’s market size overtakes the US.
On the other hand, the Chinese government has been unwaveringly on moving forward with reform and expanding opening-up.
Even amid the US’ brutal trade war against China, China has cut the negative list for foreign investment. The business and legal climate for foreign companies in China has been significantly improved.
However, the growing hostility of US-led West camp toward China has provoked a backlash among Chinese people, complicating the climate of opinion for foreign companies in China. With the rapid rise of Chinese enterprises in various industries, foreign companies are facing increasingly fierce competition. In the face of the new market changes, foreign companies need to adapt rather than complain.
Chinese consumers’ admiration for foreign brands is waning, and their attitudes toward product quality and service, whether foreign or domestic, are becoming more mature and critical. Foreign companies should respect the Chinese market, respect Chinese consumers and competitors.
Foreign companies shoulder greater responsibility when it comes to respecting the Chinese market. There is no denying that Western governments should take responsibility for the backlash against some foreign companies in the Chinese market.
But foreign companies also have the responsibility to exert influence on their governments to maintain good relations with China so as to create favorable business climate for economic and trade exchanges.
Some Western strategists have been overplaying the possibility of decoupling from China in attempt to exclude China from the global economic system. China needs to strengthen homegrown innovation, build a “dual circulation” development pattern, and maintain an open attitude toward foreign cooperation.
China has successfully integrated into the economic globalization system over the past four decades, and some Western countries are now trying to drive China out of the system. Such political maneuvers are counterproductive and would only cause serious damage to their own businesses.
The author is associate dean of the School of International Studies at Renmin University of China. bizopinion@globaltimes.com.cn
Photo: VCG
