Foreign companies are not hiding their continuing interest in the Chinese market, as they remain “very bullish” on Chinese opportunities, with some planning more investment, in sharp contrast to the so-called claims of “foreign capital leaving China.”
The latest example is Ralph Lauren CEO Patrice Louvet, who said in an interview with Bloomberg television on Thursday that the company is very bullish on long-term opportunities within China.
“We’ve got nice momentum, but when you look at our luxury peers, the penetration of the China business is much higher than that, so I think we have significant runway,” Louvet said.
Louvet is aiming to leverage China’s vast consumer market, which has been on display globally as the country continues to grow.
Data from the National Bureau of Statistics revealed that Chinese retail sales of consumer goods, a major indicator of the country’s consumption strength, climbed 4.7 percent year on year in the first quarter of 2024, a clear sign that consumption has become an important driving force for economic growth.
In addition to luxury brands, Shanghai Disney Resort is set to expand with a new attraction backed by an investment of 2.459 billion yuan ($338.15 million), according to bidding information on the website of the Shanghai construction engineering trading platform on Thursday.
The new project will include six amusement facilities on an area of 21,306 square meters. In March this year, Shanghai Disney Resort announced it had begun preparations to open a new attraction next to its Zootopia-themed land.
“China’s huge market size cannot be ignored by foreign companies,” 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.
China has a very large market with a population of more than 1.4 billion and a middle-class of more than 400 million people. The journey toward modernization will create huge market opportunities, Chinese experts said.
As of December 20, 2023, Shanghai Disneyland had welcomed over 13 million visitors in less than a year, setting another record for attendance since its grand opening in 2016, the company said.
In addition, foreign companies are still eyeing China as an important research and development (R&D) base. On Monday, ZEISS opened its new R&D and manufacturing site in Suzhou Industrial Park in Suzhou, East China’s Jiangsu Province.
Covering an area of over 13,000 square meters, the new site marks the group’s first land purchase for its self-built project in China.
It aims to become a key R&D and manufacturing center in the country for industrial quality solutions, research microscopes, surgical microscopes, and ophthalmic equipment, the company said.
Chen said the Chinese market is aided by lower operating costs, enhanced local R&D capabilities, and industrial cluster effects, and could see more foreign companies placing core functions from design and R&D, investment and production to operation and sales in China.
Data from the Ministry of Commerce (MOFCOM) showed that foreign direct investment (FDI) into China from January to May 2024 reached 412.51 billion yuan, with the number of newly established foreign-backed companies reaching 21,764, up 17.4 percent year-on-year.
FDI in the manufacturing sector stood at 117.11 billion yuan, accounting for 28.4 percent of the national total, 2.8 percentage points higher than last year’s level, said MOFCOM.
China has continuously stepped up its efforts to attract foreign investment with concrete measures. China’s State Council, the country’s cabinet, announced on Thursday further opening-up measures in six trial cities across various fields, including tourism, culture and telecoms.
These continued moves demonstrate China’s commitment to increasing its pace of opening-up and will further boost foreign investment sentiment in the country, experts said.
Global Times
