Global companies show confidence in country's economic engine

China will maintain its charm as a favorite investment destination for companies from the United Kingdom, thanks to its strategic importance and continuous drive for opening-up, said British business executives.

Given that the country is further expanding market access and pursuing high-quality growth, it will bring more exciting business opportunities to British multinationals, said Guy Dru Drury, chief representative for China, Northeast and Southeast Asia at the Confederation of British Industry.

China's strong consumer base and improvements in its business environment have underpinned confederation member companies' long-term optimism in the Chinese market, he said.

Particularly, the country's progress in strengthening intellectual property protection has been very "encouraging" for small and medium-sized member companies, Drury said, as these efforts have lifted the efficiency of patent registrations and cracked down on IP infringements.

"China's second- and third-tier cities are expected to provide more talent and opportunities for foreign enterprises in the next stage," he said, noting as China's local governments are encouraging employment and advancing technological development, providing favorable policies and highly educated and localized labor resources, foreign companies can certainly boost their growth by fully making use of those resources.

Given China's unwavering efforts to expand high-level opening-up, pursue high-quality development and create a better business environment for global companies, foreign direct investment in the country surged 37.9 percent year-on-year to hit 243.7 billion yuan ($38.33 billion) during the first two months of the year, data from China's Ministry of Commerce showed.

The ministry said actual use of foreign investment in the service sector during the January-February period totaled 175.7 billion yuan, up 24 percent year-on-year. Investment in high-tech industries grew 73.8 percent year-on-year. Investments in high-tech manufacturing and high-tech service grew 69.2 percent and 74.9 percent, respectively.

In response to the Chinese government's call for a higher level of cooperation and innovation for coordinated regional development, British pharma giant AstraZeneca established five regional headquarters in Chinese cities including Beijing, Guangzhou in Guangdong province and Wuxi in Jiangsu province last year, aiming to promote the healthcare industry chain's localized integration and boost the innovative capacity of the regional medical industry.

The group also unveiled its upgraded global R&D center in China, international life science innovation campus and medical healthcare artificial intelligence innovation center in Shanghai in 2021, the latest milestone in its expanding footprint in the country.

"We have seen China's favorable attitude toward homegrown innovation, and we plan to fully leverage opportunities where domestic and overseas counterparts come together," said Leon Wang, executive vice-president of international business at Astra-Zeneca.

Due to its rapid economic growth, China's Guangdong-Hong Kong-Macao Greater Bay Area is becoming an internationally competitive city cluster. Atkins, a British design, engineering and project-management consultancy, plans to participate in more infrastructure and industrial projects in this area during the country's 14th Five-Year Plan period (2021-25).

"Our growth in China will follow the country's urbanization and industrial stimulus measures to remain competitive, and its project designs in the Bay Area will be the company's new sample cases during the five-year plan period," said Philip Hoare, president of Atkins.

Supported by 20,000 employees in 25 countries and regions globally, the company runs a number of offices in China's Bay Area, Yangtze River Delta region, Beijing-Tianjin-Hebei area and Chengdu, Sichuan province. Hoare said they will remain the company's priority markets in the country in the coming years.

With many British business leaders stressing that an "icebreaking" spirit is needed for the business community in the UK to reinforce further cooperation between China and the UK, Hoare said there is no doubt that good relations between the two countries promote business relationships. In this regard, companies from both sides benefit from healthy and stable ties between their governments.

At the beginning of the 1950s, when Western countries imposed embargoes on trade with China, visionary British businesspeople led by Jack Perry overcame many obstacles to make an icebreaking trip to China. They not only "broke the ice" to trade with China, but also left people today with rich heritage of China-UK friendship and exchanges.

As the COVID-19 pandemic has generated a huge impact on the global economy and has led to a deeper understanding of the importance of sustainable development, Hoare said that green innovation will be further stimulated as more companies invest more in sustainable operating technologies, facilities and services.

Peter Kung, former vice-chairman of KPMG China, said China's Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, introduced in 2019, has already injected new impetus into technology companies in the region, generating more business opportunities for emerging industries and innovative businesses.

More than half of British businesses are optimistic about their prospects in the Chinese market in 2022, rising three percentage points year-on-year to 52 percent, reversing a three-year decline, according to a survey released by Beijing-based British Chamber of Commerce in China in December last year.

Improving sentiments among British companies over the Chinese market highlighted continued economic recovery in the Chinese economy despite the lingering COVID-19 pandemic and other challenges.

The study, based on the results collected from 288 member companies of the chamber between Oct 12 and Nov 5, found that 52 percent of the surveyed companies are optimistic about their prospects in China this year.

Also, 46 percent of the companies are planning to increase investment in the country, according to the survey. Businesses in financial services, healthcare, retail and consumer goods are more confident.

Such confidence stems from improved earnings in the Chinese market over the past year. For as many as half of the companies surveyed, revenues have recovered to either equal or exceed pre-epidemic levels, with 70 percent of the companies expecting their revenues from China in 2021 to equal or exceed those of 2020.