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Global Firms Confident in China's Growth

By China Daily|May 15,2023

This aerial photo taken on Jan. 13, 2023 shows a view of the container terminal of Haikou Port in Haikou, south China's Hainan Province. (Photo/Pu Xiaoxu, Xinhua)

Multinational corporations have voiced optimism and confidence in China's long-term potential for economic growth, despite mounting external uncertainties such as the potential risks of decoupling and supply chains disruptions.

They also are beefing up efforts to expand their presence in the world's second-largest economy through further investment and localized operations.

Economists and industry insiders said any intention of decoupling from China is clearly infeasible and against the historical currents, and attempts to do so would hamper the recovery of the world economy, which is suffering from high inflation and downside risks.

They also highlighted China's economic resilience and pivotal position in global industrial and supply chains.

Their comments came as Bloomberg quoted anonymous sources as saying that United States President Joe Biden aims to sign an executive order limiting investment by US businesses in key parts of China's economy, around the time of the summit of the Group of Seven advanced economies, which is scheduled to start on Friday in Japan.

Hideki Ozawa, president and CEO of Canon China, said: "The anti-globalization trend has not affected the development of Canon's business in China or the relationship between Canon and our Chinese partners. On the contrary, China's opening-up remains a significant source of new opportunities for Canon."

Ozawa said that with the upgrading of China's industries and consumption, domestic demand for overseas high-end manufacturing and high-tech services is growing rapidly, and Canon will seize the opportunity and continue to extend and deepen cooperation with its Chinese partners.

"The Chinese economy is very resilient, and China is the most important market for Canon. Canon is confident in the Chinese market. … We will establish a more comprehensive supply chain from research and development to production and sales in China, and invest more here," he added.

Frank Meng, chairman of Qualcomm China, said the company has always been optimistic about the long-term development of the Chinese economy and will continue to increase investment and expand cooperation in China.

"The number of Qualcomm's employees in China has grown by double digits almost every year since 2018," Meng said.

In addition, Qualcomm has established joint innovation centers with partners, which is an important part of the company's continuous development in China, he said.

Data from the Ministry of Commerce showed that foreign direct investment in the Chinese mainland, in terms of actual use, expanded 4.9 percent year-on-year to 408.45 billion yuan ($58.8 billion) in the first quarter of this year. Specifically, FDI in high-tech manufacturing increased 18 percent from the same period a year ago.

Samson Khaou, executive vice-president of Dassault Systemes Asia-Pacific, said the French industrial software company is highly confident about China's economic growth this year and will continue to invest more in the Chinese market, believing that China's growth will come from both domestic and global demand.

Charlie Munger, a US billionaire investor and vice-chairman of Berkshire Hathaway, said: "One thing we should do is to get along with China, and we should have a lot of free trade with China. It's in our mutual interest. … Everything that increases the tension between the two … is stupid, stupid and stupid."

The International Monetary Fund has projected that China's economy will likely expand by 5.2 percent this year, and the country is going to contribute about one-third of global growth this year, which will provide more growth opportunities for other countries.

"Technological decoupling would impose significant costs on Asian economies — about 5 percent loss in GDP. That's quite a big number. … In general, technological decoupling is very expensive for not just Asia, but for the rest of the world," said Krishna Srinivasan, director of the IMF's Asia and Pacific department.

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said Washington's increasingly tightened restrictions will wreak havoc on international economic and trade cooperation, jeopardize global industrial and supply chain safety, and harm the interests of multinational companies around the world.

Li Xianjun, an associate researcher at the Chinese Academy of Social Sciences' Institute of Industrial Economics, said, "Such attempts aimed at containing the rise of China's high-tech sector will motivate Chinese enterprises to double down on independent innovation and achieve breakthroughs in key technologies."

For example, China Electronics Corp, the country's largest State-owned comprehensive electronic information enterprise group, has launched China's first open-source desktop operating system platform, openKylin, which marked a breakthrough in bolstering the development of homegrown software operating systems.

Economist Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, said a lot of the tension between the US and China arises from the US side.

"This is the US' mistake, because some Americans think that if China is rising, the US must be losing," Sachs said. "But this is false. Economics is a win-win cooperative game."

Zhou Lanxu contributed to this story.


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