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Why do global business giants flock to China?| Insights

By ZHAN CHEN|Jun 10,2023

Chongqing - The recent visit of Tesla CEO Elon Musk to China has grabbed prominent attention worldwide. Before and after his visit, global business giants have flocked to China, including SK Group, Saudi Arabian Oil Co., ARM Holdings plc., Starbucks Corporation, etc., while some local Chinese governments have organized delegations abroad for investment promotion. 

On June 8, Sanan Optoelectronics, a company engaged in the semiconductors industry, and STMicroelectronics, Europe’s second-largest chip maker by revenue, signed a silicon carbide project cooperation agreement in Southwest China’s Chongqing Municipality.

Yuan Jiajun, secretary of the Communist Party of China Chongqing Municipal Committee, said that this flagship project signed and implemented is strategic, fundamental, and significant to Chongqing’s development.

All of these further prove that China’s huge market, complete industrial ecosystem, and continuously optimized business environment convey a strong signal of commitment to openness and cooperation, attracting the globe.

Immense market dividends for multinational enterprises

According to Deng Jing, deputy director and researcher at the Institute of International Economic and Trade and Logistics, Chongqing Academy of Social Sciences, China boasts a large domestic market, presenting immense dividends for multinational enterprises. 

Deng viewed business leaders from all over the world coming to China to seek two key developments. 

Employees work at the Tesla Gigafactory in Shanghai. (Photo/Xinhua)

First, they desire further improvements in China’s business environment, aiming for a market-oriented, rule-based, and internationalized market system. Second, they hope China can expand market access by loosening sectoral restrictions, thus creating more opportunities for foreign investment.

Experts believe the increasing visits to China reveal the mutual interests of both parties. As the Foreign Ministry Spokesperson Mao Ning stated, China needs the world, and the world needs China.

“China will never close its door to the world. We are ready to work together with all countries that wish to pursue win-win cooperation with us for global prosperity and common progress,” Mao said. 

China to lead automobile exports

Pu Yongjian, a professor at Chongqing University, said Musk’s visit to China mirrors the vast automotive market. 

Pu Yongjian, professor at Chongqing University. (Photo/Chongqing University)

“China has currently become the world’s leading exporter of automobiles and is poised to lead the global economy by automobile exports,” Pu said. He said China’s advantage lies in the new energy vehicles (NEVs). 

Under this context, Chongqing is ready to embrace unprecedented opportunities as China’s largest automobile industry hub. “Chongqing can export the NEVs through the Belt and Road Initiative while bringing in domestic and international NEV firms like Tesla,” said Pu. 

Deng thinks that for Chongqing, the most important thing is to amplify industries' research and development (R&D) abilities, thus promoting the value and industrial chain. 

In addition to automobiles, Chongqing has substantial technological and production in many fields, such as intelligent pharmaceuticals, electronic information, instrumentation, equipment manufacturing, specialty fruits, and cultural tourism. 

China’s skilled engineers attract multinational corporations

China has long already shifted advantages from cheap population labor to engineering, which means multinational corporations are increasingly attracted to China’s vast pool of skilled engineers, with their expansion of presence in the high-tech industry, said Pu.

“They now start to recognize the value of China’s engineers because the high-tech sector thrives on a substantial engineering workforce,” Pu said. 

According to Brand Finance, the world’s leading brand valuation consultancy, the Chinese State Construction Engineering Company significantly grew revenue and profit last year, correlated with continuing urban development and infrastructure construction across China. It operated a vertically integrated brand from development to property management and has built a globally valuable brand based upon that complete brand control.

Regarding Chongqing, Pu considers its abundant skilled technicians, making Chongqing an attractive destination for foreign enterprises. 

Relying on Chongqing’s great logistics channels, including the New International Land-sea Trade Corridor (ILSTC) and China Railway Express, Deng proposed optimizing the supply chain to create a global supply and distribution system that radiates worldwide. 

The rail-sea combined transport train of the ILSTC departed from Chongqing Tuanjie Village Station. (Photo/Visual Chongqing)


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