Global investors bullish on long-term opportunities in China (2)

SAFE HAVEN FOR INVESTMENT

Niren Anand, from the city of Darbhanga, in Bihar, India, established his own company Xiamen Ever Trade Import and Export Co., Ltd. in China in 2011. Three years later, he started his factory in the city of Jinjiang, Fujian Province, designing and manufacturing products for big names such as Lotto and Fila, raking in over 10 million U.S. dollars in 2020.

Ever Trade is one of the 10 Indian businesses seeking opportunities at this year's CIFIT. Atul Dalakoti, executive director of the Federation of Indian Chambers of Commerce and Industry in China, said many foreign companies and organizations attended the fair despite COVID-19, which shows that China holds strong appeal to investors from the whole world.

China has become a "safe haven" for global capital in a year of turmoil caused by the pandemic, as foreign investors continued to seek long-term and stable opportunities in the country.

The COVID-19 crisis caused a dramatic fall in foreign direct investment (FDI) in 2020, which dropped by 35 percent to 1 trillion U.S. dollars, according to the World Investment Report 2021 published by the United Nations Conference on Trade and Development.

However, FDI growth in China continued in 2020, increasing by 6 percent to 149 billion U.S. dollars, reflecting, to a degree, success in containing the pandemic and the rapid recovery, said the report.

An exhibitor (1st L) explains to visitors at a cosmetics booth during the 21st China International Fair for Investment and Trade (CIFIT) in Xiamen, southeast China's Fujian Province, Sept. 8, 2021. (Xinhua/Wei Peiquan)

According to a report released earlier this year by the American Chamber of Commerce in South China, most of the companies surveyed reported positive overall returns on investment (ROI) in China, which were higher than their global ROI.

A majority of companies remain optimistic about the business outlook in China, a remarkable increase compared to data from 2016 to 2019. In particular, American companies see a brighter prospect for China's market growth, the survey found.

Matthew Margulies, vice president of China Operations of the U.S.-China Business Council, told Xinhua during the fair that American businesses have a very long-term view in China and are not looking at short-term bilateral tensions and challenges.

Margulies said 94 percent of their members, or the majority of American companies in China, are here to access the local market, and they are not using China as an export platform back to the U.S.

"Companies are still optimistic about the opportunities that exist here," he said.

"There are talks about pulling out of China," Zhou Liang, Partner of Government and Public Service, EY China, told Xinhua, adding that the survey conducted by the consulting firm on about 120 multinationals that operate in China suggested otherwise.

"I've also seen similar surveys published by U.S. and Japanese Chambers of Commerce, and they have all led to more or less similar conclusions," Zhou said. "Despite geopolitical tensions, entrepreneurs vote with their feet, meaning most tend to stay put or even boost their presence in China."

On the one hand, economic regionalization calls forth businesses to reach as close as possible to the market; on the other, multinationals value the talent pool, the integral industrial structure of the Chinese market, among its other appeals, Zhou explained.