In 2024, with rising protectionism and attempts at “decoupling” in the world economy , what has happened to China’s attractiveness as a favored investment destination?
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| China has appeal as a top investment destination. (Source: Bloomberg) |
As 2024 draws to a close, a recent landmark investment decision by French pharmaceutical giant Sanofi has emerged as a compelling testament to global investors’ consistent confidence in the Chinese market.
In early December 2024, the pharmaceutical company announced plans to invest nearly 1 billion euros (about 1.04 billion USD) to establish a new insulin production facility in Beijing, China.
This will be Sanofi's largest investment in the country of a billion people since entering this market in 1982.
Sanofi is not alone in increasing investment in the world's second-largest economy.
Ideal destination for investors
According to China's Ministry of Commerce, a record 52,379 foreign-invested companies were established in the country between January and November 2024, up 8.9% year-on-year. In November 2024 alone, foreign direct investment into mainland China actually increased by 6% year-on-year.
This influx of investment is a testament to the attractiveness of the world's second-largest economy as a top investment destination.
A key factor that allows China to maintain its appeal to global investment is its industrial system, which is the most comprehensive on a global scale and offers a significant supply chain advantage.
China’s supply chain advantages for foreign investors present a huge growth opportunity. Coupled with its vast consumer market of 1.4 billion people, the country remains a key destination for global investors.
Mr. Michael Hart, President of the American Chamber of Commerce in China, said that there are two reasons why foreign companies will not leave the Chinese market.
First, companies have invested in supply chains and built them together with their suppliers.
Second, they do not have a quick and easy replacement market.
Taking openness to a new level
As China pursues an innovation-led growth model, its position on the global innovation map continues to rise.
The 2024 Global Innovation Index, released by the World Intellectual Property Organization, ranked China 11th among the world's most innovative economies, up one spot from the previous year. This makes the country of one billion people one of the fastest growing countries in the past decade.
To allow foreign investors to better leverage its advantages in supply chains, markets and innovation, China has made strides in further opening up this year.
Throughout 2024, the Chinese government announced a series of major measures designed to foster a more attractive environment for global investors. These ranged from expanding access to key industries to launching pilot programs to facilitate foreign investment.
In addition to traditional growth drivers such as manufacturing, Beijing is expanding its opening-up efforts to the services sector.
As 2025 approaches, China is aiming to take its level of opening up to a new level, building on decades of reform efforts to further open up its markets.
At the Central Economic Work Conference of China (December 11-12), China identified the top goal in 2025 as promoting increased consumption, improving investment efficiency, and comprehensively expanding domestic demand.
Analysts say that the order of economic tasks to be implemented in 2025 is different from last year. Moreover, the language used from “expanding domestic demand” to “comprehensively expanding domestic demand” has highlighted the importance of expanding domestic demand in 2025.
Source: https://baoquocte.vn/trung-quoc-la-diem-den-dau-tu-hang-dau-ly-do-doanh-nghiep-nuoc-ngoai-quyet-khong-tach-roi-298828.html
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