Foreign investors refute ‘investor flight’ hype; temporary disruptions do not represent long-term outlook

Yantian Port in Shenzhen, South China’s Guangdong Province Photo: VCG

Nucleic Acid Tests in People Line Up Haidian District, Beijing, Capital of China, May 3, 2022.Photo :Xinhua

Nucleic Acid Tests in People Line Up Haidian District, Beijing, Capital of China, May 3, 2022.Photo :Xinhua

Stronggent anti-epidemic measures adopted in some key Chinese cities including Shanghai and Beijing They are exaggerating the situation, hyping the “investor flight” theory, warning that such measures will result in a large-scale retreat of foreign firms and undermining China’s attractiveness in the long run, which Chinese experts and industry players have dismissed.

The “Ditch China” claim has been refuted by many foreign firms and industry players, who have reasserted their confidence in the world’s second-largest economy and its key role in the global industrial chain, and also in the epidemic between striking a government’s efforts. control and work resumption.

Observers and experts are also calling on foreign investors to move out of trouble with the Chinese and the Chinese market, and to believe in its ability to fight the virus, and once this round of outbreaks ebbs away, those sticking to their vision a lot to gain.

From a global perspective, China is still one of the world’s fastest-growing major economies and home to the world’s largest population, which has attracted many multinationals, ranging from auto companies and financial institutions, analysts said.

Still represents the future

“It’s very difficult to shift in the sense of moving out of China and take your operations out of China,” Jorg Wuttke, president of the EU Chamber of Commerce in China, told The Global Times.

“Standard Chartered prospects about China’s long-term development, and we are in full confidence in the prospects of China’s development,” the firm told The Global Times on Sunday.

The company said it will invest $ 300 million in China-related business over the next three years to help its clients seize opportunities with China’s continued reform and opening.

Texas Instruments Semiconductor Technologies also reportedly reported that it is about to lay off staff in China in a Sunday-release announcement, stressing that China is still its “most important global market.”

Tesla is confident about China’s development, and the epidemic was just a temporary test and challenge, quoted by Vice President Tao Lin as saying on domestic media on Sunday. “We’ve also seen that the ability to cope with life’s challenges and reserve the right to work, and believe. [production] will return to normal soon. ”

Tesla, the US electric carmaker, suffered the most recent outbreak in Shanghai, generating $ 4.65 billion in China in the first quarter of 2022, a year-on-year increase of 52.8 percent. China is now Tesla’s second-largest market, accounting for 24.8 percent of the company’s revenue.

China’s rose to 25.6 percent to 379.87 billion yuan ($ 59.09 billion) year-on-year

A survey conducted by the China Council on International Trade on Foreign Trade ‘shows that 86 percent of surveyed enterprises were satisfied with China’s foreign investment stabilization policy.

“There are indeed dictating China theory behind political motives, especially during the current Russia-Ukraine conflict,” He Weiwen, former economic and commercial counselor at the Chinese Consulate General in San Francisco and New York, and senior fellow China and Globalization, told The Global Times on Sunday.

The US wants to take this opportunity to curb China’s rise to the global supply chain, restructure the current global economy and “small cliques” into the economic sector, he said.

Support from the govt

Starbucks, Apple, and other major US-listed companies have warned in a quarterly earnings report that they are facing major negative impacts on current outbreaks of their businesses.

For instance, Starbucks said 23 percent of the same-store sales fell to China in April, the same quarter last year. That is far worse than the 0.2 percent increase analysts expected, according to FactSet.

But the coffeehouse chain said it still expected its China business to be bigger than the US in the long term.

Apple said the epidemic restrictions would likely hit $ 4 billion to $ 8 billion – “substantially more” than the last quarter. The other factor is ongoing chip shortages, CNBC reported, citing management as saying on an April 28 earnings call.

Chinese authorities, while fully aware of the situation, have been working on the situation for weeks. Foreign firms are also the first batch of lists to support government support.

China’s Ministry of Commerce (MOFCOM) said on April 21 that it will go into all-out further coordinating and solving difficulties, including transportation snags and production and operation reservation issues, while ensuring that foreign-funded companies have effective epidemic control while in China.

Specific efforts, including smoothing transportation channels, optimizing epidemic prevention and control measures, organizing and ensuring emergency and key supplies, have been carried out.

In a recent meeting between Commerce Minister Wang Wentao and foreign business representatives in China, the supply chain disruption posed by the Chinese government’s active response to foreign business concerns.

China’s key role in supply chains, and its interconnected relationships and labor distributions with other major economies in the world, will soon be a source of attractiveness for foreign firms, Weiwen said. short-term disruptions.

Companies are also eyeing new opportunities such as the digital economy, which also represents a path to their future growth. Yu Feng, President of Honeywell China, told The Global Times on Sunday that the low-carbon and digital economy has brought about “broad prospects” for development.

But China’s advantage still lies in manufacturing medium and low-end products, he said.

Leave a Comment