Foreign-invested firms in country behind 7.39t yuan in H1 two-way trade

"China Opportunity 2.0" is emerging as a new driver of the country's efforts to attract investment from around the world as foreign firms deepen their commitment to the Chinese market and expand long-term capital inflows, said business executives.

China Opportunity 2.0 refers to a new phase of China's development characterized by higher-standard opening-up, technological innovation and high-quality growth.

For foreign enterprises, it spans opportunities ranging from rapid infrastructure development to breakthroughs in artificial intelligence and advanced manufacturing, they said.

Noting that China Opportunity 2.0 is reflected in the country's vast market, rapid industrial upgrades, deep talent pool and innovation ecosystem, Chen Pu, chief Asia officer of Syensqo, said the Belgian chemical manufacturer believes that continuous improvements in China's industrial ecosystem — including stronger supply chains, enhanced manufacturing capabilities and faster development across entire value chains — are creating new business opportunities.

In response, Syensqo has expanded its footprint in China with five manufacturing sites and a major research and innovation center in Shanghai, the group's third-largest worldwide.

Stefan Floeck, ABB's division president of IEC Low Voltage Motors, said China will remain central to the Swedish-Swiss tech company's global motor business as the country's industrial upgrading and green transition continue to drive demand for more energy-efficient equipment.

"To capture these opportunities, we will continue investing in local research and development, manufacturing and supply chains to better serve Chinese customers while reinforcing China as an innovation hub and export base within the company's global network," said Floeck.

ABB's low-voltage motor business has invested more than 150 million yuan ($22.12 million) in recent years to upgrade its Shanghai manufacturing base, including R&D testing laboratories and production lines. Its domestic supply chain also supports exports from China to markets worldwide.

Against this backdrop, foreign-invested businesses in China generated 7.39 trillion yuan in imports and exports in the first half, up 17.1 percent year-on-year, marking the ninth consecutive quarter of growth, said the General Administration of Customs.

Pushing back against the so-called "China Shock 2.0" narrative — which portrays China's development as a disruption to the global economy — Zhao Ping, head of the China Council for the Promotion of International Trade's academy, said foreign firms are expanding their presence in China because the country's integrated industrial ecosystem remains difficult for any other economy to replicate.

China further strengthened its efforts to attract foreign investment in June by unveiling a 15-point action plan featuring measures to expand market access, facilitate investment, strengthen promotion and services, and improve foreign capital management to stabilize and upgrade foreign investment.

The plan prioritizes expanding market access in services, finance and pharmaceuticals, among other sectors, while streamlining processes for cross-border mergers and acquisitions, data flows and domestic reinvestment by foreign firms.

That confidence is also reflected in foreign direct investment data. FDI in China's high-tech sector expanded 19.4 percent year-on-year to 130.14 billion yuan in the first five months. The sector accounted for 39.8 percent of the nation's total FDI, up 9.4 percentage points from the same period last year, said the Ministry of Commerce.

During the 14th Five-Year Plan (2021-25) period, foreign-invested companies in China generated 262.7 trillion yuan in operating revenue and 21.4 trillion yuan in profits, with both indicators recording average annual growth of around 5 percent. They employed more than 30 million people on average each year during this period, the ministry added.