MNCs seek fresh growth points in China

A view of the booth of Schneider Electric SE during an expo in Shanghai. PHOTO/CHINA DAILY

In China, Covestro AG, a German chemicals manufacturer, is setting up a new plant in Zhuhai, Guangdong province; Schneider Electric SE, a French industrial conglomerate, will build an industrial park in Xiamen, Fujian province; and Bridgestone Corp, a Japanese tire company, has announced it will invest 562 million yuan ($77.6 million) in China over the next three years.

These seemingly unconnected corporate developments have one thing in common: they represent a trend of multinational corporations seeking fresh growth points in China’s green transformation and rapid development of its high-end manufacturing sector.

Against the backdrop of global economic uncertainties, the idea of ensuring secure and sustainable investments has gained traction worldwide. MNCs, particularly those dealing in high-end materials, industrial parts and components, and green-related industries, are prioritizing long-term returns.

To this end, they are establishing more innovation centers and advanced factories in China to sustain competitiveness while navigating future challenges.

For example, Marelli Holdings Co Ltd, an Italian-Japanese mobility product supplier to the automotive industry, will expand its engineering team in China from 800 to 1,000 soon to meet surging demand for innovation.

David Slump, the group’s president and CEO, said Marelli will ride China’s electric vehicle wave by supplying products ranging from automotive lighting and electronics to software solutions to its partners in the country.

Dismissing some Western nations’ “China overcapacity” narrative, especially in the areas of new energy industries, Slump said that China, recognized globally as a major EV market and home to some of the world’s leading EV manufacturers, will create substantial opportunities for global companies aiming to sustain robust growth in this burgeoning sector.

Eager to cut carbon emissions, many countries are building infrastructure like charging facilities, battery swap stations and capable grid systems to facilitate their consumers driving EVs on the road, he said.

With around 50,000 employees and 170 plants and research and development centers across the world, Marelli also ships products manufactured at its plants in China to other parts of the world, including Mexico, Thailand and Germany.

Markus Steilemann, CEO of Covestro, said he opposes the “China has overcapacity” narrative and is not a fan of excessive regulations, especially in markets where free trade is essential.

Excessively prohibitive measures and restrictions may not effectively boost productivity, and criticizing perceived overcapacity is not the right way to global cooperation, said Steilemann, adding that about 75 percent of Covestro’s planned investment in the Asia-Pacific region will be in China over the next three years.

China’s insurance market to double in 10 years, Swiss Re CEO says

The size of China’s insurance industry is expected to double in the next 10 years amid strong economic growth, making the country an even more important market for the group, said Christian Mumenthaler, group CEO of Swiss Re.

China’s economy continued its steady recovery in April, official data released on Friday showed.

The country is expected to maintain an annual economic growth rate of about 5 percent, continuing to rank among the world’s fastest-growing economies, Mumenthaler said in an exclusive interview with China Daily.

China’s insurance market is growing faster than its economy, Mumenthaler added.

“The size of premiums could double in 10 years, so we want to be part of that. I’m very excited about the market opportunities in China,” he said.

Consultancy expert: China’s economy to have steady recovery

China’s economy showed signs of stabilization at the beginning of the year, laying the foundation for a steady recovery throughout the year, said Ben Simpfendorfer, a partner at consultancy Oliver Wyman.

“I think the economy is stabilizing,” Simpfendorfer said in an exclusive interview with China Daily. “The foundations are there for recovery.” While China’s growth target of around 5 percent for this year seems challenging, Simpfendorfer said he believes the goal is “still achievable if the real estate sector begins to stabilize”.

Dismissing the speculation that China’s economy is showing signs of peaking, he said the “long-term growth prospects still look very good”.

“China hasn’t peaked. It’s evolving,” he added. “The country will remain a global manufacturing hub and a global innovation hub. China matters for the global business and the global economy. There isn’t another China out there at this point.”

German firms grow with China

As China’s economy continues to develop and more favorable policies are introduced, many German enterprises are keenly interested in its market advantages and improving business environment. They vow to invest more in China and grow together with the country.

According to the business confidence survey for 2023 and 2024 by the German Chamber of Commerce in China, about 78 percent of German companies expect growth to be consistent in China in the next five years, while 54 percent plan to increase investments in the country.

The Beijing China-Germany Industrial Park, the first national-level park that focuses on Sino-German economic and technological cooperation, has more than 100 German companies, including Fortune 500 firms as well as hidden champion companies.

Join us together with our British host Alexander Long as we explore the industrial park.

Chinese Commerce Minister calls for Netherlands to maintain regular lithography machine trade for healthy development of bilateral trade ties

A chip manufacture machine Photo: VCG

A chip manufacture machine Photo: VCG

The Chinese side considers the Netherlands a reliable trade partner and hopes the Netherlands can uphold the spirit of contract to support companies fulfill contract obligations to ensure the regular trade of lithography machines, Chinese Commerce Minister Wang Wentao said while meeting visiting Dutch Trade Minister Geoffrey van Leeuwen in Beijing on Wednesday.

The Chinese side commends the Netherlands for being committed to free trade, Wang said, calling for the two sides to jointly safeguard stability of global semiconductor industrial and supply chains to prevent the abuse of security concept and boost the healthy development of bilateral economic and trade ties, according to a press statement on the website of the Ministry of Commerce.

Van Leeuwen said trade is a major contributor to the economy of the Netherlands, and the country is committed to free trade and attaches great importance to China-Dutch economic and trade cooperation.

China is one of the most important trade partners of the Netherlands and the country is willing to continue to be a reliable partner for China, van Leeuwen said.

The Dutch official said that its export control measures do not target any country. The Dutch government made the decision on the basis of independent evaluations and seeks to reduce impact on the global semiconductor industrial and supply chains at its most, with the prerequisite of safety.

Van Leeuwen said he expects that the two countries will further cooperate in fields including green transition and care services.

The Dutch government in 2023 introduced a licensing requirement for ASML’s shipments of its most advanced deep ultraviolet lithography machines.

On January 2, ASML said that the Dutch government had partially revoked an export license for the shipment of some chipmaking equipment to China, according to a press release sent to the Global Times.

Exports of NXT:2050i and NXT:2100i lithography systems in 2023 were affected, the company said.

Global Times