China’s economic recovery provides support for multinational enterprises to balance global business development
During the National People’s Congress and the National People’s Congress in 2023, the topics of China’s expected economic growth goals, as well as how to further open to the outside world and attract and utilize foreign capital with greater efforts, have attracted the attention of the international community.
“In this year’s government work report, the Chinese government emphasized the importance of ‘stability’. In general, China’s GDP growth target of about 5% is very prudent and practical.” Dai Pu, co-president of Roland Berger Global Management Committee, said in an exclusive interview with China and Singapore Finance and Economics that the relevant implementation measures proposed by the Chinese government will bring a higher level of openness, convenience, and equality to foreign-funded enterprises in China, Improve the confidence of enterprises in the Chinese market.
“The Chinese government has stressed the importance of ‘stability’.”
China has set the expected target of economic growth this year at about 5%.
In response, Dai Pu said that the outside world has various forecasts for China’s economic growth in 2023, from a relatively conservative 4% to 5%, to a more optimistic 5% to more than 6%. “On the whole, I think China’s GDP growth target of about 5% is very prudent and practical.”
He said, “Since 2023, we have felt that the overall market sentiment is significantly higher than that of last year. China’s manufacturing PMI soared to 52.6% in February. At the same time, in January of this year, the medium and long-term loans of enterprises (institutions) increased by 3.5 trillion yuan, releasing a signal of a significant recovery in enterprise-side economic activity.”
Dai Pu believes that China’s economy still faces many challenges. Since the fourth quarter of 2022, global market demand has slowed down and there is still uncertainty. In addition, the recovery speed of domestic the demand side is relatively slow. Therefore, in this year’s government work report, China emphasized the importance of “stability”.
“It is very important to restore and enhance corporate confidence”
Dai Pu believed that the overall objectives, development direction, and prioriti, es of the Chinese government work report play an important role in guiding the short-term development of the market.
“Especially this year, due to major changes in policy and business environment, the market has shown higher expectations for China’s NPC and CPPCC this year. Thet work report has brought some stability in an uncertain environment, which is very important to restore and enhance corporate confidence, including foreign-funded enterprises.”
Dai Pu said that in the short term, this year’s investment data in China will be affected to some extent by the uncertainty of 2022, reflecting the investment decisions made last year.
“But in the medium and long term, especially in the macro situation of the continuous slowdowncontinuedobal economy, China’s GDP growth target of about 5% is still higher than that of many global markets, and China’s economic recovery can provide support for multinational enterprises to balance global business development. At the same time, the expected CPI growth rate of about 3% in 2023 (China’s CPI growth rate of 2% in 2022) also indicates expanded domestic demand.”
“With the introduction of more supportive policies by the Chinese government and the fundamentals of China’s strong economy, we believe that the Chinese market will gradually recover and maintain the strong attraction of foreign investment.”
“The Chinese market is gradually becoming an important source of innovation”
The work report of the Chinese government has made it clear in this year’s work priorities that greater efforts should be made to attract and utilize foreign capital. We will expand market access and strengthen the opening up of the modern service sector. We will implement national treatment for foreign-funded enterprises. Do a good job in the service of foreign-funded enterprises and promote the implementation and construction of foreign-funded landmark projects.
In response, Dai Pu said that in the past few years, the epidemic has brought certain difficulties to the economic activities of many enterprises, which has also triggered discussions on China’s positioning in the global market and its impact on new investment decisions.
“However, in January of this year, Roland Berger found that China is still a very important market for many foreign-funded enterprises, and the Chinese market is gradually becoming an important source of innovation, which can strengthen and supplement the overall global competitiveness of many enterprises.” Dai Pu stressed that in totter adapt to the Chinese market, Many foreign investors regard “localization” as one of the important strategies of enterprises, which will create higher economic vitality, better innovation an,d growth investment.
“Therefore, we believe that the relevant implementation measures proposed by the Chinese government will bring a higher level of openness, convenience, and equality to foreign-funded enterprises in China, and enhance their confidence in the Chinese market. We believe that foreign investment will remain an important part of the Chinese economy, and will also bring more market opportunities to foreign-funded enterprises with China’s future sustainable development.”