China’s reform commitment presents fresh opportunities to foreign firms

Published: July 27,2024

Just days after the third plenary session of the 20th Communist Party of China (CPC) Central Committee, a delegation from the U.S.-China Business Council (USCBC) visited China.

The visit came as China stands at a critical juncture of comprehensively deepening reform and advancing Chinese modernization. The message from China to the U.S. guests is clear: despite external pressures and internal challenges, China remains committed to deepening its reforms and opening its doors wider to foreign companies. Despite the bad-mouthing of some U.S. politicians and their allies in the media about an “economic collapse,” China’s economic momentum is steadily solidifying. Recently, several international organizations, including the International Monetary Fund and the World Bank, have concurrently raised their forecasts for China’s economic growth. Domestic economic data corroborates this optimism. In the first half of the year, China’s economy grew by 5 percent year-on-year, showcasing a stable economic foundation. The quality of economic development is also improving, with investments in both high-tech manufacturing and high-tech services experiencing double-digit growth. On a global scale, China is also among the fastest growing economies.

The key CPC session has emphasized leveraging China’s vast market advantages to enhance its openness through expanded international cooperation. This signifies that China aims to enhance the investment and operational opportunities of global enterprises by delivering a more optimized business environment and high-standard opening-up. The U.S. business community stands to gain significantly from China’s commitment to reform and opening-up. A new survey by the American Chamber of Commerce in China has shown that around 50 percent of the surveyed companies have identified China as a top three investment target, signifying a strategic shift in their investment priorities. This was a 5-percentage-point improvement from the previous year’s survey. In fact, it is not just U.S. companies that are eyeing the Chinese market. With China’s continued stable economic growth as well as deepening reform and opening-up, more multinational corporations are turning their attention to China.

In the first half of this year, China established 26,870 new foreign-invested enterprises, a year-on-year increase of 14.2 percent, official data showed. The visit of the USCBC delegation also highlights a critical reality: despite the clamor among some U.S. politicians for a “decoupling” from China, the U.S. business community remains resolutely focused on fostering ties with the world’s second-largest economy. In their meeting with Chinese Foreign Minister Wang Yi, the U.S. delegation said the U.S. business community is confident in continuing to deepen its cooperation with China and looks forward to further deepening bilateral cooperation in fields such as economy, trade, investment, green development, health, education and people-to-people exchanges. The past 45 years since the establishment of bilateral ties have demonstrated the mutually beneficial nature of China-U.S. cooperation. The notion of “decoupling from China” is neither feasible nor desirable for the business community.

Consider the pledge made by U.S. politicians to bring back manufacturing and jobs. The tariffs imposed by the White House on foreign metals, washing machines, and a range of goods from China starting in 2018 have neither increased nor decreased the overall number of jobs in the affected industries, said a recent working paper by researchers from the Massachusetts Institute of Technology, the University of Zurich, Harvard University, and the World Bank. Despite Washington’s political rhetoric, a rupture in the China-U.S. economic relationship would result in mutual losses, disrupt global supply chains, and stall economic recovery at a time when the world can least afford it. Therefore, the world’s two largest economies share a responsibility to manage their differences responsibly, and ensure that economic competition stays healthy. At stake is not just bilateral trade, but global economic stability and peace.

During their stay in Beijing, members of the USCBC delegation said that the plenum is expected to stimulate a new round of economic reform, further opening up in China, and attract more sustainable foreign investment. It is hoped that as the American business executives return home, they will not only bring back insights into China’s future economic policies but also contribute to the mutually-beneficial economic and trade cooperation between the two countries. 

Xinhua