Foreign investment continues to favor China
A terminal at Qingdao Port. Photo: FILE
The United States Food and Drug Administration recently announced its accelerated approval of an anti-cancer therapy independently made by Beigene Ltd., a Chinese biomedicine company. It is the first time a new cancer therapy from a Chinese mainland drug developer enters the American market, while most cancer-focused drugs in China are imported.
Beyond this breakthrough news about the Chinese pharmaceutical industry, the story of John V. Oyler, Beigene’s co-founder and CEO, is worth mentioning. Oyler was the first entrepreneur born in the US to set up a company in China and has earned a fortune of at least $1 billion, according to Forbes. In 2010, Chinese American scientist Wang Xiaodong invited Oyler to start a business in the San Francisco Bay Area. Oyler, however, convinced Wang that opportunities in China were more promising.
“There are plenty of reasons to be confident about China,” Oyler said. With a population of nearly 1.4 billion, China has the largest middle-income group in the world and its market size and market potential are huge. Higher-quality openness to the outside world will push the world to work on a greater openness together, allowing more commodities and factors to flow freely and promote economic and trade cooperation across the world. China has used greater openness to deepen reforms and has cemented inclusiveness, allowing global investors and sector elites to see opportunities in the country.
“At present, China commands the conditions for establishing large global pharmaceutical companies for its considerable market size and increasingly mature market environment.” This is the attraction of China in the eyes of Oyler. “In China, we will have the possibility of building a prominent pharmaceutical company with global influence.”
“China will embrace greater openness as it continues to develop. A strong sector is emerging in the country,” Oyler said. Moreover, the Chinese government has introduced a series of policies in the hope of encouraging the development of innovative therapies.
During the recent 2nd China International Import Expo, AstraZeneca, a multinational pharmaeutical company, announced that it would upgrade its Shanghai Research and Development (R&D) platform into a global R&D center and set up an AI innovation center in Jing’an District, Shanghai. “For the healthcare industry, China’s encouragement for openness and innovation will make more visions into realities,” said Pascal Soriot, AstraZeneca’s global CEO. Emerging technologies, such as the internet of things, big data and AI, are booming in China, offering golden opportunities for the healthcare industry.
The expo was a major Chinese initiative to open its market to the world. It sent a signal of expanding openness and provided the world with a platform for multi-win cooperation among countries. Participating countries displayed products and promoted the local investment environment. Local governments organized the procurement of products and technologies while holding many investment promotion activities at the expo. Participating foreign companies considered the expo as a platform to understand the Chinese market in depth and seek investment opportunities. These measures have produced a significant spillover effect on attracting foreign capital.
The import expo was a big stage for China to create opportunities shared by the world. China advocates openness and cooperation and brings confidence and hope to a world facing protectionism and unilateralism. The successful two sessions of the China International Import Expo have made China’s market more attractive and created new growth poles, opportunities and development.
Xu Chen, president and CEO of Bank of China USA and chairman of China General Chamber of Commerce USA, held that the profits earned from the Chinese market have become an important source supporting American high-tech companies’ enormous investment in R&D. Many American companies have made considerable gains there in the fields of service and trade. There is still much room for future development given China’s ongoing transformation, upgrading and deepening reform.
In the eastern coastal areas of China, some export-oriented and low-value-added foreign-invested enterprises have moved out production links. How can we monitor this phenomenon? How do we measure China’s current investment environment? How do we predict China’s future investment prospects?
“China remains the top priority of US companies’ recent investment plans in the world,” according to the “2019 China Business Environment Survey Report” by the American Chamber of Commerce in China. The report mentioned that China’s positive domestic consumer market outlook and gradually improved business environment make it continue to be the preferred destination for global investment. The steady growth prospects of major industries and the growing and increasingly affluent middle-income group have preserved the confidence of US companies in China about the country’s development and business opportunities. Meanwhile, American Chamber of Commerce members remain optimistic about the further improvement of China’s investment environment. The report shows that 69% of member companies achieved profitability in 2018, the profitability of 21% of the member companies remained the same level as the previous year, and more than 60% of the member companies still see China as the first choice or top three destinations for investment.
“Utilization of foreign capital this year has kept a steady and progressive momentum, and it is expected that the foreign capital flowing to the Chinese mainland will continue to be stable throughout the year,” said Zong Changqing, director-general of the Department of Foreign Investment Administration under the Ministry of Commerce, noting that China has not experienced a massive wave of foreign capital withdrawals.
“The characteristics of foreign capital utilization this year are stable, abundant and excellent. Such achievements are extremely valuable in the context of the sluggish global growth,” said Ye Wei, deputy director-general of the Department of Foreign Investment Administration under the Ministry of Commerce. Currently, China faces many challenges in terms of foreign capital utilization, including the bleak outlook of the global economy, fundamental changes in the global investment pattern and the need to further optimize the domestic business environment. The country’s Foreign Investment Law will take effect at the beginning of 2020. China is accelerating the optimization of the institutional system concerning foreign investment promotion, protection and regulation. Thus, an improved and better system of an open economy will be available.
This article was translated from Guangming Daily.
edited by MA YUHONG