China will abolish all market access restrictions on foreign investment in the manufacturing sector, according to a government work report submitted on March 5 to the national legislature for deliberation.
"China is taking the right steps. So it is giving a positive mindset to investors and people who are manufacturers across the world," said Shahid Hussain, Founder and CEO of UAE-based Green Proposition Consulting Firm.
China eases market access for foreign investment in the manufacturing sector
Hussain pointed out that the ongoing two sessions in China indicate a commitment to attracting foreign investment. Except for easing market access restrictions on foreign investment in manufacturing, China will also implement measures to ensure equal treatment of foreign-funded enterprises.
"The investors want to have a good relationship with China. You cannot ignore China when it comes to manufacturing," said Hussain. He mentioned the unparalleled efficiency of manufacturing in China, making it challenging for enterprises to replicate elsewhere. "That is a brutal truth and nobody can ignore it," he added.
According to the Ministry of Industry and Information Technology (MIIT), China has maintained its position as the world's top manufacturing hub for 14 consecutive years. The country's large manufacturing enterprises, with an annual main business turnover of at least 20 million yuan (about 2.8 million U.S. dollars) each, saw a 5 percent year-on-year increase in their combined value-added output in 2023.
Foreign enterprises to benefit from China's "dual circulation"
In addition, Hussain suggested that foreign enterprises can also capitalize on China's domestic consumption growth as China has adopted "dual circulation" development paradigm, in which domestic and overseas markets reinforce each other, with the domestic market as the mainstay.
"If there is a demand in the domestic market, they will seek foreign goods and seek foreign companies to come and invest in China, which will benefit foreign brands and foreign SMEs," said Hussain. A stronger domestic China will increase economic throughput in terms of goods demanded in other parts of the world besides China, which remains the largest consumer market.
Hussain believes that China's strength lies in its market with high purchasing power. With a population of over 1.4 billion and a middle-income group of more than 400 million, the stable demand from the world's largest consumer base serves as a crucial pillar for the global economy.
Reporter | Hannah, Nina
Video | Wingheng
Script | Nina
Poster | Lulu
Editor | Olivia, Steven, Will, James
