Route to recovery

Edward Tse, founder and CEO of Gao Feng Advisory, a management consultancy, thinks the strength of China's economy offers a pathway to global recovery.

"China's role in the world in terms of its contribution to global GDP growth continues to be very significant and is probably going to be even more significant because the rest of the world is lagging so far behind," he said.

"It is important that other countries take note of this, but at the moment I am not sure they are. China is now so important to how we all get out of this."

President Xi Jinping made clear in a letter to global CEOs published on July 16 that the fundamentals of China's long-term economic growth had not changed despite the pandemic.

He said the country remained committed to deepening reform and further opening up its economy to provide a better environment for investment and one in which Chinese and foreign enterprises can thrive.

Five days later, Xi reinforced this message. Speaking to a symposium of Chinese entrepreneurs, he said the government remained committed "to creating a market-orientated, law-based and internationalized business environment".

Koh King Kee, president of the Centre for New Inclusive Asia, a think tank based in the Malaysian capital Kuala Lumpur, said this would make China an attractive place for investment as the world recovers from the pandemic.

"Xi's pro-business statement will undoubtedly provide a big boost to business confidence in China, both to foreign and local enterprises," he said.

Even before the pandemic, there was evidence that foreign companies were finding it easier to do businesses in China.

A new Foreign Investment Law took effect on Jan 1, opening up other sectors for investment and giving foreign companies the same rights as domestic ones by entitling them to "national treatment".

According to the World Bank, in terms of the ease of doing business, China ranked fifth among 190 nations in improvements made since 2015.

In its Doing Business 2020 report, China ranked 31st among countries having the best environment in which to do business, ahead of France (32nd), Israel (35th) and the Netherlands (42nd), and only just behind Japan (29th), Germany (22nd) and Canada (23rd).

Parag Khanna, founder and managing partner of FutureMap, a strategic advisory company, and author of The Future is Asian, said China's openness has been particularly evident in the financial markets.

"It has become clear in recent months that China is keen on capital account liberalization, and Western asset managers have been increasing their exposure to China's debt, equity and bond markets despite American political pressure to disengage," he said.

"The lifting of foreign ownership caps in the banking and insurance sectors and Tesla's growth in China speak to the market opportunities," he said, referring to the US electric car maker and clean energy company.

Andrew Sheng, a former central banker and financial regulator and now distinguished fellow at the Asia Global Institute at the University of Hong Kong, said this openness will be beneficial to China as it emerges from the coronavirus crisis.

"The commitment to deepening reform and further opening-up is welcome and necessary if China and the world economy are to recover strongly," he said, adding that even with this commitment, attracting international investment will remain a challenge.

"One must be realistic that global corporate investment will be weak this year until the pandemic is controlled. Many global corporations are struggling to control the damage to their own balance sheets, so they will have fewer resources to do long-term investments abroad," Sheng said.