Qingdao summit sees MNCs backing China's efforts to boost supply chains

China's eastern province of Shandong sealed foreign investment deals worth $15.6 billion for 99 projects in various cities on Monday.

Global companies from 16 countries and regions, including Japan's Mitsui & Co Ltd and Germany's ZF Friedrichshafen AG, are among the big-name signatories.

The agreements were signed during the third Qingdao Multinationals Summit, a two-day event that opened on Monday in Qingdao, a coastal city of the province.

Government officials and corporate executives said these deals signify that China will continue to play a key role in supporting the stable operation of global supply chains, and facilitate multinationals to achieve better growth in its lucrative market.

The big-ticket projects are mainly in the fields of high-end equipment and chemicals, new energy, new materials, information technology, finance, ocean development, agriculture and services.

Fourteen projects have a contracted foreign capital exceeding $100 million each. And 61 projects' contracted foreign capital exceeds $30 million each, said the summit's organizers, the Ministry of Commerce and Shandong's provincial government.

The government will support MNCs, an important driving force behind the dual-circulation development paradigm, to give full play to their unique advantages and roles to contribute to China's high-quality development, said Sheng Qiuping, vice-commerce minister.

With global transnational investment in manufacturing shrinking, China, with its huge market and complete supply chain, has attracted MNC investments in manufacturing and made significant contributions to global economic growth in recent years, said a business report released by the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce, during the summit.

The report stated that multiple factors like the rise of trade protectionism, the COVID-19 pandemic and the Russia-Ukraine conflict have reshaped the global supply chain, leading to a new round of its restructuring.

The scale of foreign investment in China's manufacturing sector has increased steadily, and MNCs' business performance also continued to improve in China, boosting their confidence to sustain or increase their investment in the country, said Gu Xueming, president of the CAITEC.

With China underlining digitalization, green transformation and industrial upgrade, the manufacturing projects invested by MNCs in the country have tended to be large-scale in recent years, covering the whole industrial chain.

The CAITEC report also found that MNCs' investment in China's manufacturing sector has expanded from medium and low-level processors to the high end.

Foreign direct investment in China expanded 17.3 percent year-on-year to 564.2 billion yuan ($84.18 billion) in the first five months of 2022, while the nation saw growth rates of high-tech industries, high-tech manufacturing and high-tech services surge 42.7 percent, 32.9 percent and 45.4 percent, respectively, according to the latest data released by the Ministry of Commerce.

The steady performance of China's economy has further strengthened the confidence of the international community in the nation's economic growth prospects. China welcomes companies from all over the world to invest in its market and share the development dividends, Foreign Ministry spokesman Wang Wenbin told reporters at a news conference on Monday.

China has the potential to become a hotbed for research and development activities, especially for large MNCs. There is also enormous untapped potential in both trade in services and decarbonization in the country, according to Business Confidence Survey 2022, released by the European Union Chamber of Commerce in China on Monday.

With a market of 1.4 billion consumers, some of the world's best manufacturing clusters and, in more recent years, a vibrant innovation ecosystem, China presents a growth story that European companies wish to be part of, the EU survey found.

Pascal Soriot, CEO of AstraZeneca, a British-Swedish biopharmaceuticals producer, said: "The COVID-19 pandemic has tested economies and societies to their limits around the world. Now more than ever before, we must work together, across industries and borders, with urgency and one shared goal, to create a healthier, stronger and more sustainable future for all."

AstraZeneca announced on Monday that it is planning to build a manufacturing and supply base, and regional headquarters, in Qingdao in the coming years.

Tao Lin, vice-president of Tesla Inc, a US electric vehicle manufacturer, said China's policies of stabilizing foreign investment and trade have generated great confidence among MNCs for future growth in the country.