Multinational Firms Optimistic on the Economic Outlook of the Chinese Market and Investment Prospects

Multinational Firms Optimistic on the Economic Outlook of the Chinese Market and Investment ProspectsEven with the cooling down of the Chinese economy, enthusiasm from the top 500 firms in the world setting up new businesses in China show no signs of abating. Multinationals optimism in the economic outlook of China assisted in the country to attract 781 billion yuan in non financial foreign direct investment in 2015 even with the economic slowdown was up 6.4 percent from 2014.

The director –general of the Ministry of Commerce department of foreign investment administration Tang Wenhong stated that the top 500 companies are optimistic on the Chinese market and investment prospects and their continuous investment and expansion in the country which reflects a commitment to the economic outlook. Automobiles and auto parts, energy, infrastructure, biology, petrification, communications, pharmaceuticals, software and finance services to attract the most foreign direct investment. Companies such as Volkswagen AG, Samsung Electronics, Nippon Electric Glass Co. and Intel Group have substantial investments in the fields above since 2015.

Uber the Untied States ride hailing firm committed in investing 6.3 billion yuan in China and aimed to break into it huge tourism industry with business ranging from transportation to automotive financing. Starbucks is also planning to open 500 stores in China the largest market outside of the US creating 10,000 jobs in the country every year until 2019. Based on the ministry, foreign invested enterprises is playing a key role in China with investment from overseas companies that currently contributing to half of all foreign trade in China, one quarter of the industrial output, one seventh of urban employment and a fifth of tax income. Furthermore China is attracting an increase in the number of high end functional organizations ranging from multinational companies headquarters and research and development centers.

Compared to traditional heavy industries that are facing continuous weakness, the services sector is more favored by foreign investors that utilized 477 billion yuan of foreign investment in 2015 with a year on year increase of 17 percent. The service sector became a significant field in attracting foreign capital and the rise only shows a further optimization of the foreign capital industrial structure together with China’s economic transformation and upgrading. The service sector represents the strength of the country and it must be utilized further the foreign capital to develop the sector.

The ministry stated that the service sector accounts for 245 billion yuan in foreign direct investment for 2015, as high tech manufacturing was at 58 billion yuan and increase of 9.5 percent from 2014 or 23 percent of investment in the manufacturing sector.

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