Xinhua | Updated: 2024-03-01 09:55

GUANGZHOU -- US energy giant ExxonMobil plans to invest 10 billion yuan ($1.4 billion) in its Huizhou ethylene project in South China's Guangdong province this year.

Addressing the Guangdong Provincial High-quality Development Conference in Shenzhen recently, Jean-Marc Taton, chairman of ExxonMobil China, said ExxonMobil has already invested over 30 billion yuan in the first phase of its Huizhou ethylene project.

ExxonMobil is just one of the many foreign companies expanding their investments in China.

According to data from the Ministry of Commerce, in 2023, China's investment structure continued to be optimized, and the proportion of investment in high-tech industries reached 37.4 percent, marking a record high. Foreign investors invested in 53,766 newly established foreign-funded enterprises in China, a year-on-year increase of 39.7 percent.

Foreign companies are optimistic about the Chinese market, said Harley Seyedin, president of the American Chamber of Commerce in South China (AmCham South China), adding that the potential growth of the Chinese market is the primary driver for increasing investments in China or shifting investments from other markets to China, followed by industrial cluster effect and preferential policies.

The majority of the 183 companies studied are optimistic about the growth of the Chinese market, according to a report released by AmCham South China on Tuesday.

Of these companies, 76 percent plan to reinvest in China in 2024. For those who have plans for reinvestment in China in 2024, 45 percent state that their primary area of investment focuses on sales, marketing and business development. Other key areas include research and development, automation and productivity development, according to the report.

Over half of the companies studied believe that their overall return on investment (ROI) in China is better than their overall return on global investments. Eighty-eight percent of the companies studied have already made profits in China, among which 46 percent reported that they have met their budget expectations. Moreover, 90 percent of American companies have achieved profitability in China, according to the report.

Although the sales volume decreased slightly in 2023, the profit margin of Fluidmaster China, an American-funded sanitary ware products enterprise, increased more than expected.

David Yang, managing director-Asia of Fluidmaster China, said, "This reflects the trend of quality development, and high-end products are more competitive. We can also see that the entire market is recovering rapidly, and an increasing number of people are seeking a higher quality of life. Our goal is to achieve 5 percent to 10 percent growth this year."

Despite challenges in international economic cooperation and trade exchange, 86 percent of the companies studied claim that they will not decouple from the Chinese market due to US-China trade tensions.

In 2023, 62 percent of the companies studied chose not to shift their investments out of China. Sixty-six percent of American companies claim that they will remain committed to the Chinese market, representing the highest proportion of all businesses studied, said the report by AmCham South China.

David Jacques Roumanie, Asia General Manger of EuroKera (Guangzhou) Co Ltd, a US-France joint venture, feels optimistic about the Chinese market. "We are quite a representative of the economy of China somehow, because we followed the growth, we benefited from the growth until now. And I think we can replicate that in the future as well."

Guangzhou, the capital city of Guangdong province and known as south China's manufacturing hub, has maintained its status as the top investment destination in the country for seven consecutive years, followed by Shenzhen, Shanghai and Beijing. Over half of the companies studied see an improvement in the business environment in south China, an uptick of 5 percent compared with 2022, said the report by AmCham South China.

The development of regional convergence and the improvement of the business environment also provide more opportunities for foreign companies.

William Huang, managing partner at consulting firm Ernst & Young (EY) China South, said, "In April 2023, we opened a Greater Bay Area (GBA) center of excellence in Qianhai and focusing on technology and innovation. We hope to cooperate with the enterprises and other parties in developing AI blockchain and big data technologies and supporting the companies in the unit, which would result in better development in the GBA."