The bustling scene of the Ningbo-Zhoushan Port in East China's Zhejiang Province on Januray 4, 2023 Photo: VCG

Editor's Note:
China on Sunday officially entered a new phase of COVID-19 response as it downgraded its COVID-19 management from Class A to Class B. As the country moves steadily toward a full recovery, it's also crucial to take stock on how China's anti-epidemic strategy fared economically over the past three years. To that end, the Global Times is publishing a series of articles that illustrate how China's anti-COVID strategy effectively helped secure the solid fundamentals and bright outlooks of the world's second-largest economy. This is the first installment of the series.

At a regular press conference of China's Ministry of Commerce held on Friday, the spokesperson said that many foreign-funded enterprises indicated that they had begun to schedule high-level visits to China - while this will just be the prelude. 

Over the past three years or so, China has achieved efficient coordination of epidemic control and economic development, which is obvious to foreign-funded enterprises in China. From Sunday, China has entered a new phase of COVID-19 response and started to manage COVID-19 with measures against Class B infectious diseases instead of the more serious Class A, and no longer adopts quarantine infectious disease management measures for entry personnel and products.  

This year is also the first year after the successful conclusion of 20th National Congress of the Communist Party of China (CPC). Foreign companies in China have already begun to rush ahead, casting a vote of confidence in China. These all sent a strong signal, that is, more than three years after the outbreak of the epidemic, China, as the world's largest market, still maintains a huge attraction for foreign investment.

In 2021, global foreign direct investment (FDI) amounted to roughly $1.6 trillion, and China's total FDI reached a record $173.48 billion. I estimate that China's foreign investment in 2022 is expected to exceed $200 billion, and will reach $220 billion to $230 billion this year, which means China is highly likely to surpass the US, becoming the country that attracts the most foreign direct investment in the world. These demonstrated that China has stabilized foreign investment while effectively containing the epidemic. 

Over the short to medium term, there will be three "simultaneous developments" in China's efforts of attracting foreign investment: the simultaneous development of foreign investment in the eastern coastal areas and the central and western regions, and the central and western regions are likely to surpass the coastal areas. Large projects worth tens of billions of dollars and small projects of less than 1 billion dollars, multinational corporations and small and medium-sized enterprises in the US and Europe will be equally important; high-tech projects are carried out simultaneously with manufacturing and labor-intensive projects. These developments have not just emerged as a result of the adjustment and optimization of China epidemic prevention and control measures, but are the concentrated release of relevant advantages and potential over the three-year anti-epidemic process.

The Communist Party of China Central Committee, with Comrade Xi Jinping at its core, has united and led the whole Party and the Chinese people in pursuing progress while maintaining stability. By focusing on epidemic prevention and control and economic development at the same time, China has achieved major positive results of balancing epidemic prevention and control with economic and social development.

First, China's high-level opening-up and stable investment environment have been recognized by foreign businessmen, especially multinational companies. For three years, this megatrend has continued unabated. A high-level open market full of certainty, innovation, fairness and justice is a fertile ground for global investors to realize their dreams.

German carmaker BMW officially entered China in 1994, and already has more than 460 suppliers and more than six million customers in China. In 2021, BMW's global sales reached 2.5215 million vehicles, and China's sales reach 846,200 vehicles, accounting for 33.5 percent of the world's total. China is BMW's largest single market.

As a member of the delegation of German companies, Chairman of BMW Group Oliver Zipse visited China with German Chancellor Olaf Scholz in November 2022. Just seven days after Zipse's visit to China, BMW announced that it will invest 10 billion yuan in the large-scale expansion of power battery production at BMW's Northeast China's Shenyang production base. BMW has also established the largest R&D and innovation layout outside Germany in China based on its investment in Beijing, Shanghai, Shenyang and Nanjing in East China's Jiangsu Province.

There are many multinational companies like BMW that have and will continue to cultivate the Chinese market. They have seen that when the epidemic has clouded the world, China has found an optimal path in dealing with the virus - to firstly get the epidemic under control, partially resumed production and then embarked on the road of a full recovery. They also know that with the establishment of an ideal business environment, implementation of the Foreign Investment Law, and the launch of a national negative list, China's opening-up has reached a new level.

Second, a majority of foreign investors are very satisfied with China's high-quality government services. Over the past three years, relevant departments have continued to pay attention to the operating conditions of foreign-funded enterprises in China, actively coordinated resources to help solve difficulties caused by the epidemic, and made every effort to ensure the production and operation of foreign-funded enterprises in China.

Take Tesla for example, Tesla China said that its Shanghai plant has still maintained efficient production and excellent output in 2022. According to the 2022 global production and delivery report released by Tesla on January 3, Tesla's annual delivery volume was 1.31 million vehicles, of which the Shanghai Gigafactory delivered over 710,000 vehicles in 2022, accounting for half of the global delivery.

Third, the attractiveness of China, as a mega market, is increasingly growing and playing a bigger role. No matter which country the capitals come from, they tend to build factories and R&D centers in China, and follow local market trends to adjust and change marketing strategies and production plans. Over the past three years, although the pandemic has severely impacted the economies of many countries in the world, with some facing risks of a disrupted supply chain, China has effectively controlled the situation and has become one of the most outstanding major economies, attracting more headquarters of multinational companies, as well as R&D centers to settle here.

In particular, it needs to be emphasized that foreign companies in China have seen that in the past three years, while fighting the virus, China has firmly implemented high-level opening-up, which serves as a reassurance for all foreign firms in China. Three aspects need to be highlighted in further promoting China's high-level opening-up.

First, the principles of fairness, justice and equality. We always believe that as long as a factory or enterprise is established on Chinese territory, no matter whether it is a state-owned enterprise, a private enterprise or a foreign enterprise, it will be treated equally and fairly. This is one of the most important reasons why foreign companies value the Chinese market, and also help improve China's business environment.

The Foreign Investment Law, which was officially entered into force in 2020, consolidated the major reform achievements of the foreign investment management system in the form of legislation, clearly granted national treatment to foreign-funded enterprises, and created an institutional environment where domestic and foreign capital are equal. In the Opinions on Accelerating the Construction of a National Unified Market issued by the central government last year, the word "fairness" was mentioned 17 times in 30 articles.

Second, while doing a good job in deepening the opening-up of goods, services, capital, and talent, high-level opening-up also requires the steady expansion of rules, regulations, management, standards, and other institutional platforms. Take the standard as an example, whoever masters the standard will gain the initiative. We will continue to promote institutional opening-up to drive the formation of a new pattern of reform and opening-up at a higher level.

Third, further promote the business environment to be more market-oriented, ruled by law, and internationalized. For each province or autonomous region, or free trade zones, free trade ports, who make sufficient efforts in these aspects, its next step of opening-up can attract more foreign investment.

The Organization for Economic Co-operation and Development (OECD) predicts that the global economy will grow by 2.2 percent this year. In 2023, the optimization and adjustment of China's epidemic prevention measures will not only inject new vitality into the global fight against the epidemic, restore the economy, and boost development, but more importantly, it will bring hope and confidence to global development. I believe that China will lead the world with 8 percent economic growth rate this year, which will give great confidence to both developing and developed countries.

China will also make greater efforts to promote the development of regional economic integration and inject new impetus into regional and global economic growth. 

The year of 2023 marks a new beginning for China to develop bilateral, multilateral and regional economic cooperation. More policies to encourage foreign investment will be introduced, including further shortening the negative list, strengthening the protection of intellectual property rights, expanding market access for foreign capital, and increasing the promotion of a market-oriented, legalized, and internationalized business environment. We will also deepen the reform of important areas and key links, and increase the systematic construction of a new development pattern. A domestic market with strong endogenous power will also become the confidence for China's high-level opening-up to the outside world.

The author is a former Chinese vice minister of commerce.