Foxconn Photo: VCG

While some foreign media outlets vehemently hype up the so-called narrative of "foreign capitals fleeing China," Foxconn Technology Group, the world's leading electronics manufacturer, is making a high-profile expansion in the Chinese mainland, underscoring the increasing attractiveness of China as a popular destination for global businesses amid the country's commitment to opening up its market and economy-wide industrial upgrade.

An executive meeting of the State Council - China's cabinet - on Monday approved the 2024 edition of a negative list for foreign investment access, pledging that China will relax restrictions on foreign investment further by completely abolishing entry barriers in the manufacturing sector, while accelerating the opening-up of sectors such as telecommunication, education and healthcare services.

Experts believe that investing in China offers a valuable strategic opportunity for multinationals, both short and long term, due to the country's vast market, abundant talent, and rapid industrial upgrades driven by new quality productive forces. These advantages create ample opportunities for ambitious global enterprises.

'World factory' status remains strong

Foxconn has made headlines recently as it is reportedly hiring approximately 50,000 workers at its factory in Zhengzhou, capital of Central China's Henan Province, to prepare for Apple's launch of iPhone 16 in China while also building a new business headquarter in Zhengzhou.

This marks a high-profile expansion in the Chinese mainland market despite some Western media hype up the Apple supplier's shift to other markets outside China.

"We're in the peak hiring season now. Monthly salaries are about 8,000 yuan ($1,115), with an hourly wage of 25-26 yuan. We need a lot of workers and will take as many as we can get," a recruitment manager surnamed Wu at Foxconn's Zhengzhou plant confirmed with the Global Times on Monday.

More importantly, Foxconn announced its plan to invest 1 billion yuan ($137.6 million) to set up a new business headquarters in Zhengzhou, as it has signed a strategic partnership with the Henan provincial government in July. The strategic cooperation focuses on emerging industries - electric vehicles (EVs), artificial intelligence, digital health and robotics. 

"Foxconn's expansion in the mainland challenges those sensationalizing the restructuring of global supply chains to exclude China while underscoring the company's confidence in the mainland's business environment," Li Chang'an, a professor at the Academy of China Open Economy Studies from the University of International Business and Economics in Beijing, told the Global Times on Tuesday.

As a rising foreign investment destination, China offers significant new opportunities, thanks to the country's development of new quality productive forces, complete industrial system and vast market, Li said. He said stable Chinese economic recovery, along with the restructuring of global value chains, will attract continuous inflow of foreign investment in the long run.

Li said multinationals tend to attach more importance to a complete industrial chain rather than just looking at labor costs, because a complete industrial chain reduces costs and increases efficiency.

"It turned out to be unwise for certain companies to shift production outside China, because we need stable supply of water and electricity, highly efficient and extensive transport infrastructure, complete industrial chains, and talent in a variety of emerging industries like livestreaming - all of which can be found in China," a manager of a Ningbo-based woodcraft manufacturer, who declined to be named, told the Global Times on Monday.

The manager said his factory is undergoing digital transformation, with almost no workers seen during the whole production process thanks to computerized numerical control machine tools.

Industrial chain upgrade

Experts said that contrary to some Western media claims, foreign enterprises have not withdrawn from China on a large scale, but rather they constantly upgrade their investment layout in China along with the country's industrial upgrade and transformation.

According to data from the Ministry of Commerce, China witnessed 26,870 new foreign-invested enterprises established in the first half of 2024, representing a 14.2 percent year-on-year growth.

The structure of foreign direct investment (FDI) continues to be optimized, with FDI in high-tech manufacturing in actual use reaching 63.75 billion yuan over the period to account for 12.8 percent of the country's total, up 2.4 percentage points on a yearly basis, the data showed.

"There are bright prospects for multinationals to invest in China," Wei Jigang, a research fellow with the Development Research Center of the State Council, told the Global Times on Monday.

In addition to a complete industrial system, China has notable advantages in scale effects. According to Wei, leveraging scale effects will help the country's manufacturing sector reduce costs and enhance efficiency, thereby ensuring strong global competitiveness for China's industrial sector.

"China continues to upgrade its traditional industries while nurturing new quality productive forces, which will inject new impetus to the country's industrial upgrade," Wei said. The close economic and trade ties between China and many other economies, along with deepening global industrial and supply chain cooperation, will further leverage China's economies of scale, he noted.

The third plenary session of the 20th Communist Party of China Central Committee held in Beijing in mid-July has emphasized leveraging China's vast market advantages to enhance its openness through expanded international cooperation. This signifies that China aims to enhance the investment and operational opportunities of global enterprises by delivering a more optimized business environment and high-standard opening-up, the Xinhua News Agency reported.

It has become a new trend for multinationals to launch research and development (R&D) centers in China in a bid to boost their industrial chain upgrade. Apple announced in July that it has opened a new R&D center in Shenzhen city, South China's Guangdong Province.

Chengdu BPlan Tech Co Ltd, an Italian high-tech company, was set up in Chengdu, capital of Southwest China's Sichuan Province, at the end of 2019 and started operation in 2020 despite of the COVID-19 pandemic.

The company's general manager, Alberto Borini, told the Global Times in a recent interview that the company plans to mass produce devices by the fourth quarter of 2024.

China is almost the largest market in the world and is still growing, and there are still a lot of opportunities to invest in China, for example in sectors including high-tech, electric cars and environment, Borini said. 

"There are many sectors where a foreign company can invest and be successful. Meanwhile, there is a stronger supply chain and high efficiency that is important for any manufacturing company," he remarked.