Foreign investors, experts confident about China's economic potential

Optimism for the Chinese market and its economic potential is shown among foreign investors as they keep increasing their investment or operations in the country.

Data from the Ministry of Commerce showed that China's actual FDI (foreign direct investment) reached over 1.13 trillion yuan (about $158.89 billion) in 2023. Although the figure dropped 8 percent compared to 2022, it was still the third highest in history. 

In addition, the number of newly established foreign-invested enterprises in China rose to 53,766 last year, a 39.7-percent year-on-year increase. 

For example, Airbus in January opened a service center dedicated to the entire lifecycle of an aircraft in the city of Chengdu, which is the first such center outside Europe for the company. Data from the fast food chain KFC shows that the number of its stores operated in China has grown to over 10,000 as of December 2023.

A survey by the European Chamber of Commerce in China showed that about 59 percent of surveyed companies view China as one of their top three investment destinations.

"China's economy has sufficient internal driving force and great potential for sustained growth," said Tian Xuan, vice dean of Tsinghua University's PBC School of Finance.

At this year's Two Sessions, the Chinese government set an economic growth target of around 5 percent for 2024. According to Premier Li Qiang, the government has taken into account the need to boost employment and incomes and prevent and defuse risks in setting the target, and the growth rate is well aligned with the objectives of the 14th Five-Year Plan for economic development (2021-2025).

Analysts believe that an economic growth rate of around 5 percent is a goal that can be achieved through hard work, and it shows the enterprising and vigorous state of the Chinese government.

Setting such a target would help boost confidence, guide public expectations and further build consensus on development, said Zhou Li'an, a professor at Peking University.

Over the past decades, China's economy has overcome odds such as the COVID-19 pandemic, natural disasters and the global financial crisis, and has managed to maintain consistent growth while invigorating the global economy.

Since 2014, the Chinese economy has reached one milestone after another, with the country's GDP passing the 60-trillion-yuan, 80-trillion-yuan, and 100-trillion-yuan marks in 2014, 2017 and 2020. More recently, it went on to pass the 110-trillion-yuan and 120-trillion-yuan marks despite the impacts of the COVID-19 pandemic.

In 2023, China's economy grew by 5.2 percent, with the corresponding economic growth in a volume exceeding 6 trillion yuan (around $845.33 billion) in comparable prices. Such an increase in volume would take a 10-percent annual GDP growth rate to achieve 10 years ago.

Despite the hard-won achievements, the country is facing various challenges, such as external uncertainties, the lack of effective demand, relatively weak public expectations and over-capacity in certain sectors. Yet, business insiders believe that China has multiple advantages for economic development, such as a vast market, a complete industrial system, a huge and high-caliber workforce and growing sci-tech innovation capacity.

As a major manufacturing powerhouse, China boasts all the industrial categories listed in the UN industrial classification, and its manufacturing-added value accounts for 30 percent of the world's total. It's the world's second-largest consumer market and the largest online retail market. The abundance of high-quality factors also serves as a cushion against shocks.

A series of reform measures have also provided growth momentum and vitality. The country has put the development of new quality productive forces high on its agenda.

"The Chinese economy enjoys capability, advantages and opportunities to sustain growth, and the long-term positive trend remains unchanged," said Wang Changlin, vice president of the Chinese Academy of Social Sciences.

(With input from Xinhua)