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Tuesday, December 5, 2023

China’s 2023 CIFTIS Defies Pessimism, Attracts Foreign Investment

ChinaChina's 2023 CIFTIS Defies Pessimism, Attracts Foreign Investment

The 2023 China International Fair for Trade in Services (CIFTIS) has become a compelling testament to the allure of China’s services sector and a powerful rebuttal to the Western media’s pessimistic narratives regarding the Chinese economy’s future, according to Chinese analysts and observers. The event, one of the world’s largest services trade fairs, has witnessed the active participation of foreign companies and a plethora of deal announcements, underlining China’s economic resilience and global appeal.

As the 2023 CIFTIS entered its second day, multinational corporations expressed their unwavering confidence in the Chinese economy and advocated for strengthening mutually beneficial relationships. AstraZeneca, a UK-based pharmaceutical giant, a veteran participant in the CIFTIS, revealed its commitment to China’s market with three significant deals involving local partners. These agreements encompassed new drug commercialization, vaccine research and development, and joint initiatives for a novel pharmaceutical product. In a statement released to the Global Times, AstraZeneca emphasized the growing importance of China in its global strategy, acknowledging the country’s evolution from a primary sales market to a primary production base and, ultimately, a primary innovation center.

Further highlighting the Chinese market’s significance, Tesla, the US-based electric vehicle manufacturer, introduced a new version of its China-made Model 3 at the 2023 CIFTIS. This move marked the first time Tesla had launched a vehicle in China ahead of its release in the United States. Nestle SA, the Swiss multinational food and drink processing conglomerate, also seized the opportunity to showcase its presence, bringing 19 sub-brands in coffee and water to the exhibition. Zhang Xiqiang, CEO for China at Nestle SA, voiced his optimism, expressing the company’s desire to leverage the CIFTIS platform to deepen cooperation and reinforce its foothold in the Chinese market.

China’s steadfast commitment to openness and free trade is evident not only in the 2023 CIFTIS but also in a series of other major trade shows scheduled for the second half of the year. The upcoming third Belt and Road Forum for International Cooperation in Beijing in October, the sixth China International Import Expo in November in Shanghai, and the inaugural China International Supply Chain Expo in late November all underscore China’s dedication to expanding its market and sharing its development benefits globally.

Chinese experts have pointed out that while individual trade shows may have limited impact on overall foreign trade and investment growth, the collective presence of these top-level events reflects China’s unwavering resolve to open its market further and distribute its development dividends worldwide, instilling confidence among international businesses.

Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China, contended that Western-led smear campaigns attempting to depict China as suffering from a lack of capital confidence and capital flight are misguided. He asserted that events like the CIFTIS and the Belt and Road Forum for International Cooperation communicate a clear message: China’s economy is undergoing transformation and remains a robust and attractive destination for foreign companies.

China’s commitment to greater openness was reinforced by Chinese Commerce Minister Wang Wentao, who announced at a CIFTIS forum that China would reduce the number of items on the negative list for foreign investment and enhance openness in modern services. Wang Wentao stressed that China’s path to modernization would create new opportunities for global development.

Following US Commerce Secretary Gina Raimondo’s recent visit to China, where she encouraged American businesses to continue investing in China, several Western countries are now sending their business delegations to China. An Australian federal ministers’ delegation attended a high-level dialogue in Beijing, signaling a thaw in relations. Likewise, Japanese business leaders are planning a visit to China, marking their first trip since 2019 due to disruptions caused by the COVID-19 pandemic.

The United Kingdom had the largest business delegation at the CIFTIS, and data from the Ministry of Commerce (MOFCOM) showed that China experienced a remarkable 159.9 percent year-on-year increase in foreign direct investment from the UK in the first seven months of 2023. This underscores China’s attractiveness as an investment destination, even as the global economy faces challenges and uncertainties.

Chinese experts have highlighted that amidst a lackluster global economy, with issues ranging from inflation to debt, the substantial presence of overseas companies at this year’s CIFTIS underscores the event’s appeal. They emphasize that China’s CIFTIS provides participating countries with opportunities to expand their exports to China, contributing to economic growth and employment in their respective nations.

China’s trade in services has been a bright spot, outpacing trade in goods, and offering crucial support for high-quality economic development and new avenues for economic and trade cooperation. The service industry has consistently accounted for over 70 percent of foreign investment utilization, and its growth has bolstered the quality of the manufacturing sector. In 2022, China’s services imports and exports surged by 12.9 percent year-on-year to nearly 6 trillion yuan ($839.16 billion), ranking second globally for the ninth consecutive year. The momentum continued in the first seven months of the current year, with China’s service trade value growing by 8.1 percent year-on-year to reach 3.67 trillion yuan, according to MOFCOM.

Looking ahead, sectors such as technological innovation, the digital economy, healthcare, vocational education, and financial services are expected to become pivotal areas for attracting foreign investment and advancing China’s service industry development, according to Jane Yang, Managing Partner of Ernst & Young (EY) Beijing Office. These sectors hold the promise of further enhancing China’s economic attractiveness on the global stage.

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