Foreign companies continue to ramp up investment in China

Foreign companies and institutions have been intensifying their investments in China since 2024, pointing to the country’s significant potential and continuing attractiveness. This trend stands in stark contrast to narratives suggesting a withdrawal of foreign capital from China.

In the latest development, AllianceBernstein, a global asset management company, announced on Tuesday an increase in the registered capital of its branch in China from 200 million yuan ($27.62 million) to 300 million yuan.

This strategy change is part of a broader trend this year, with several other foreign firms boosting their stakes in the Chinese market.

In April, German carmaker BMW announced an additional investment of 20 billion yuan for major upgrades and technological innovations at the BMW Brilliance plant in Shenyang, Northeast China’s Liaoning Province.

Another German carmaker, Volkswagen, recently held a groundbreaking ceremony for its Phase III project in Hefei, East China’s Anhui Province, marking the establishment of the company’s largest research and development center outside Germany, according to media reports.

These additional investments by foreign firms reflect strong confidence in China's economic prospects and market potential. Despite global economic uncertainties, the consistent inflow of foreign investment highlights the robust and dynamic nature of the Chinese market, Bian Yongzu, a senior industry research fellow, told the Global Times on Tuesday.

In March, Neuberger Berman, an investment consulting company, increased the registered capital of its unit in China from 300 million yuan to 420 million yuan, up 40 percent, according to data from the National Enterprise Credit Information Publicity System.

According to data from TianYanCha.com, a China-based information platform, this company has undergone three capital increases since its first increase on December 25, 2022, and the registered capital has surged nearly 200 percent from 150 million yuan.

In February, the China subsidiary of Fidelity Investment Group, the US’ biggest fund management company, raised its registered capital from 130 million yuan to 160 million yuan, up 23 percent. It also undergone three capital increases since its first increase and the registered capital has surged over four times from the initial, which is about 217.06 million yuan.

“The investment strategies of these foreign institutions and companies show optimism about China's economic future,” Bian said, noting that foreign companies have drawn confidence from China’s financial regulatory mechanism as well as promising data for the first quarter that points to a strong recovery. “Foreign investors are adopting risk-averse strategies to cope with unstable overseas markets,” Bian added.

Bian said that the institutions are also looking at the comprehensive industrial system, vast consumer base, and favorable policies as key drivers behind their continued commitment to the market. He said that foreign capital will not blindly withdraw from China as these firms typically have large and professional research teams in China who are familiar with the real market environment and economic conditions.

Another major factor for the recent surge in foreign investment in China could be the upcoming third plenary session of the 20th Central Committee of the Communist Party of China (CPC) in July, which is expected to have positive outcomes regarding economic support policies. This will further boost confidence in the Chinese economy for both domestic and foreign enterprises, Bian noted.