BERLIN: In its East Asia and the Pacific Economic Update for April 2023, titled “Reviving Growth,” the World Bank forecast that the projected slowdown in growth in advanced economies may be largely offset by signs of revival in China’s economy.
This was reflected in the fact that heads of state and chief executives of global corporations have been visiting China one after the other, united in the belief that China and its market are not an option, but a need.
Productive business ties
The essence of China-European Union economic and trade relations is complementarity and mutual benefit.
In 2022, China-EU trade and economic cooperation remained resilient and dynamic, and the high-level dialogues set the course for China-EU trade and economic cooperation. The total bilateral trade in goods between China and the EU was valued at 5,646.798 billion yuan (about $821.24 billion), up 5.6 percent year on year.
German corporations invested a record 11.5 billion euros (about $12.5 billion) in China in 2022, according to the German Economic Institute report released on March 29. For German executives, the growth prospects in the Chinese sales market are simply “too attractive.”
“For most companies, withdrawing from the Chinese market is not an issue at the moment,” said a recent study by the German Association of Materials Management, Purchasing and Logistics, adding that establishing alternative supplier structures to the existing business in China is complex and resource-intensive.
“We have enjoyed very strong and productive relationships with local partners in China for many years and all the communication channels. We would just like to continue that,” said Ola Kaellenius, chairman of the Board of Management of Mercedes-Benz Group AG, in his latest interview with Xinhua.
Looking back into the last 20 to 30 years, Kaellenius said China has been opening up its economy to become an integral part of the global economy. He considered China’s opening-up a success story that enabled Chinese startups and big companies to grow their businesses and facilitated foreign direct investment, adding that China’s further opening-up would likely prompt Mercedes-Benz to increase its investments.
Kaellenius said that what should not happen, however, is protectionism because if economic regions fall into protectionism, it will ultimately slow down growth.
“So we want to make our voice heard and remind everybody that it is opening-up around the world that has led to economic growth,” he said.
Fabrice Megarbane, president of L’Oreal North Asia Zone and CEO of L’Oreal China, told Xinhua that his group was overall optimistic and ambitious in the short and long term about China.
Since China optimized its Covid response, “we have already seen potential opportunities in the market which makes us even more bullish about China’s economic outlook and prospects,” said Megarbane in a recent interview with Xinhua.
The French cosmetics giant was preparing for the beauty market rebound. From the first week of February, consumer traffic and purchases have revealed positive signs and L’Oreal expects a progressive rebound from Q2 and consumer enthusiasm to bounce back in all categories, said Megarbane.
His boss, L’Oreal’s chief executive Nicolas Hieronimus, who visited China last month, shared his enthusiasm.
“Activity and consumption are gradually picking up, with good prospects in sight. I came back super energized and very confident for the market,” Hieronimus told the French daily Le Figaro. “It’s the group’s second-largest market and things are changing very fast there.”
A good number of French bosses have “jumped on the plane” to resume contact in person with their business partners in China and returned with full confidence in the potential of the Chinese market, according to a front-page article published by Le Figaro Economie on Monday.
Franck Lebouchard, head of the French acoustic engineering company Devialet, was among those who couldn’t wait to go to China.
Now back in France after a two-week stay in China where he met with some of the managers of BYD, the leading Chinese manufacturer of electric vehicles, Lebouchard told the French daily: “We fell into each other’s arms, even though we had never seen each other.”
All the French bosses came back from China with the certainty that the country still has a lot of potential, Le Figaro wrote, and “all of them intend to continue their investments there.”
