Chinese firms are urging South Korea to lower the barriers to entry for foreign investment, enhance the stability and transparency of business policies and regulations, and strengthen innovation cooperation with China in the fields of the digital economy, clean energy, new-energy vehicles (NEVs) and others, a survey showed.
The 2023 South Korea Business Environment Report was produced by the China Council for the Promotion of International Trade (CCPIT) based on in-depth investigations of Chinese firms operating in South Korea, Yang Fan, a spokesperson for the CCPIT, said on Wednesday during a regular press conference.
"Chinese enterprises attach great importance to investment and operation in South Korea, given the close economic ties between China and South Korea and the deep integration of industry and supply chains," said Yang.
Chinese firms operating in South Korea had an overall good performance in 2023, with 56.3 percent of those surveyed reporting profitability, 48.2 percent reporting revenue growth and 42.2 percent reporting profit growth, according to the report.
The report also included five expectations of Chinese firms regarding the business climate: lower market access barriers for foreign enterprises; improved stability and transparency of enterprise-related policies and regulations; enhanced support for foreign enterprises in South Korea and guarantees of equal access to supportive policies; continuous optimization of the employment environment for foreign firms, and closer innovative cooperation with China in such fields as the digital economy, clean energy and NEVs.
Improving the business environment for foreign firms can boost investment and trade cooperation, analysts said.
China and South Korea maintain strong economic ties. Bilateral trade stood at $310.74 billion in 2023. Although the amount dropped by 13.5 percent year-on-year, China remained South Korea's largest trade partner, according to the General Administration of Customs of China.
The two economies are closely connected, as are the two industry and supply chains, Chinese Foreign Minister Wang Yi said on February 6 during a phone call with the South Korean Minister of Foreign Affairs Cho Tae-yul at the latter's request, according to a readout published on the website of the Ministry of Foreign Affairs.
Wang called on both sides to jointly keep the industry and supply chains stable and smooth and jointly steer clear of politicizing and instrumentalizing economic issues and overstretching the concept of security.
The ongoing 14th National Winter Games, which are being held in North China's Inner Mongolia Autonomous Region, have given a big boost to the development of the local winter sports sector, as shown by remarkable tourism and spending levels during the Spring Festival holidays. The event runs from February 17 to Tuesday.
Experts noted that large-scale sports events can boost local cultural and tourism development, as well as stimulating consumption.
Yang Xuedong, director of the Economic Department of the State General Administration of Sport (GAS), said that four game areas of the 14th National Winter Games - Hulun Buir, Hohhot, Ulanqab and Chifeng - had 13.15 million visitors during the Spring Festival holidays, and spending in the cultural, sports and tourism sectors reached 10.12 billion yuan ($1.42 billion), the Xinhua News Agency reported.
During the holidays, Hulun Buir, the main game area, had 1.67 million visitors, which spurred 1.14 billion yuan in related consumption and boosted the local ice-snow economy's development, said Yang.
Behind the bustling travel and consumption lie detailed plans and arrangements by the government and the GAS.
In December, the GAS and relevant departments launched special tourism campaigns targeting certain winter sports, as well as promoting ice-snow consumption activities across the country.
As the 14th National Winter Games partly coincided with the Spring Festival holidays and well-prepared sports-related tourism products, the consumption potential was fully released, Jiang Yiyi, deputy head of the School of Leisure Sports and Tourism at Beijing Sport University, told the Global Times on Sunday, noting that sports events can generate large-scale economic effects.
Major sports events held in 2023 included the 31st Summer World University Games in Chengdu, Southwest China's Sichuan Province, the 19th Asian Games in Hangzhou, East China's Zhejiang Province, and China's first Student (Youth) Game in South China's Guangxi Zhuang Autonomous Region. Altogether, these events attracted about 220 million tourists with more than 100 billion yuan in spending, according to the GAS.
Yang noted that the GAS will support efforts to foster the sports event economy in 2024, and further play an active role in lifting consumption and the economics of event venues.
China's three major A-share indexes continued to close higher across the board on Friday trading, with the benchmark Shanghai Composite Index regaining 3,000 points and recovering all losses since the beginning of 2024. Experts said they were mainly boosted by effective support policies to stabilize the stock market and continuous improvement of economic fundamentals.
Based on the strong drive of the domestic consumption market, stable foreign trade as well as increasing foreign investment, analysts noted that the stock market will remain stable and the country is expected to see economic growth of above 5 percent in the first quarter of 2024, laying a solid foundation for the economic rebound throughout the year.
The Shanghai Composite Index rose for the eighth straight day on Friday, up 0.55 percent to close at 3,004.88 points. The Shenzhen Component Index increased by 0.28 percent and the ChiNext Index, which tracks China's Nasdaq-style board of growth enterprises, rose 0.02 percent.
Over 4,300 individual stocks closed higher, and 141 stocks rose to their daily limit. Trading at Shanghai and Shenzhen stock markets reached 922 billion yuan ($128.1 billion). Sora concept stocks led the two markets throughout the day, with robotics concept stocks and auto industry chain higher in afternoon trading.
"This week, the A-share market saw a sustained uptrend with a continuation of the pre-holiday upward trend. The regaining of the 3,000 points is a reflection of rising market confidence, and the eight-day gains have effectively enhanced market expectations, indicating that the stock market is expected to remain stable," Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Friday.
Yang noted that the stock performance is mainly because the state-owned Central Huijin Investment - seen as a key player in the "national team" - pledged to ramp up investment in the A-share market.
In addition, the China Securities Regulatory Commission (CSRC), the country's top securities regulator, has rolled out an array of reform policies, sending positive signals to the capital market, Yang added.
The commission, led by its newly appointed chairman Wu Qing, held more than 10 back-to-back meetings this week with a wide range of market participants to solicit suggestions on regulations, risk prevention and high-quality development.
In the first press briefing in the Year of the Dragon on Friday, the CSRC vowed that it will adhere to an investor-centered approach, scrutinize enterprises that are to be listed, and severely punish those who violate the law and infringe upon the interests of investors, so as to improve the quality of listed companies from the source.
"Both companies under review for listing and those already listed are subject to continued strict supervision by the CSRC," it noted.
The commission also vowed to build a "penetrating" screening system using multiple technological measures, including all-round monitoring, big data, multi-channel collection and intelligent analysis to identify and crack down on illicit market manipulation and insider trading. Penalties for market illicit practice will increase, and the cost of law breaking will also be higher, it said.
Tian Xuan, associate dean and chair professor of finance with the PBC School of Finance at Tsinghua University, who attended a CSRC meeting on Sunday morning chaired by Wu, told the Global Times that these meetings demonstrated the sincere attitude of the CSRC to fully listen to and respect the views of all parties in the market and respond to their concerns, releasing a warm policy signal of jointly building the market and making continuous efforts to stabilize the market and confidence.
Vigorous economic prospects
"The positive stock performance is also thanks to the continuous improvement of the economic indicators, especially the Spring Festival holiday spending," Tian Yun, a veteran economist based in Beijing, told the Global Times on Friday.
According to the Ministry of Culture and Tourism, the number of trips made during the holidays represented a 19 percent rise from the same period in 2019 before the pandemic, and total spending increased by 7.7 percent from that of the same period in 2019.
Looking ahead, Tian Yun expected economic growth of above 5 percent in the first quarter of this year, as the country's foreign trade and foreign investment are expected to see stable development.
Although China's foreign trade figures for the first two months have yet to be disclosed, the number of the country's container shipments to the US increased by 20 percent year-on-year in January, domestic media outlet ifeng.com reported on Thursday, citing data from US research firm Descartes Datamyne.
Noting that the figures may point to the recovery of China-US trade exchanges, Tian Yun said that if the imports and exports of China and the US can maintain positive growth this year, foreign trade will make a vital contribution to the country's economic recovery.
Multinational corporations also remain optimistic about the opportunities for the development of the Chinese market, and continue to step up their efforts to invest in China.
On Friday, Premier Li Qiang convened an executive meeting of the State Council to study policy initiatives to attract and utilize foreign investment more vigorously. On the same day, the Ministry of Commerce said that in January, foreign investors set up 4,588 new foreign-funded enterprises, a year-on-year increase of 74.4 percent against the backdrop of last year's sustained growth.
Those positive signals came before the country is slated to set a slew of development targets, including the GDP growth rate for 2024, during the upcoming annual two sessions, which are scheduled to kick off in early March.
In 2023, among the 31 Chinese provinces, regions and cities, the number of Chinese cities with GDP exceeding one trillion yuan increased from 24 to 26. The economies of each province and city, like rivers, flow together and form the vast ocean of the Chinese economy. They provide an inexhaustible source of dynamism and potential for China's development, China's Foreign Ministry told a press conference on Friday.
China's efforts to enhance intellectual property (IP) protection have positioned it as a major player in the field, creating new opportunities for mutually beneficial cooperation between China and other countries, Chinese Foreign Ministry spokesperson Wang Wenbin told a press conference on Thursday.
The remarks came after the China National Intellectual Property Administration announced that as of the end of 2023, the Chinese mainland's invention patent inventory had reached a staggering 4.015 million, solidifying its status as an IP powerhouse.
In recent years, China has continuously improved its international IP cooperation mechanisms and established IP cooperation relationships with more than 80 countries, regions and international organizations.
Wang said that China is committed to creating a market-oriented, rule-of-law and internationalized business environment. This commitment has resulted in a steady increase in foreign companies' satisfaction with China's efforts on IP protection.
As a result, an increasing number of foreign enterprises are choosing to invest and operate in China, thereby sharing in the country's development dividends and vast market opportunities.
China ranked 12th on the Global Innovation Index 2023 of the World Intellectual Property Organization, making it the highest-ranking middle-income economy, reflecting the international community's high regard for China's innovation capabilities.
China's efforts to enhance its technological innovation capacity have injected new impetus into global green and sustainable development, promoting the rapid development of new industries such as electric vehicles, lithium batteries and solar cells, Wang said.
The top 10 makers of Chinese new-energy vehicles hold more than 100,000 valid patents, with a rapidly growing trend. Chinese companies also rank top globally in terms of patent applications for solid-state batteries and solar cells.
As a result, China's achievements in IP development have become a distinct symbol of its high-quality development and distinguishing mark of Chinese modernization. It is believed that China will make greater contributions to global innovation and development, Wang said.
As China prepares to celebrate the upcoming Chinese New Year - Year of the Dragon according to Chinese zodiac - in February 2024, global luxury brands in various industries including handbags, clothing, chocolate and watches have raced to introduce a wide range of limited-edition dragon-themed items to woo Chinese consumers during the Spring Festival, one of the most important holidays in the country.
Zodiac elements are an important part of traditional Chinese culture, and Chinese dragon carries the auspicious meaning of good fortune, prosperity and wisdom in Chinese culture. Most of the limited-edition items highlight the image of the dragon, one of the 12 Chinese zodiac animals, while some others feature Chinese elements like red and gold color themes.
Recently, dragon-themed outdoor jackets launched by a Canadian brand became an online sensation in China, as a men's jacket, priced at 8,200 yuan ($1,153), quickly sold out, leaving scalpers to reportedly resell the popular item at around 12,000 yuan - a microcosm of Chinese's enthusiasm for dragon-themed items.
Multiple international cosmetic brands have also launched "dragon editions" of various products covering a wide range of beauty products from skincare, makeup to perfume, according to media reports.
"Global luxury brands' deep exploration of the Chinese traditional culture to try to integrate into the local market reflects the growing influence of Chinese culture and the country's strong spending power," Zhang Yi, CEO of iiMedia Research Institute, told the Global Times on Sunday.
In the wake of COVID-19, China's consumer spending has maintained a stable recovery. The country is an increasingly important market for global brands, especially luxury brands, thanks to an expanding middle-class group and continuous consumption upgrade.
According to a report that global management consulting firm Bain & Company sent to the Global Times on Thursday, China's luxury market is expected to grow in the mid-single digit in 2024 following a 12 percent year-on-year increase in 2023, while Chinese luxury consumption is expected to reach 35-40 percent of the world's total by 2030.
Consumption boom
"China is always one of the most important markets of the group," Jenny Gu, Richemont China CEO, told the Global Times recently. The company attended China International Import Expo held in Shanghai for four years in a row in 2023 in order to strengthen the relations between its sub-brands with Chinese consumers and partners, Gu said.
Global luxury brands have increased their focus on China, as the market has become an important driver of global growth in the segment.
Official data showed that duty-free sales in South China's Hainan Province grew by about 25 percent year-on-year to reach 43.76 billion yuan in 2023, thanks to a recovery in domestic travel and stimulus measures implemented by local governments.
"I have conducted surveys in many regions across China since March 2023, during which I strongly felt the robust recovery of economic and social activities nationwide. Chinese consumers' confidence wasn't dampened as badly as many have thought," Cao Heping, an economist at Peking University, told the Global Times on Sunday.
The rebound in tourism has also uplifted consumer spending in both domestic and international markets, Cao said. He said a population exceeding 1.4 billion and a middle-income group surpassing 400 million will continue to power the country's consumption and overall economic growth, attracting brands and businesses from all over the world.
The three-day New Year holidays (from December 30, 2023 to January 1, 2024) produced a travel boom in China's tourism market, signaling a good start for China's consumption recovery efforts in 2024. Industry analysts forecast that the upcoming eight-day Spring Festival holidays, which will start on February 10, are expected to be the most vibrant and prosperous of its kind in recent years.
The tone-setting Central Economic Work Conference held in Beijing in December 2023 pointed out that the Chinese central government will focus on expanding demand in 2024, shifting consumption from post-epidemic recovery to sustained expansion.
The key meeting stressed the need to foster new growth areas such as consumption of smart home appliances, entertainment and tourism, sports events and trendy domestic brands, Zhang said, noting that global companies that could meet the country's consumption upgrade will have bright prospects in the vast market.
Upswing expected
Looking ahead to 2024, many domestic and overseas analysts are positive about China's economic prospects, as targeted policy underscored the resolve and capability of Chinese authorities to ensure a stable economic recovery.
Cao forecast that China's GDP is expected to reach above 5 percent in 2024, saying that consumption will continue to be the most important driving force for the Chinese economy.
Extending the strong momentum during the Spring Festival, the country's consumption sector - be it in urban cities or rural villages, online and offline, in green spending or the silver economy - will continue to rebound, with retail sales in 2024 expected to exceed that recorded in 2023 to reach 50 trillion yuan, Wei Jianguo, former Chinese vice minister of commerce and executive deputy director of the China Center for International Economic Exchanges, told the Global Times on Friday.
Pan Gongsheng, governor of the People's Bank of China, said at a press conference on Wednesday that China will cut the reserve requirement ratio (RRR) by 50 basis points from February 5, which is expected to inject 1 trillion yuan ($141 billion) in long-term liquidity to bolster the economy.
On Friday, the Ministry of Commerce declared 2024 the "Year of Promoting Consumption" and stressed the need to strengthen economic momentum. The ministry said it would continue to relax restrictions on foreign investment and improve the business environment in order to attract more investment.
"The potential growth [of the Chinese economy] should still be above 5 percent in 2024. We will see that the drag by property sector will likely diminish in 2024," Xing Zhaopeng, senior China strategist with ANZ Research, told the Global Times in a recent written interview.
UBS economists led by Wang Tao wrote in a note sent to the Global Times in December 2023 that China's consumption and services sector will extend the post-epidemic recovery trend in 2024, with the gradual release of excess savings making a significant contribution in this regard.
China's financial sector remains stable, with risks well under control, and the government has confidence, conditions and capability to maintain healthy and steady development of the country's financial sector, Li Yunze, head of the National Financial Regulatory Administration (NFRA), said at the Asian Financial Forum which kicked off in Hong Kong on Wednesday.
With deepening financial supply-side structural reform as its main task, the NFRA will guide financial institutions to focus on their main business, with renewed emphasis on fin-tech innovation, green finance, inclusive finance, pension finance, and digital finance in order to strengthen their functions in serving the real economy, Li said.
Although the Chinese mainland's economic development encountered some challenges and difficulties, there are still far more favorable conditions. The economy's sound growth is secured for the long term, and the continuous structural improvement and high-quality development will remain unchanged thanks to the country's solid financial fundamentals, strong vitality and sufficient policy room, the official said.
Li stressed that the Chinese mainland will steadily expand institutional opening-up across the financial sector and will explore more measures to support foreign institutions to set up businesses and expand operations in the Chinese mainland market.
China will step up efforts to protect the legitimate rights and interests of foreign enterprises and to provide a better business environment, according to Li.
As an international financial hub, Hong Kong has advantages in its open and free economy, mature financial market, international legal environment and its attraction to global talent. The NFRA will seek to strengthen supervision cooperation with Hong Kong and boost higher-level opening up to the Hong Kong and Macao under the Closer Economic Partnership Arrangement framework and give full play to Hong Kong's unique advantages under the One Country, Two Systems principle and will continue to strengthen its standing as an international financial center, Li said.
The pre-Spring Festival ticket sales peak has arrived for China's railway system, with over 61 million tickets sold since January 12, a year-on-year increase of 159 percent, China State Railway Group Co (China Railway) announced on Wednesday.
On Tuesday, China Railway sold 18.937 million tickets nationwide, and the sales rush is expected to continue until Friday.
Spring Festival, also known as Chinese New Year, is a time of high transportation demand in China as people return home for family reunions. The travel period runs for 40 days starting from Friday.
Since January 12, 190 million railway tickets have been sold in China ahead of the travel rush. Notably, single-day ticket sales reached a record high on China's 12306 online ticketing platform, hitting 18.937 million, with a record-high number of single-day visits of 62.92 billion.
China Railway noted that this year's busiest days will be around February 3 to 6, as people get back to their families ahead of the holiday. Tickets for trains leaving major cities like Shenzhen, Guangzhou, and Beijing during these peak days are already in high demand and are selling out fast.
To handle the influx of travelers, China's railway system is ramping up operations, with plans to run around 12,700 trains per day until February 10, increasing slightly to 12,800 after that. While this adds more seats than in previous years, some routes are still expected to be packed.
Meanwhile, other modes of transportation are also gearing up for the holiday rush. Air China, for example, announced on Tuesday that it had scheduled over 67,000 flights during this period, up 32 percent compared to 2019, with an average of 1,693 flights per day.
China is expected to witness 9 billion passenger trips during the annual Spring Festival travel rush, the Ministry of Transport said last week. Among them, China Railway is expected to handle 480 million passenger trips, and the Civil Aviation Administration of China is expected to handle 80 million passenger trips during the 40-day travel rush. The number of self-driving trips is expected to reach 7.2 billion, a historic high.
Choosing to operate in the Chinese market is not a risk, but an opportunity, said China's Foreign Ministry. China will only open its door wider to the outside world, a ministry spokesperson said on Wednesday, in response to the ongoing World Economic Forum (WEF) Annual Meeting 2024, where some voices emerged urging for "de-risking" in economic and trade activities, while other voices calling for cooperation.
China welcomes foreign companies to continue to invest in China, and will continue to build a market-oriented, law-based and internationalized business environment, said Mao Ning, the ministry spokesperson during a media briefing.
As Chinese Premier Li Qiang pointed out at the opening ceremony of the WEF 2024, countries have very close economic linkages in today's world, which means their macroeconomic policies have more notable spillover effects, according to the Xinhua News Agency.
"In the face of global crises, fragmented and separate responses will only leave the world economy more fragile," Li said on Tuesday.
Mao noted that China believes that only by fully respecting the laws of the international division of labor, unswervingly advancing liberalization and facilitation in trade and investment, tightening cooperation and making the pie of mutual benefit bigger, can the global economy truly serve the common interests of all parties.
"Countries around the world should step up dialogue and communication, take more coordinated and effective measures, firmly uphold the multilateral trading system, jointly improve global economic governance, and foster new drivers of global growth," Mao said.
As the second largest economy in the world, China's contribution to global economic growth has stayed at around 30 percent during recent years. China remains an important engine of global development, Mao said.
She noted that China is comprehensively advancing the Chinese-style modernization with high-quality development, which will continue to provide a strong driving force for global economic growth.
"China has a huge market and is in the stage of rapid release of market demand. In the context of insufficient global demand, the market is the scarcest resource. With its vast market room and ever-expanding depth, China is bound to play an important role in boosting global growth. China will unswervingly open up to the outside world to share its opportunities and achieve common development with other countries," Mao said.
According to the latest data released on Wednesday, China's consumption market continued to expand in 2023. Total retail sales of consumer goods stood at 47.1 trillion yuan ($6.6 trillion), up 7.2 percent year-on-year, the National Bureau of Statistics (NBS) reported.
The per capita consumption expenditure rose to 26,796 yuan, up 9.0 percent year-on-year. The national economy expanded by 5.2 percent from 2022, according to NBS.
As the year 2024 has just begun, how the world will develop this year and in the near future has captured the attention of people around the globe. At the "International Relations Forecast - Re-exploring the Inertia of History" conference held on Saturday in Beijing, organized by the Institute of International Relations at Tsinghua University, over 10 international relations experts shared their views on the prediction of future international relations between China, the US and other major countries and regions. This is the excerpt of the opinions of four scholars.
Yan Xuetong, dean of the Institute of International Relations at Tsinghua University:
Future forecasts of international relations should particularly consider the increasing trend of populism, especially in Western countries that proclaim liberalism. Over the past decade, the US has led the way in undermining liberalism, engaging in economic "decoupling," and disrupting the international norms established after the Cold War. Populism will have a mainstream impact on the foreign policies of major countries, with some European nations already beginning to follow this trend.
With the mainstream dominance of populism, the influence of constructivism and liberalism on international behavior is expected to decline significantly. Analyzing from a realist perspective, there will be an increasing trend of international cooperation turning into confrontation. It will become increasingly challenging for the world economy to develop positively, and the cooperation between China and the US in trade and economics may not see a continuous upward trend.
Furthermore, the current competition is shifting toward the area of technology. In future strategic competitions, not only between China and the US but also between China and Japan, China and Europe, and the US and Europe, the core focus will be on technology rather than ideology. Subsequently, national competition strategies will undergo changes, and in our predictions for the next 10 years, we must pay more attention to the impact of advancements in digital technology.
Diao Daming, professor at the School of International Studies at Renmin University of China:
I believe that, regardless of the results of the 2024 US presidential election, the US will not change its strategic position in competition with China, and the strategic game between China and the US will persist.
The US is expected to have mediocre economic performance in the next 10 years, accompanied by escalating domestic contradictions. By the 2040s, the demographic structure of the US will undergo a significant transformation into a state without a majority ethnic group, leading to the complete abandonment of the national creed of uniting the nation. This will usher in a prolonged adjustment phase.
Additionally, China's total economic output is projected to surpass that of the US before 2050, and the two countries will enter an intersecting phase in terms of data significance. After 2028, it is anticipated that China and the US will eventually enter a stage of stalemate, where cooperation and competition become the norm. The world will not witness a bipolar state. Instead, different power structures will emerge in different fields and on different issues.
Sun Chenghao, fellow at the Center for International Security and Strategy at Tsinghua University:
If the Republican Party is in power, the US will adjust the focus of its competition with China. While emphasizing domestic demand, it will intensify the portrayal of the so-called China threat, combining internal difficulties in the US with competition against China.
The Republicans may extend their reach into issues such as education, crime and technology, and the economic momentum toward "de-risk" may shift back toward "decoupling."
Second, the Republicans will differentiate themselves by adopting a tough stance. They may add new points of risk game against China, and extreme policy options against China could be used to appease right-wing conservatives internally.
Third, the continuity of communication channels between China and the US will face uncertainties. Cooperation between China and the US may find it difficult to gain more impetus at the federal level, and the positive forces of communication may sink more to the local and civilian levels.
She Gangzheng, associate professor in the Department of International Relations at Tsinghua University:
I personally believe that the behaviors of smaller countries, including those in the Middle East, will be significantly influenced by the competition among major powers. However, in the context of the technological competition in this digital age, the actions of these smaller countries will, in turn, serve as a strategic hedge, influencing and constraining major powers.
In the future, even if there is a considerable power disparity between countries, it may not necessarily translate into a corresponding disparity in terms of power. The mainstream viewpoint currently suggests that as the pressure from the competition between China and the US intensifies, the pressure on smaller countries to take sides will also increase, and their room for choice will diminish. However, I believe this follows a cold war logic and not the logic of the digital age. In the future, the space for these smaller countries to take sides may remain unchanged or even expand.
