Edward Tse

The View | China’s welcome to foreign firms a boon for manufacturing sector

The announcement that China will lift all restrictions on foreign participation in manufacturing shows the continued shift towards inclusiveness

Assuming the government addresses foreign firms’ concerns, expect more high-quality foreign investment in the manufacturing sector and cooperation with Chinese companies

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Workers assemble mini excavators in a heavy machinery factory in Suzhou, Jiangsu province, on October 23. Photo: AP

Edward Tse

Published: 6:30pm, 9 Nov 2023

During the Third Belt and Road Forum for International Cooperation held in Beijing last month, President Xi Jinping announced that China would lift all restrictions on foreign participation in manufacturing. This move demonstrated China’s continuing shift towards inclusiveness when it comes to foreign businesses.

The announcement also put a spotlight on China’s growing confidence in its ongoing “reform and opening up” process. China’s low-cost manufacturing sector has emerged over the past four decades and fuelled rapid growth. Consumers in the West have enjoyed lower-cost products while companies reaped higher profits.

In the past, Western nations outsourced their manufacturing and industrial activities to China. In the 2000s, the Chinese would likely have been the first to admit China had become a large, but not necessarily a strong, manufacturing nation – at least not yet.

Initially, China was known for copying Western products. With the spread of the internet and the associated information sharing, Chinese entrepreneurs quickly developed many innovative products and services.

Along the way, China’s innovations in manufacturing and technology evolved as did its unique blend of capabilities. Basic products, such as toys and clothes, gave way to advanced goods including computers and phones as China excelled in efficiency, quality and affordability.