Foreign firms optimistic about Chinese economy amid COVID-19 management shift

SHANGHAI -- Foreign firms hold optimistic expectations for their performance in the Chinese market in the coming year as the economic recovery gathers steam after China continues to refine COVID-19 policies.

With the mutation of the virus, the popularization of vaccination, and the accumulation of experience in prevention and control, China has announced that it will be downgrading its management of COVID-19 as of Jan 8, 2023. The virus is now treated as a Class B infection, with COVID-related quarantine regulations eased and restrictions on international flights lifted.

The shift in COVID-19 policy has been welcomed by many international business leaders. Clas Neumann, senior vice president of SAP, who voiced confidence in the Chinese market in a recent interview with Xinhua, is one of them.

"The COVID crisis over the last three years has brought uncertainties to our consumers. I believe the international businesses, as well as the domestic businesses, are happy to see the measures are getting changed," Neumann said. "I think this will be helpful for businesses in the mid and long run."

As a leading company for business software solutions, SAP currently has over 6,000 employees and serves over 15,000 clients in China. According to Neumann, the company will continue to build on innovation, such as cloud products in the Chinese market.

Despite the COVID-19 pandemic, Japan's Fujifilm has never stopped ramping up investment in China, convinced by the strong resilience of China's economy.

"We are very pleased to see that recently the Chinese government has further optimized the containment measures against COVID-19. Although it might bring some challenges in the short term, we believe we will see a meaningful recovery in the long run," said Kenichi Tanaka, president of Fujifilm (China) Investment Co Ltd. He expects business and technology exchanges between China and Japan will be promoted aggressively.

Zhu Chaoping, a global market strategist with J.P. Morgan Asset Management, noted that consumption will be the main force to revivify China's economic rebound in 2023 as the market has already seen a bounce in consumer and business confidence.

According to J.P. Morgan Asset Management's forecast, China's GDP growth may rebound to over 5 percent in 2023.

Alicia Garcia Herrero, chief economist for Asia Pacific at French investment bank Natixis, pointed out that as China's epidemic prevention and control enter a new stage, sectors including airlines and consumption, will benefit most.

"As many airlines globally are approaching the pre-pandemic revenue level, there is huge potential for Chinese and Asia Pacific airlines to catch up," she said, adding that with improved mobility and fewer restrictions, China's car sales shall also see a cyclical rebound.

Mauro De Felip, general manager of Ferrero China, holds a similar view. He pointed out that China has been particularly successful in managing the pandemic since the beginning of 2020, and now with new recent rules and measures, China will cope and adapt better to any new variants.

"I'm very optimistic, honestly speaking, because I am persuaded that the new phase will have a positive impact on the economy overall. The possibility to even more dynamics within the country as also from outside the country will benefit big time with China at the end," he said, expressing his strong confidence in the performance of the Italian sugar giant in the Chinese market.