China is pulling out all the stops to keep multinationals like Apple and its supplier Foxconn
in the country.
Such efforts to attract foreign investment come as the pandemic and geopolitical tensions push companies to diversify their supply chains away from China.
For the first time in 25 years, the American Chamber of Commerce in China found that less than half the respondents to its annual survey ranked China as a top three investment priority. The number of companies which are considering or starting to relocate their manufacturing and sourcing outside of China rose by 10 percentage points from a year ago, the survey found.
The majority of respondents don’t plan to relocate their supply chains, the AmCham report said.
The survey was conducted last fall, and results hadn’t changed significantly since China ended its stringent Covid controls, AmCham said. China’s Commerce Ministry didn’t respond to a request for comment.
After such a drop in sentiment, China is working hard to keep foreign businesses investing — and supporting domestic growth. The Commerce Ministry said Thursday that for the first time, it would launch events for an “Invest in China Year.”
In a sign of how hard local governments are trying to attract foreign dollars, top officials from Henan province in central China personally welcomed Foxconn Chairman Young Liu last week during his visit to his company’s factory there, the province announced.
Foxconn operates the world’s largest iPhone manufacturing facility in Henan’s capital, Zhengzhou.
The party secretaries of both Zhengzhou city and Henan province met with Foxconn — along with the mayor and governor, state media said. In China, the ruling Chinese Communist Party takes the lead in decision making, and such high-level participation in the meeting with Foxconn indicates any matters discussed can be implemented more quickly.
During a Covid outbreak and subsequent lockdown last year, Foxconn’s factory in Zhengzhou became a hotspot of attention when some of its roughly 200,000 workers decided to leave and walk home.
Apple later said the Zhengzhou factory disruptions would delay deliveries of some iPhone 14 models.
China ended its stringent Covid controls in December. By February, Foxconn’s Zhengzhou factory was producing at full capacity, with staff working two shifts to meet high client demand, factory manager Wang Xue told local media.
Foxconn confirmed its chairman visited Henan and planned to collaborate with the local government on projects. But the company did not share details on those investment plans, or whether they have any intention to shift production out of China.