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Foreign companies set course for 'journey to the west'

By Zhong Nan (China Daily) Updated: 2015-03-18 10:26

Marijn van Tiggelen, president of Unilever North Asia, said the construction of the plant was a strategic step in the expansion of the company's global manufacturing base.

With progress in the development of the two economic belts and the operation of the Chengdu-Europe express railway, the geographical advantages and strategic position attracted Unilever to choose Sichuan to set up its third global production base in China, said Tiggelen.

Given the proximity of China's western regional markets, transportation costs will be slashed: the trip to Europe will be about 1,500 kilometers shorter for each shipment than for goods sent from Unilever's Hefei plant in Anhui province.

Eager to enhance its earnings ability in China, Solvay SA, one of Europe's largest chemical groups by revenue, plans to establish a number of offices in western China this year, as well as deploying more resources to grab share in China's vehicle market over the next three years.

The Belgian company hopes this could fuel the industry's robust and ecologically sustainable growth and make transport safer and more efficient. It will focus on four priorities: new materials for lightweight vehicles, electrification, powertrain efficiency and green technology.

China is the largest vehicle market in the world in terms of production, and the electric vehicle segment is one of the nation's seven emerging strategic industries. The country is forecast to have more than 5 million EVs on the road by 2020.

As they transform their economies and upgrade local industries, many Chinese cities and automotive enterprises want to solve problems such as air pollution and energy consumption caused by heavy automobile use.

Since China became a revenue powerhouse for global automakers, an increasing number of overseas auto companies have set up joint ventures in China, said Martin Laudenbach, Solvay's Asia-Pacific region president.

"They have synchronized the launch of new models in China with those in the United States and Europe, and started shipping them to China's neighboring countries through the Silk Road Economic Belt to further expand their export channels."

Huang Yiping, a professor at Peking University's national school of development, said that for the majority of foreign companies, even though there are some concerns about operating costs and market access, their revenue growth has remained stable and has been even faster than in other regional markets since the global financial crisis in 2008.

"As China continues to diversify its trade channels and investment categories in its neighboring markets through new trading routes and regional connectivity programs, foreign companies want to seize the opportunities to offset slower business growth in other parts of the world," said Huang.

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