World-famous firms investing big in the People’s Republic
With everything from the US trade war to COVID-19 supply chain disruption and surging production costs prompting an exodus of foreign firms from China, you’d be forgiven for thinking every single Western company is pulling out of the Asian nation. But you’d be very wrong indeed. Eager to tap into the world’s biggest domestic market, a slew of familiar names are bucking the trend by doubling down on their investments in the country. Click or scroll through to see the big Western businesses buying into China right now. All dollar values in US dollars.
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Tesla
Leading the way is California’s Tesla. CEO Elon Musk has been described as having a love affair with China and is pushing ahead with a massive expansion of his electric car and battery company in the country since investing a whopping $2 billion (£1.7bn) in the Shanghai Gigabit 3 factory, which was completed last year. Tesla has even launched an insurance business in China and gone as far as to join a lawsuit suing the US government for imposing tariffs on Chinese-made car parts.
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Walmart
Likewise, Walmart, which is the planet’s biggest company by revenue, won’t be turning its back on the People’s Republic any time soon. The Arkansas-based retail behemoth is building 500 new stores in China within the next five to seven years, doubling its footprint in the country, which is on track to become the largest grocery market in the world by 2023. Walmart is well-placed to grow in the nation thanks in part to a lucrative e-commerce tie-up with JD.com, China’s largest retailer.
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Costco
US chain Costco is also in the midst of a major expansion in China. The warehouse club retailer, which is headquartered in Washington State, opened its first outlet in the country last year to much hype and the Shanghai store has been raking it in ever since. Costco is now planning to open a string of locations across mainland China.
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The Coca-Cola Company
The Coca-Cola Company is sticking with China no matter what. “We are here for the long term,” said Curt Ferguson, president of Coca-Cola Greater China and Korea, back in March. “We’re here to invest. We’re here to build it.” The Atlanta-headquartered firm, which views China as Coca-Cola’s next biggest market, is putting its money where its mouth is by pumping $75 million (£57.9m) into new production lines and a factory in the country. It is also one of a number of companies taking legal action against the US government’s tariffs on China.
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PepsiCo
Coca-Cola’s perennial arch-rival is going all out to expand in China too. New York’s PepsiCo has been operating in the country for almost 40 years and strengthened its position in March by parting with $705 million (£543.7m) to acquire Be & Cheery, one of China’s leading online snack companies, which sells nuts, dried fruit and other moreish nibbles on numerous e-commerce platforms.
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Exxon Mobil
Despite everything, foreign mergers and acquisitions have hit record levels in China of late, partly as a result of an easing of regulations on overseas ownership. A recent move that allows foreigners to own chemical plants in the country has prompted Texan oil and gas corporation Exxon Mobil to build a $10 billion (£7.7bn) petrochemical complex in the city of Huizhou in China’s Guangdong Province.
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Beyond Meat
LA’s Beyond Meat sees China as a huge untapped market for the firm’s plant-based burgers, sausages and other products, and recently announced that it had closed a deal with the Jiaxing Economic & Technological Development Zone to open two new production facilities near Shanghai.
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Impossible Foods
Clearly keen not to be left out, Beyond Meat’s rival Impossible Foods is also eyeing the potential of the Chinese market and the likely enormous consumer demand in the country for plant-based meat. The Californian company, which produces genetically-modified vegan meat-a-likes, is currently awaiting regulatory approval to operate in the People’s Republic.
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Nestlé
Nestlé is getting in the act as well. The world’s largest food company is launching a plant-based products facility in the city of Tianjin in northeast China. Interestingly, European companies are under less pressure than their US counterparts to withdraw from the country.
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Daimler
Germany’s Daimler has been doing a roaring trade in China, so it comes as no surprise that the Mercedes-Benz and Smart owner is concentrating the company’s global expansion plans in the Asian country. In fact, Daimler admitted last month that it has no plans to increase production in Germany, preferring instead to put its investment money into facilities in China, according to the Financial Times.
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Yum China
While Yum China is based in Shanghai, the fast food conglomerate is incorporated in America. The firm launched its first Taco Bell restaurant in Beijing in August, was recently listed on the Hong Kong stock exchange and is planning to open 850 new KFC and Pizza Hut locations in China’s smaller cities this year, taking its grand total to almost 10,000.
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Lavazza
Italian family-owned coffee company Lavazza made its first foray into China earlier this year when it opened a flagship coffee shop in Shanghai, the first branch outside Italy. Famed for its smooth espresso, the venerable firm is partnering with Yum China to develop its coffee shop concept in the People’s Republic.
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Tim Hortons
Canadian coffee shop chain Tim Hortons is aiming even bigger in China. The Toronto-headquartered company is planning to expand its presence in the country from 50 to 1,500 locations and has scored a plum investment from Chinese tech titan Tencent to help fund the project.
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Starbucks
Staying with Western coffee shop chains, Starbucks is firmly established in China. The company, which hails from Seattle, now boasts 4,400 locations across the country, having debuted there in 1999. Not sitting on its laurels, however, the US corporation continues to expand in China, focusing in particular on ‘click and collect’ online ordering.
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Bayer
With the Chinese government’s ‘Healthy China 2030’ initiative simplifying the medication approval process, Western pharmaceutical companies such as Bayer are lining up to invest in the country. The German drugmaker, which already has a strong footing in China, is constructing a new $59 million (£45.8m) plant in Beijing to foster innovation and shore up supplies of heart and diabetes medications.
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AXA
By virtue of the loosening of financial restrictions on foreign ownership, French insurance titan AXA has been able to buy out Chinese shareholders to become the largest wholly overseas-owned property and casualty insurance company in the country. The firm intends to cement its position by expanding operations on a considerable scale, primarily targeting China’s middle-income groups.
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JPMorgan Chase
China’s recent foreign ownership liberalisation has also been music to the ears of Western financial institutions. By way of example, New York’s JPMorgan Chase has bought out Chinese partner Shanghai International Trust to gain full control of its mutual fund joint venture in a deal worth a cool $1 billion (£777.6m).
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Universal Parks & Resorts
Lauching a theme park during or just after a global pandemic doesn’t seem like the best of ideas, but Universal Parks & Resorts is throwing caution to the wind by pushing ahead with its $6.5 billion (£5.1bn) theme park in Beijing. The Florida-based firm is planning to open the resort, which will include “specially created experiences designed to reflect China’s cultural heritage”, next May.
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Volkswagen
As is the case with many other leading Western companies, Volkswagen is taking advantage of looser foreign ownership regulations to up its investments in China and gain control of the firm’s interests in the country. The German carmaker has agreed to acquire a sizeable stake in Chinese electric vehicle battery-maker Guoxuan High-Tech and spent $1.1 billion (£853.5m) to take control of its joint venture with Anhui Jianghuai Automotive.
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American Express
American Express won approval from the powers that be in June to become the first foreign credit card company to operate in China. Now permitted to clear payments in yuan, the New York-headquartered corporation is partnering with Chinese financial technology firm to tap into the opportunity-packed domestic market, while US competitors MasterCard and Visa are slated to follow suit.
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Shake Shack
Western fast casual and casual dining food has legions of fans in China and the big-name chains are meeting the huge demand for foods such as burgers, pizzas and French fries by embarking on significant expansion drives in the country. American chain Shake Shack, for instance, is planning to open 55 franchised locations in mainland China by 2030.
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Popeyes
Ditto Popeyes. The American fried chicken chain is owned by US-Canadian parent Restaurant Brands International but is franchised in China by Turkish firm TAB Food Investments. The company, which also operates Burger King restaurants in the People’s Republic, has plans to launch 1,500 Popeyes location across mainland China over the next decade.
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GM
There’s little prospect of GM ever ditching China, especially after the launch of the Hong Guang MINI EV, which hit dealerships up and down the country in July. A joint venture with China’s Wuling, the budget micro electric car is proving a resounding success with Chinese motorists and selling like hot cakes due to its tiny price tag, which starts at just $4,104 (£3.2k).
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Airbus
With China poised to become the world’s largest aviation market in the very near future, Western aircraft manufacturers are eager to expand in the country. European multinational Airbus, for example, has pledged to boost assembly of its commercial jets and grow its cargo business in the Asian nation.
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Goldman Sachs
Back to Western financial institutions, New York-based investment bank Goldman Sachs has taken advantage of China’s relaxed foreign ownership regulations to increase the firm’s stake in its joint venture securities vehicle Goldman Sachs Gao Hua Securities Co. from 33% to 51%, giving the company majority ownership of the entity.
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BlackRock
New York investment bank BlackRock is pulling out all the stops as well to become a major player in the gigantic Chinese market. In August the world’s largest asset-managing business garnered approval from the China Securities Regulatory Commission to launch a wholly-owned mutual fund arm in Shanghai.
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Natura
Brazilian beauty firm Natura is itching to expand in China, even more so now that it has acquired the UK’s Avon Products. The cruelty-free company, which also owns The Body Shop and Aesop brands, is in talks with the Chinese authorities in a bid to have regulations that state that certain cosmetics and personal care products must be tested on animals relaxed.
The tech and innovations China is leading the world in
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Nu Skin Enterprises
Similarly, Utah-based personal care and dietary supplement company Nu Skin Enterprises has plans to increase its presence in the People’s Republic and recently scored an investment of $210 million (£162.9m) from a Chinese consortium to put the plans into action.
Now take a look at the big companies moving out of China
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