Speeda recently released the Economic Analysis Report 2024 Q3, providing an in-depth analysis of China's economic performance in the "mid-term exam." Besides reviewing China's current economic situation through data changes, how should foreign enterprises in China quickly grasp the future trends of China's economy based on important events and relevant policies and define their China business's position in their global strategy?
On July 31st, Speeda held a related seminar, and we've compiled the key points from the event to share with you. We hope this information provides valuable insights. If you'd like to view the seminar playback, please scan the QR code below.
Webinar Recording & Related Reports
▶Webinar Recording
▶Economic Analysis Report 2024 Q3_Speeda China
▶Multinational Manufactures Should Refocus on China_Oliver Wyman
Scan The QR Code to Apply Now
Speeda China Webinar
MNCs in China: Define China Operations in Global Strategy
Shuko Anzai
Regional Head of East Asia & Speeda China CEO, Uzabase
Junyi Zhang
Partner at Oliver Wyman
Head of Automotive Practice in Greater China
Global Economic Overview and Key Events
On 15 July 2024, China's National Bureau of Statistics (NBS) released economic data for the first half of the year, with GDP up 5% year-on-year. Despite positive GDP growth, challenges persist in the local market, particularly in auto sales. Exports remain strong, but issues like EU tariffs on Chinese cars present obstacles. Chinese OEMs are exploring global manufacturing strategies, including CKD and SKD.
China's Quarterly GDP Growth &
the Performance of the Troika
Data source: National Bureau of Statistics, mapped by Speeda
From Speeda Original Report Economic Analysis Report 2024 Q3
The US Presidential Election may influence global trade dynamics, prompting companies to consider international expansion as a strategic adaption.
Foreign companies in China face challenges, especially in the automotive sector. The shift from traditional to new energy vehicles is evident, with heightened market competition and a focus on quality.
Overall foreign investment in China is declining, though Germany is increasing its investment. Japanese companies are mixed, with some scaling back while others, like Toyota, see strong performance.
The competitive landscape is intensifying, with a growing emphasis on quality. The market is becoming more selective, and only a few companies are likely to thrive in this environment.
Strategies and Challenges for Multinational Corporations
MNCs in China are taking various approaches—some are downsizing, some are adopting a "China for China" strategy, and others are increasing investment or adopting a "China for Global" approach.
The environment is challenging, especially in industries like automotive, seeing shifts in investment focus due to market changes and challenges in the EV sector. Companies are gathering information to navigate the coming years.
China's NEV Export and Sales Share
Data Source: CAAM
From Speeda Original ReportNEV Sector M&A Analysis Report 2024 Q2
Each industry is seeing its own set of challenges. For instance, changes in US tariffs have affected exports from China, leading Japanese companies to explore alternative manufacturing locations. Some firms have had to adjust operations due to policy changes.
Despite challenges, some companies continue to leverage China's supply chain for global operations, recognizing the advantages of Chinese manufacturing.
While China remains an attractive market, it presents challenges, including the need to align with local market demands and the pressures of "involution" (内卷), where companies face constant price reductions. Companies focused on profitability may consider exiting, while others seeking market share may stay and collaborate, especially European firms partnering with Chinese counterparts to expand globally.
Risk and Opportunity Landscape for Foreign Companies in China
MNCs in China face intense competition from local companies, particularly in talent acquisition, as many skilled individuals prefer working for local firms. MNCs must highlight their competitive edge to succeed.
Despite challenges, the Chinese market offers significant benefits, including access to a large talent pool and advanced supply chain capabilities. MNCs should leverage these strengths for global expansion. While local companies may make quicker decisions and better cater to local needs, MNCs can differentiate themselves by bringing global expertise and branding to China.
As Chinese companies continue to expand globally, maintaining a strong presence in China is crucial for multinational corporations (MNCs) to understand and effectively compete with these emerging global players.
China market can be regarded as the best 'fitness Center'lf we give it up, we will inevitably lose ground on the global market. Therefore, continuing to invest inbusiness in China is a must to remain competitive globally.
—— From Oliver Wyman's Report Multinational Manufactures Should Refocus on China
Therefore, staying engaged in the Chinese market is essential for staying informed and prepared for future global competition.
Webinar Recording & Related Reports
▶Webinar Recording
▶Economic Analysis Report 2024 Q3_Speeda China
▶Multinational Manufactures Should Refocus on China_Oliver Wyman
Scan The QR Code to Apply Now
Speeda China Webinar
思必达Speeda
Accelerate Business Agility
Speeda SaaS intelligence platform helps multinational corporations to conduct efficient research, make agile decisions and seize business opportunities during China's economic transformation, by providing timely, organized and suggestive data & information.