The logo of American multinational oil and gas corporation ExxonMobil is seen during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. [Photo/Agencies]

GUANGZHOU — US energy giant ExxonMobil plans to invest 10 billion yuan ($1.39 billion) in its Huizhou ethylene project in South China's Guangdong province this year.

Addressing the Guangdong Provincial High-quality Development Conference in Shenzhen recently, Jean-Marc Taton, chairman of ExxonMobil China, said ExxonMobil has already invested over 30 billion yuan in the first phase of its Huizhou ethylene project.

ExxonMobil is just one of the many foreign companies expanding investment in China.

The Ministry of Commerce said that in 2023, China's investment structure continued to be optimized, and the proportion of investment in high-tech industries reached 37.4 percent, marking a record high. Foreign investors poured capital into 53,766 newly established foreign-funded enterprises in China, a year-on-year increase of 39.7 percent.

Foreign firms are optimistic about the Chinese market, said Harley Seyedin, president of the American Chamber of Commerce in South China, adding that the potential growth of the Chinese market is the primary driver behind increasing investments in China — or shifting investments from other markets to China — followed by industrial cluster effects and preferential policies.

The majority of the 183 companies surveyed are optimistic about the growth of the Chinese market, according to a recent report released by AmCham South China.

Of these companies, 76 percent plan to reinvest in China in 2024. Of those who have plans for reinvestment in China in 2024, 45 percent state that their primary area of investment focuses on sales, marketing and business development. Other key areas include research and development, automation and productivity development.

Over half of the companies surveyed believe that their overall return on investment in China is better than their overall return on investments globally. Some 88 percent have already made profits in China, among which 46 percent reported that they have met their budget expectations. Moreover, 90 percent of US companies have achieved profitability in China, according to the report.

Although sales volume decreased slightly in 2023, the profit margin of Fluidmaster China, a US-funded sanitary ware products enterprise, increased more than expected.

David Yang, managing director at Fluidmaster China, said: "This reflects the trend of quality development, and high-end products are more competitive. We can also see that the entire market is recovering rapidly, and an increasing number of people are seeking a higher quality of life. Our goal is to achieve 5-10 percent growth this year."

Despite challenges in international economic cooperation and trade exchange, 86 percent of the companies studied claim that they will not decouple from the Chinese market due to US-China trade tensions.

In 2023, 62 percent of companies surveyed chose not to shift their investments out of China. Some 66 percent of US companies claim that they will remain committed to the Chinese market, representing the highest proportion of all businesses studied, said the AmCham South China report.

David Jacques Roumanie, Asia general manager of EuroKera (Guangzhou) Co Ltd, a US-France joint venture, feels optimistic about the Chinese market.

"We are quite representative of the economy of China somehow, because we followed the growth, we benefited from the growth until now. And I think we can replicate that in the future as well."

Guangzhou, capital of Guangdong — a major manufacturing hub in South China — has maintained its status as the top investment destination in the country for seven consecutive years, followed by Shenzhen, Shanghai and Beijing. Over half the companies polled see an improvement in the business environment in South China, an uptick of 5 percent compared with 2022, said the report.

The development of regional convergence and improvement of the business environment also provide more opportunities for foreign companies.

William Huang, managing partner at consulting firm Ernst &Young China South, said: "In April 2023, we opened a Greater Bay Area center of excellence in Qianhai focusing on technology and innovation. We hope to cooperate with enterprises and other parties in developing AI blockchain and big data technologies and supporting the companies in the unit, which will result in better development in the GBA."