People shop at the new store of Costco in Shenzhen, south China's Guangdong Province, Jan. 12, 2024. [Photo/Xinhua]

The Chinese market remains a sweet spot to foreign businesses despite a challenging global environment and lackluster economic recovery worldwide, as the latest financial reports of many world-renowned brands have revealed.

Global catering firms are under spotlight as they have earned big on a booming Chinese service market.

Take Yum China, the operator of KFC and Pizza Hut restaurants in the country for example. Its total sales grew 6 percent year over year excluding foreign currency translation in the first quarter (Q1) of its 2024 fiscal year.

The company opened 378 net new stores in the quarter, a record for the first quarter, its earnings report showed.

Joey Wat, CEO of Yum China, commented that "We achieved solid sales growth in the first quarter with total revenues hitting an all-time high, and looking toward the future, we are absolutely confident in seizing China's vast opportunities."

Also flourishing in the Chinese market are retail giants. By the end of last year, Sam's Club had 47 stores in 25 Chinese cities, and it vowed to open six to seven stores each year in China.

At the beginning of this year, U.S. retail giant Costco Wholesale opened a new store in the city of Shenzhen, and announced it will open a membership store in Nanjing this year and venture into the gas station business there.

Many multinationals are gravitating to China's super-sized market as local consumers have shown increasingly diverse demand, and new growth drivers keep arising.

Brooks Running, a renowned running shoe brand, for instance, targets China as its new growth arena because of the Chinese consumers' growing passion for outdoor activities and sports.

With most of its revenue currently generated from the U.S., Brooks is gearing up to open its inaugural store in Shanghai this fall, marking the beginning of what it calls a long-term commitment to the Chinese market.

For auto-making heavyweights, China, despite being the world's largest auto exporter, remains a significant source of demand. According to Volkswagen's Q1 financial report, it delivered 7.7 percent more vehicles to customers in China than in the preceding year.

The BMW Group in late April announced an additional investment of 20 billion yuan (about 2.82 billion U.S. dollars) in its production base in Shenyang, the capital of northeast China's Liaoning Province.

"The planned investment underlines not only our confidence in China's long-term economic prospects, but also in the innovation capabilities of our Chinese partners," said Oliver Zipse, chairman of the Board of Management of BMW AG.

Global performance coatings giant PPG Industries said in its Q1 earnings report that it achieved year-over-year adjusted growth for the fifth consecutive quarter despite continued challenges in the macro environment worldwide.

"The company benefited from well-established businesses in Mexico and China, and looking ahead, while global industrial production remains at low absolute levels, we believe that demand in China for our products will deliver solid organic growth," said its earnings report.

China has managed to keep foreign investment relatively stable. The number of newly established foreign-invested firms in China hit 12,000 in Q1, up 20.7 percent year on year.

The growth in the number of newly established foreign firms acted as a leading indicator to support for future capital inflow, said Ji Xiaofeng, an official in charge of the Department of Foreign Investment Administration of the Ministry of Commerce.

With the continuous advancement of China's new quality productive forces and a series of policies to stabilize the economy, expand opening-up and attract foreign investment, the development conditions and environment for foreign companies in China will surely improve, Ji added.

In terms of the structure of foreign direct investment (FDI), the country's high-tech manufacturing sector attracted 12.5 percent of the FDI inflow in the first quarter, up 2.2 percentage points compared to that in the same period last year.

In this year's government work report, China has vowed to intensify efforts to attract foreign investment, including further shortening the negative list for foreign investment, abolishing all market access restrictions on foreign investment in manufacturing, and reducing market access restrictions in services sectors, such as telecommunications and healthcare.

The country will expand the Catalog of Encouraged Industries for Foreign Investment, strengthen services for foreign investors and make China a favored destination for foreign investment. It will also make it easier for foreign nationals to work, study, and travel in China and optimize payment services for them.

In a recent development of China's opening-up efforts, the country's 10 government departments jointly released a document introducing new measures to encourage overseas institutions to invest in China's domestic sci-tech enterprises.

In March, China for the first time rolled out a negative list for cross-border trade in services at the national level to boost opening up. The national-level list consists of 71 items.

According to a recent survey of over 600 foreign-funded companies done by the China Council for the Promotion of International Trade, more than 70 percent of the companies surveyed were optimistic about the development prospects of the Chinese market over the next five years, an increase of 3.8 percentage points compared with the previous quarter. 

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