(Yicai) May 31 -- Deloitte is seeing multinational corporations focus on the new growth momentum in China as a cyclical recovery gets underway in the country, according to the chief executive of the British accounting firm’s Chinese business.

The economic recovery is “supported by the government's unwavering commitments and concrete actions to drive high-quality growth,” Patrick Tsang said in an interview yesterday during the inaugural MNC Future Summit in Shanghai. 

“We will continue to invest in China and build capabilities to support MNCs more effectively by helping them formulate new strategies that drive success, navigate challenges with innovation, and enhance enterprise resilience,” he said.

China accounts for 20 to 30 percent of revenues at multinationals, Deloitte noted at the forum themed New Stage, New Opportunity, New Strategy. The country is also a hub for developing infrastructure, technology, and sector-specific innovations, which are instrumental in fostering the growth of MNCs in the Chinese and global markets, it added.

“China, as the world's second-largest economy and number one trading partner of more than 120 countries, remains fundamentally connected to the rest of the world,” noted David Hill, CEO of Deloitte Asia Pacific. “With a middle class projected to double from 400 to 800 million in the next decade, China represents a market too big to ignore for MNCs around the world.

“Deloitte Asia Pacific is committed to helping multinational firms realize their growth ambitions in China,” Hill pointed out. 

“There’s a great expression that water always finds the lowest level,” Hill said. The competitiveness of the Chinese supply chain is a real and significant strength, he noted, adding that Chinese society has fully embraced the digital economy, such as digital payments and marketing.

“If you think about things like AIGC, which is the conversation on everyone's lips, you're in China,” he pointed out.

China also has an extraordinary strength in access to talent, mainly engineers and scientists, which is required in the new economy, according to Hill, noting that there are 10 times more science graduates in China than in Japan.

Forty-two percent of the world's green economy workers are from China or are based there, with 40 percent of hydrogen electrolyzers, 60 percent of wind turbines, and 80 percent of solar panels made in the country, Hill said, adding that that this is an enormous opportunity. 

“Forty percent of China's growth last year came from the green economy,” he said. “That's an amazing statistic.”

There has been a recent resurgence of highly successful joint ventures, as numerous MNCs strive to establish their presence in China under their ownership, Hill noted. GE Healthcare and China National Pharmaceutical, also known as Sinopharm, and L'Oreal and Magic Holdings set up JVs where the multinational holds a minority stake, he pointed out.

“This model is likely to become more prevalent, reflecting the essence of China's approach -- its unique style, rapid pace, and cost-efficiency,” he added.

According to Hill, behind the shift lies the rapid rise of Chinese companies whose quality and competitiveness have strengthened significantly since around 1990.

Succeeding in China as a multinational firm is about adapting to the country's cost, style, and speed, Hill noted. “China is obviously an incredibly digitally advanced and enabled society, the style and presentation of products, particularly for the consumer, must be represented in a way that's appealing to the Chinese consumer,” he said.

Editor: Martin Kadiev