INTERNATIONAL firms are expanding their businesses in China despite trade tensions and supply-chain challenges from the pandemic, a HSBC Holdings Plc. survey finds.

Ninety-seven percent of surveyed firms said they intend to keep investing in China, mainly due to the country’s sizable market, expectations of continued economic growth and well-developed supply chains, according to the bank’s survey of 2,174 foreign firms. Of those, 19 percent plan to invest 25 percent or more of their operating profit in China, while another 42 percent report intended investment of between 11 percent and 25 percent of their profits.

“China overwhelmingly emerges as the most attractive destination for investment when compared with nine other major Asian economies,” according to the report.

“Despite the changing nature of international relations, it is clear that international companies will continue to find value in China-centric growth and investment strategies.”

Although there’s a perception that manufacturing firms are leaving China in favor of lower-cost markets such as India and Vietnam, the survey respondents remain firmly in favor of China. Six in 10 of the firms are either currently expanding their supply chains in China or plan to do so over the next year.

China’s commitment to achieve carbon neutrality makes expanding in the country more attractive for multinationals, with increasing business opportunities to arise from the net-zero agenda, the report said. (SD-Agencies)