This undated file photo shows the Huizhou Daya Bay Petrochemical Industrial Park where the Huizhou Phase III Ethylene Project and the Polycarbonate Project are located, in Huizhou, south China's Guangdong Province. [Photo/Xinhua]

The American Chamber of Commerce in South China (AmCham South China) released on Wednesday its 2025 Special Report on the State of Business in South China, which highlighted that the world's second-largest economy continues to be an attractive investment destination.

This year's report, the 21st in the series, provides a comprehensive and quantitative analysis of the business community, offering valuable insights into development trends in South China. A total of 316 companies participated in the latest survey in 2024.

The report highlights China's leading position in global investment priorities, with 58 percent of foreign companies surveyed ranking it among their top three investment priorities. Looking ahead to 2025, 76 percent of the companies intend to reinvest in China, with a notable 74 percent of the American companies planning reinvestments, up 11 percentage points year on year.

The surveyed companies are mainly from the U.S., China, and the European Union. More than half of them are wholly foreign-owned, and over 30 percent American-invested. The proportion of companies that generated over 60 percent of their global revenue from China increased by 5 percentage points, reaching a total of 31 percent, said the report.

Growth potential of the Chinese market continues to be the primary driver for increasing investments in China or shifting investments from other markets to China, followed by the industrial cluster effect and preferential policies, according to Harley Seyedin, Chairman and President of AmCham South China.

In 2024, China's GDP reached a record 134.91 trillion yuan (about 18.81 trillion U.S. dollars), marking a 5-percent year-on-year increase. This robust economic performance continues to attract global investors. Additionally, the ongoing policy incentives from China have also boosted the confidence of foreign enterprises.

For instance, China's National Development and Reform Commission and Ministry of Commerce jointly issued the 2024 version of the negative list for foreign investment access on Sept. 8, 2024, announcing the removal of all restrictions on foreign investment in the manufacturing sector.

This move is viewed favorably by a substantial proportion of the companies surveyed, with some optimistic that the policy will create greater investment opportunities and broader market access, thereby facilitating expansion and growth.

It is estimated that the member companies of AmCham South China have set aside a total of 14.59 billion U.S. dollars from their profits in China for reinvestment over the next three to five years. This will be used to expand existing operations and capture additional market share, representing a 33.18-percent increase compared to the previous reinvestment figure.

"Businesses are increasing their commitments in China to secure a stronger foothold in this critical market. The reinvestment surge signals confidence in China's future, and their hope for U.S.-China increased cooperation," Seyedin said.