Hurun released a special report on American companies in China in 2024, still bullish on the long-term development of the Chinese market.

On February 28, Hurun Research Institute released a special report on American companies in China in 2024. The average operating time of sample American companies in the Chinese market is 37 years, with 4 companies having a history of over a century in China, namely Otis, GE Aerospace, DuPont de Nemours, Inc., and Eli Lilly. From 2020 to 2023, the compound annual revenue growth rate of sample companies in the Chinese market was 12%, 1.3 times faster than the global market growth rate. In the 2023 fiscal year, the median revenue contribution of sample companies in the Chinese market was 15%, with 41% of companies considering China as their second largest revenue source market globally. In the consumer goods, healthcare, and energy and chemical industries, revenue growth in the Chinese market exceeded the overall level, reaching 19.4%, 16.8%, and 16.5% respectively. At the same time, the industrial sector showed a certain trend of contraction. According to data from the Ministry of Commerce, in the 45 years since the establishment of diplomatic relations between China and the US, bilateral trade volume has increased from less than $2.5 billion in 1979 to over $660 billion in 2023, an increase of more than 200 times. Over 70,000 American companies have invested in China, with annual profits exceeding $50 billion. Key findings of the report: Despite a global decline in foreign direct investment (FDI) in 2023, the foreign investment market in China has grown against the trend, with significant growth in American company investments, highlighting their confidence in the Chinese economy. Although the total revenue of these companies globally exceeded $2.5 trillion in the 2023 fiscal year, a growth of 1.1% year on year, in the Chinese market, the total revenue of sample companies exceeded $300 billion but decreased by 3.7% compared to the previous year. However, 23 companies achieved year-on-year growth. The median revenue of sample companies in the Chinese market reached $2.16 billion, with an average of $4.39 billion. There are 7 companies operating in China with revenue exceeding $10 billion, including Apple Inc., Qualcomm, Tesla, Walmart, Intel, Broadcom, and NVIDIA. Apple Inc. leads with revenue of $72.56 billion and ranks 8th in the "2024 Hurun Top 200 Foreign Investment Companies in China". The contribution of Chinese market revenue by companies remains stable and significant, with a contribution rate of 12% and above From the fiscal year 2020 to 2023, the contribution rate of the Chinese market to the selected sample companies' revenue has consistently remained at 12% and above, demonstrating its stable importance. In the 2023 fiscal year, the median contribution of the Chinese market to sample companies' revenue reached 15%, and around 41% of companies in their annual reports explicitly stated that China has become their second largest revenue source market globally, further confirming the core position of the Chinese market in the global strategic layout of enterprises. It is worth noting that NVIDIA Corporation, a leading company in the global GPU field, achieved a revenue growth rate of over 50% in the Chinese market due to the surge in key hardware demand in the Chinese artificial intelligence field. The continuous activity in the Chinese market is a key force driving the global revenue growth of American companies From 2020 to 2023, the global revenue of sample companies increased from $1.9432 trillion to $2.5312 trillion, with an average compound growth rate of 9.3%. Meanwhile, the Chinese market performance was impressive, with revenue increasing from $215.5 billion to $302.8 billion, with an average compound growth rate of 12%, approximately 1.3 times the global market growth rate. Despite the initial stage of the pandemic, 80% of companies still maintained growth. Over the past four years, the development of consumer electronics, artificial intelligence, and new energy sectors has been rapid, with companies such as Apple, Qualcomm, and NVIDIA performing particularly well in the Chinese market. In 2023, Apple Inc. saw the largest revenue increase in the Chinese market, with revenue growing by over $30 billion, making it the biggest winner. Strong growth in the consumer goods, healthcare, and energy and chemical industries in the Chinese market In terms of industry segmentation in 2023, three industries exceeded the overall growth rate in the Chinese market: the consumer goods industry with a growth rate of 19.4%, the healthcare industry with 16.8%, and the energy and chemical industry with 16.5%. The industrial sector, on the other hand, showed a certain trend of contraction. From the perspective of the contribution rate to the Chinese market, the information technology industry led the average level in the Chinese market, with a contribution rate of over 25%. Development actions of American companies in China As their businesses continue to expand, American companies have taken diversified development actions in China to enhance their stability, competitiveness, and innovation in the Chinese market. For example, Estee Lauder Companies Inc. Class A, Apple Inc., and 3M have...China Construction Research Center introduces advanced technology and management experience into China and conducts research and development innovation based on local demand; Celanese Corporation, Albemarle Corporation, and Tesla, Inc. improve market responsiveness through localized production and supply; Merck & Co., Inc., VeriSign, Inc. focus on data security and value policy and regulatory evolution; Procter & Gamble Company, Walmart Inc. integrate sustainable development concepts deeply into business; Qualcomm and Apple Inc. practice corporate social responsibility in China, especially focusing on the education sector.Hurun Rich List Chairman and Chief Research Officer Hu Run said: How to measure the performance of the Chinese market? By extending the timeline, tracking the overall revenue data of the past four years (2020 to 2023) and the first half of 2024, the conclusion is: the Chinese market is full of vitality and is a key engine driving the global revenue growth of American companies. Over the past four years, the revenue of sample companies in the Chinese market has grown from $215.5 billion to $302.8 billion, with an average compound growth rate of 12%, about 1.3 times the global market average. Benefiting from the development of the information technology industry, consumer electronics and semiconductor companies represented by Apple Inc., Tesla, Inc., Qualcomm, and NVIDIA Corporation have shown significant revenue growth in the Chinese market. In terms of revenue growth amount, in 2023, Apple Inc. had the largest revenue increase in the Chinese market, with its revenue increasing from $40.3 billion in 2020 to $72.5 billion in 2023, an increase of over $30 billion. It is worth noting that 2023 was a crucial turning point. The impact of the economic and trade frictions between China and the US has affected the sales performance of American semiconductor companies in China, and the revenue of sample semiconductor related companies in the Chinese market has declined for the first time in four years, decreasing by 6.8% year-on-year. Among them, American semiconductor companies with significant decreases in sales include Texas Instruments Incorporated (-31%), Intel Corporation (-13%), Qualcomm (-20%), and AMD (-35%). Hu Run said: Although there are views that the goal of the "Trump 2.0" era is to achieve 'industrial reshoring' to the US, the sample companies studied in this report still have a positive outlook on the long-term development of the Chinese market. Many companies are continuing to increase their presence in China, including: Apple Inc. announced plans to expand its application research laboratory in China, in addition to enhancing the capabilities of its Shanghai research center, a new application research lab will be established in Shenzhen with an estimated investment of over 1 billion yuan; 3M invested $50 million to officially launch its intelligent cutting center in its Shanghai production base in its chemical industrial zone; Celanese Corporation invested $110 million to build an LCP (liquid crystal polymer) production line in Nanjing; Albemarle Corporation invested $900 million in a lithium hydroxide lithium battery materials project in Sichuan; Tesla, Inc. invested approximately 1.45 billion yuan to build a Tesla, Inc. Shanghai energy storage super factory.