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Foreign Corporations Thrive in China Amid Economic Slowdown, Bet on China’s Consumers

| Feb 05, 2016 07:19 AM EST

A McDonald's sign outside one of their restaurants in central Brussels, Belgium, Dec. 3, 2015.

While China’s economic slowdown is hurting the manufacturing sector, coffee shops, clothes stores and burger bars are among foreign businesses thriving.

Recent statements from 34 large publicly traded foreign corporations that updated investors on their China ventures reveal varied experience between sectors, according to China Daily.

Among these companies, 18 had products focused on consumers, and 13 of the firms unveiled that sales increased in the fourth quarter or full year with just three decline and two flat. Six industrial firms out of eight reported weakness in the Chinese market or failing sales.

Companies experiencing strong growth amid gradual economic expansion include coffee shop chain Starbucks, fashion group Hennes & Mauritz, Sweden-based tissue manufacturer SCA, and fast-food seller McDonald's.

Chair and CEO of Starbucks, Howard Schultz, said, "The success we are enjoying in China is really kind of highlighted by this past quarter."

Speaking on a Jan. 21 call with investors, Schultz said that Starbucks, like most foreign firms, does not break out China operating results in its accounts.

Schultz added, "We opened over 150 stores in China this past quarter, the most we've ever opened in our history."

Meanwhile, McDonald's China revealed that its fourth-quarter comparable sales surged 4 percent in China, and the company plans to open over 250 restaurants this year, which is the highest in any of its markets around the world.

Steve Easterbrook, the CEO of McDonald's, told investors on Jan. 25, "We remain confident in the potential of this important market and in the strategies we have in place to expand the brand even further."

The chief executive officer of SCA, Magnus Groth, said the rate at which China's population was transforming from being poor and rural to an urban middle class was incomparable to other emerging markets. The shift provides big opportunities for SCA's business.

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