The business performances of foreign-invested companies in China are particularly impressive. Those that have been operating in China are making expansion plans, while more and more foreign companies are coming to invest and settle in the Chinese market to seize growth opportunities.

Analysts on Tuesday attributed the attractiveness to China's huge market, continued opening-up policy and improved business environment.

US-based multinational pharmaceutical company MSD reported operating revenue of $6.71 billion in China in 2023, up 32 percent year-on-year, accounting for 12.5 percent of its global revenue.

German automotive supplier Bosch reported sales growth of 5.2 percent in China in 2023, totaling 139.1 billion yuan ($19.4 billion).

Apple's revenue from China accounts for about one-fifth of its total revenue.

The financial results of HSBC Holdings showed that the company made more than $1 billion in profit from the Chinese mainland in 2023.

"We remain confident in the resilience of the Chinese economy, and the growth opportunities in the Chinese mainland over the medium to long term," Noel Quinn, CEO of HSBC Holdings, said in a statement along with the release of the 2023 results.

In 2023, China was Finnish elevator maker KONE's largest single market globally. Sales from the China market accounted for 26 percent of its global sales, according to its results.

Such business performances show why foreign-funded companies are increasing their presence in the Chinese market.

As one of the latest examples, Apple announced on Tuesday that it will open a new research and development (R&D) center in Shenzhen, South China's Guangdong Province and upgrade its Shanghai R&D center to support product manufacturing.

Apple will also add a new store in downtown Shanghai on March 21, which will reportedly be the highest-standard Apple store in the Chinese mainland. It will be its 57th store in Shanghai.

Bosch on Monday won approval to start construction of the second phase of a production base for new-energy vehicle components and a self-driving R&D center in Suzhou, East China's Jiangsu Province, the Suzhou Industrial Park announced on its WeChat account on Tuesday.

Total investment for Bosch's Suzhou production and R&D base will exceed $1 billion. Phase one of the project is expected to begin trial production in September, and formal mass production will be achieved in early 2025.

Newcomers have also emerged. For example, on Monday, US fashion brand Supreme announced a plan to open its first store in China, which will be its 17th store worldwide, media reported.

The number of newly established foreign-invested enterprises in China amounted to 4,588 in January, an increase of 74.4 percent year-on-year, data from the Ministry of Commerce showed.

In 2023, 53,766 foreign-funded enterprises were newly established in China, up 39.7 percent over the previous year, according to the National Bureau of Statistics.

Analysts said that China's economy has returned to the normal track of growth, and foreign investment will stick to the country's huge market.

China's leading position in global economic growth will provide plenty of investment opportunities, Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management Co, told the Global Times on Tuesday. "China's overall industrial advantages and unchanging position in global supply chains remain attractive to foreign investors," Tian Yun, a veteran economist based in Beijing, told the Global Times on Tuesday.

For example, KONE said in its 2023 financial results that the majority of components used in the company's supply chain are sourced from external suppliers, a significant number of which are located in China.

Apart from having a huge market, growth potential and industrial advantages, analysts also noted that China has been continuously opening up its markets to foreign investment.

The business environment in the Chinese market has been continuously improved, and the market's vitality has been continuously stimulated, the analysts said.

The 2024 Government Work Report, delivered at the opening meeting of the second session of the 14th National People Congress, outlined the country's efforts to attract foreign investment. For example, all market access restrictions on foreign investment in manufacturing will be abolished, and market access restrictions in services, including telecommunications and healthcare, will be reduced.

Tian expected that China's attractiveness to overseas capital will be higher in 2024 than in the previous year.

"We believe that China will remain on a positive trajectory in the long run, and its market will continue to attract multinational corporations as well as foster new start-ups," Denis Depoux, global managing director of Roland Berger, told the Global Times in a recent interview.

China  should make full-fledged breakthroughs in the Western-strangled chip manufacturing industry, with a focus on basic materials for chip-making such as photoresists and high-purity hydrogen fluoride for which China currently relies on imports, Xie Suyuan, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and an Academician of Chinese Academy of Sciences, told the Global Times on the sidelines of a group discussion during the two sessions on Thursday.

Amid a relentless US-led crackdown against China's chip industry, the country has been mulling over an all-out effort to achieve tech self-sufficiency across key industrial chain. One, among which, is the research and development (R&D) involving advanced chipmaking technology extreme ultraviolet lithography (EUV).

"Chip production is a huge project, and the bottleneck we face largely lies in inadequate material technology," Xie said. He pointed out that although China is well recognized for its basic research level in certain materials, it still lacks adequate R&D in leading and high-end materials, being "strangled" in such fields as electronic information materials, aerospace materials, and luminescent materials.

According to Xie, improving self-sufficiency in these sectors needs inputs across the supply chain. He thus suggested that China's Ministry of Industry and Information Technology (MIIT) should properly guide relevant research institutes, companies and financial institutions to jointly set up an institute on "intermediate experiment," which he said can be pivotal in facilitating the industrialization of "groundbreaking, cutting-edged" research achievements in basic materials.

In January, China's MIIT, along with the National Development and Reform Commission, the country's top economic planner, issued guidelines promoting the innovative development of intermediate experiment in the manufacturing industry.

The "intermediate experiment" refers to a transitional test involving transferring new products in the trial phase to production process. Such test, which links up the basic research with industrial application, is particularly crucial in research result transformation of chemical, new materials and pharmaceutical industries, according to Xie.

"Without an intermediate experiment, the chance of successful industrialization is only 30 percent, while the rate could reach 80 percent after undergoing the test," he explained. He added that China's whole-nation system advantage is also helpful in speeding up the industrialization of research result.

In addition to chipmaking, a number of group discussions held on Wednesday and Thursday during the two sessions also put extensive focus on building self-sufficiency in emerging sectors such as artificial intelligence (AI) ecosystem, ranging from AI chips, domestically built large models to further industrial applications.

Guo Yufeng, a member of the CPPCC National Committee and vice general manager of Chinese chipmaker Feiteng Information Technology, said during a panel discussion on Thursday that it remains a key issue as to how China will leverage its sheer market size to fast track the innovation path. "Large-scale industrial application and application scenarios are the key in creating new quality productive forces. They are also pivotal in speeding up the technology's rapid iteration."

China's Government Work Report released on Tuesday highlighted 10 major tasks this year, and "striving to modernize the industrial system and developing new quality productive forces at a faster pace" was listed at as a key priority.

According to Xie, a foundation for China to develop "new quality productive forces" is shoring up the inputs on basic research and intermediate experiment. "This is the best way to cope with US-led decoupling and de-risking push," Xie added.

China's ultra-deep oil well broke through the 10,000-meter depth mark on Monday, after 279 days of drilling. This is China's first well to exceed a vertical depth of more than 10,000 meters. It has the record for the deepest well in Asia and also the world record for the shortest time taken to drill a 10,000-meter deep well.

It shows that China has independently overcome the bottleneck in extra-deep well drilling technology, and that its deep-earth oil and gas drilling capability and supporting technology have reached the international advanced level.

With a designed depth of 11,100 meters, the Shendi Take 1 ultra-deep well, located in the Tarim Basin in Northwest China's Xinjiang Uygur Autonomous Region, is part of China's efforts to expand domestic oil production.

The well will also be used to carry out deep-earth science exploration to examine the internal structure and evolution of the Earth, as well as oil and gas accumulation in the 10,000-meter-deep layer, China National Petroleum Corp (CNPC), the operator of the well, said in a post on its WeChat account.

The drilling started on May 30, 2023 and will continue to the designed depth of 11,100 meters, said CNPC.

The difficulty increases exponentially as the depth increases, project personnel said. The Shendi Take 1 ultra-deep well crosses 13 earth layers in the basin from top to bottom. Currently, the 12th layer has been drilled, and drill bits are drilling into rocks dating back 500 million years.

In order to hit the 10,000-meter-deep mark, China independently developed the world's first automatic drilling rig that can reach 12,000 meters. It involves technology such as 220 C ultra-high temperature drilling fluid and high temperature-resistant screws.

At the same time, various kinds of core equipment and technologies were used, with 21 breakthroughs in seven categories, and the localization rate of materials and equipment used reached 90 percent.

According to the project staff, 26 drill bits and 1,060 drill stems have been used to drill the well.In the oil drilling industry, wells that are between 4,500 and 6,000 meters deep are called deep wells. Wells that are between 6,000 and 9,000 meters deep are called super-deep wells, and those that are deeper than 9,000 meters are classified as ultra-deep wells.

At present, China's onshore deep and ultra-deep oil and gas resources account for 34 precent of the country's total oil and gas resources, and the proportion of new deep and ultra-deep oil and gas reserves is increasing year by year.

The Tarim Basin is China's largest petroliferous basin, accounting for more than 60 percent of the country's onshore ultra-deep oil and gas resources.

However, the Tarim Basin is also one of the most difficult areas to explore in China, in part because many of its reserves lie between 6,000 and 10,000 meters underground.

Therefore, technological innovations that allow for ultra-deep wells have become crucial.

In recent years, China has conducted ultra-deep well projects in the Tarim Basin and has successfully drilled more than 140 wells with a depth of more than 8,000 meters.

In 2023, CNPC's oilfields in Tarim Basin produced 19.57 million tons of ultra-deep oil and gas, ranking first in China and making the basin the largest ultra-deep oil and gas production base in the country.

China's top political advisory body started its annual session on Monday in Beijing, ushering in an important political season that will highlight new missions to steadily boost high-quality development in a bid to build the country into a great modern socialist country while injecting new impetus into global growth.

This year marks the 75th anniversary of the founding of the People's Republic of China and is a key year for achieving the goals outlined in the nation's 14th Five-Year Plan (2021-25). In this pivotal year of comprehensively deepening reform, analysts and deputies and members to the two sessions expect major measures to be announced at the key political event to further promote high-quality development and advance Chinese modernization.

Observers projected that China's high-quality development in 2024 and medium to long term will be driven by new quality productive forces such as artificial intelligence (AI), digital economy and other innovation industries. With continuous improvement in economic structure, strong economic development momentum and sound development trend, the Chinese economy will remain a promising destination for foreign investment and a major engine driving global growth.

New productive forces
At the 11th group study session of the Political Bureau of the Communist Party of China (CPC) Central Committee held on January 31, 2024, Xi Jinping, general secretary of the CPC Central Committee, said that developing new quality productive forces is an endogenous requirement and a pivot for high-quality development.

Sci-tech innovation has become an important driving force for China's development. Recently, the term "new productive force" has become a key word for central and local governments in their arrangement of economic work, and is also an area that national legislators and political advisors are expected to provide suggestions for during the ongoing two sessions.

"New quality productive forces represent advanced productivity and is an important direction of China's development. The vigorous development of new quality productive forces will eventually help achieve high-quality development in China," Yu Miaojie, president of Liaoning University and a deputy to the 14th National People's Congress (NPC), told the Global Times on Monday.

In order to boost the development of new productive forces, China should further increase investment in original innovations and basic research, Yu said. In 2022, the country's investment in basic research accounted for 6.57 percent of the total research and development (R&D) spending, and the share should further climb to 7 percent or even 10 percent by the end of 14th Five-Year Plan period (in 2025), he said.

The development of new quality productive forces is currently picking up speed in China. Along with advances in the new technological revolution and industrial transformation, data, computing power and AI have become new drivers of new productive forces.

Yang Jie, chairman of China Mobile and a member of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC), suggested that the country boost the "AI+" campaign at the national level by strengthening top-level design and clarifying development goals and key tasks, in order to give full play to the huge potential of AI in achieving leapfrog development of technologies, industrial upgrade and productivity.

Comprised of AI and the manufacturing sector, smart manufacturing is an important part of new productive forces. However, China's smart manufacturing faces three major problems: Supply capability needs to be strengthened, application needs to be promoted and a standard system needs to be established, said Zhong Zheng, an NPC deputy and vice president of the Midea Group.

She suggested that the country support leading companies in various industries to take the lead in developing industry solutions so as to help more companies set up world-leading smart factories that contribute to sustained development.

While new quality productive forces are important to the world's second-largest economy, private enterprises also need to earnestly enhance their own productivity and boost transformation surrounding sci-tech innovations, Wang Junjin, a member of the 14th National Committee of the CPPCC and chairman of Shanghai Junyao (Group) Co, told the Global Times on Monday.

Wang said that efforts should also be made to inject momentum into the country's burgeoning consumption sector, for example by building new business models and new spending scenarios in order to drive the high-quality development of China's economy.

Vibrant economy
China's economy grew by 5.2 percent year-on-year in 2023, contributing to more than 30 percent of the world's economic growth. More importantly, steady progress was made in pursuing high-quality development last year, with consumption playing a larger part in driving growth, tech innovations making breakthroughs and new momentum accumulating.

The Chinese economy kicked off 2024 with a robust display of economic resilience and vitality. For example, China saw 474 million domestic tourist trips during the eight-day Spring Festival holidays that ended on February 17, up 34.3 percent year-on-year. China's box office revenue during the same holiday season reached 8 billion yuan ($1.1 billion), setting a new record for the period.

"Overall, China's development is seeing more favorable conditions than unfavorable ones, and the overall trend of China's economic recovery and long-term improvement remains unchanged. We have plenty of confidence in that," Lou Qinjian, spokesperson for the second session of the 14th NPC, said at a press conference on Monday, one day ahead of the opening of its annual session.

It is widely expected that policymakers will set a GDP target of around 5 percent for 2024 in the Government Work Report to be delivered by Chinese Premier Li Qiang on Tuesday, which will greatly boost market confidence and gather strength for the high-quality development of the economy.

The two sessions are a timely and clear response to certain pessimistic voices on the Chinese economy, mainly from Western countries, Han Baojiang, a member of the 14th National Committee of the CPPCC, told the Global Times.

"Chinese policymakers are sober and their approach to economic development - as shown by the Central Economic Work Conference and the Government Work Report set to be delivered on Tuesday - is very clear," Han said. "To put it simply, improving our economy, enhancing people's livelihoods, and ensuring stable employment may be the most effective way to deal with all those challenges."

Foreign chambers of commerce and companies operating in China have also shown confidence in the prospects of the Chinese economy, eyeing greater opportunities from Chinese modernization.

"China remains an important market for our member companies," Juha Tuominen, chairman of FinnCham Beijing, told the Global Times, saying that the chamber's latest surveys showed that Finnish companies are positive about Chinese market potential.

Although the Chinese economy faces challenges such as weak consumption, a property market downturn and weak export momentum, the Chinese government has drawn up the appropriate policies. It's hoped that there will be an improvement after this year's two sessions, and Panasonic will strengthen local operations to deal with market changes, Tetsuro Homma, executive vice president of Panasonic Corporation, told the Global Times.

"China is the most important technology and supply chain base for Panasonic… We will closely follow topics such as healthcare, smart manufacturing and green development during the two sessions and are seeking opportunities in other key areas as well," Homma said.

Editor's Note:
While China's economy is undergoing a crucial transformation and upgrade amid the current complex international environment, Western propaganda machines persist in attempting to undermine China's economic progress by creating biased and inaccurate narratives. To counter these false claims, the Global Times is publishing a series of articles that unveil the reality of China's consistent economic development.

Since the start of reform and opening-up, there have been several waves of talking down the prospects of the Chinese economy in the international public opinion arena. Looking back, it is evident that those arguments were all incorrect.

When China's economic development encountered challenges during the late 1980s and early 1990s, the international community was abuzz with discussions regarding the potential "collapse of the Chinese economy." However, with China setting the objective of reforming the socialist market economy system, the economy has sustained rapid growth. From 1991 to 1995, the GDP experienced an average annual growth rate of 12.3 percent.

During the period of 1997 to 2001, as China's economic landscape underwent transformations, a resurgence of the theory of "China's economic collapse" was put forth by some foreign economists. However, the reality is that, through deepening reforms, expanding openness, and macroeconomic policy adjustments, China not only withstood the impact of financial crises, preventing a decline in economic growth, but also entered a period of rapid economic growth after 2000. From 2001 to 2005, China's average annual GDP growth rate was 9.8 percent.

Since 2007, China's economy has been under pressure due to the effects of the international financial crisis. Some foreign scholars have expressed concern about a potential decline in the Chinese economy. For instance, Nobel laureate in economics Paul Krugman wrote an article in The New York Times entitled "Will China break?" In fact, the Chinese government effectively mitigated the impact of the international financial crisis by implementing proactive fiscal policies and moderately easy monetary policies, enabling the economy to maintain stable and rapid growth. In 2010, China's GDP exceeded 40 trillion yuan ($5.6 trillion), solidifying its position as the world's second-largest economy and the largest manufacturing nation.

After 2010, with changes in economic development conditions such as the cost increase of China's labor force, coupled with the lingering impacts of the international financial crisis and the subsequent European sovereign debt crisis, China's economic development entered a new normal. There were once again voices predicting a downturn in the Chinese economy, suggesting that it would face stagnation or even an economic crisis. The fact is that China has promptly implemented measures such as supply-side structural reform, which has helped stabilize and boost the economy, leading to high-quality economic development.

Western cognitive biases
Those who consistently predict the decline of the Chinese economy repeatedly make mistakes because they have cognitive biases and misconceptions about the strong resilience and development principles of the Chinese economy.

First, Western doomsayers simply use Western economic theories to analyze and judge the development prospects of the Chinese economy. Western economic theories, which are developed through analyzing the development experiences of developed Western countries, should not be simply replicated in developing countries, especially in large economies like China that are undergoing economic transformation.

Historical experience has consistently demonstrated that developing nations, when blindly adopting Western economic theories without taking into account their unique national circumstances, have failed to achieve economic development success. Instead, they have often encountered economic stagnation and political unrest.

China has steadfastly followed the path of socialism with Chinese characteristics, implementing reforms toward a socialist market economy and driving Chinese modernization. These efforts have led to notable achievements that have garnered global recognition, showcasing a promising outlook for the great rejuvenation of the Chinese nation.

Second, Western critics have tended to exaggerate short-term and localized challenges, overlooking the resilience of China's economic growth. It is essential to consider both short-term and long-term perspectives when evaluating the economic landscape, rather than fixating on isolated issues. Excessively amplifying short-term or local problems and risks within the Chinese economy is not warranted.

Upon reflection, it is evident that many of the challenges perceived to have a substantial impact on the Chinese economy in the past were not as severe as initially anticipated. This can be attributed to China's status as a major economy, as well as the distinctive advantages of the socialism with Chinese characteristics in effectively addressing the risks and challenges.

Moreover, China's economic development continues to show an upward trajectory, indicating its resilience and capacity to weather shocks with self-stabilizing and self-repairing mechanisms. Although short-term adjustments may be necessary in response to challenges, China has demonstrated its ability to explore new pathways for development.

Third, the negative portrayals of China's economy from the Western media lack clear evidence. Instead, they are rife with biased, ill-intentioned and narrow-minded misinterpretations. Analyzing and studying China's economy necessitates the integration of economic principles with China's specific national circumstances and stage of development. However, some pessimists lack a comprehensive and in-depth research on the Chinese economy, with certain scholars seldom visiting China. There are individuals who even engage in negative commentary to attract attention, and some exploit China slander for financial gain in the capital market.

Positive trajectory unchanged
At present, China's economy is entering in a crucial phase of transition toward high-quality development. Throughout this process, it is bound to face a range of issues and challenges. Nevertheless, China's economic progress remains steadfast. It is bolstered by confidence, advantages, and opportunities, ensuring that its enduring positive trajectory remains unchanged.

First, the foundation of China's economic development remains stable, with new growth drivers emerging and expanding. The country has amassed significant material and technological resources, and its vast domestic market demand serves as a robust pillar for sustaining steady economic growth and navigating through various risks and challenges.
In terms of scientific and technological innovation, despite certain countries intensifying efforts to restrict China's high-tech industries and advocate for "decoupling and disrupting industrial chains," it is impossible for them to impede the progress of China's scientific and technological advancements and industrial upgrades.

Second, China has outstanding comprehensive advantages in human resources, capital, infrastructure and industrial systems, and has huge economic development potential. Although major changes in the total population size and structure will have a certain impact on economic growth, it should be noted that compared with population size, the key factor affecting medium- and long-term economic growth is educating level of labor force. In 2023, China's working-age population aged 16-59 stayed at 865 million, of which more than 240 million received higher education.

From an investment perspective, China's savings rate still remains at a high level, with great investment potential. In addition, after years of development, China has formed a relatively complete and ultra-large-scale infrastructure network. The comprehensive transportation network, power generation installed capacity, power grid, 5G network and other scales all rank first in the world. At the same time, it has built a large-scale, and complete industrial system.

Third, facing new strategic opportunities, there is broad space for the development of new industrialization and new urbanization. The rapid development of a new round of scientific and technological revolution and industrial transformation has brought new opportunities. At present, a new round of scientific and technological revolution and industrial transformation represented by artificial intelligence, life sciences, new energy have entered a period of breakthrough development. Digital, intelligent, and green transformation are advancing at speed, which will enable China to leverage its advantages and improve total factor productivity and promote high-quality economic development.

Admittedly, China's economic development still faces new challenges. Yet, these challenges are inherent to the developmental process and are akin to the "growing pains" experienced during advancement. Despite this, the overall trajectory and momentum of economic development remain steadfast. Historical evidence and present circumstances demonstrate that China's economy has consistently thrived amid adversity. The robust external pressures being exerted will undoubtedly serve as a catalyst for driving China's economic growth.

American companies in China have recognized the improvement in China's economy and the continuous improvement of the business environment, which reflects the confidence of those investing in China and deepening their roots here, China's Ministry of Commerce (MOFCOM) spokesperson He Yadong said at a regular press conference on Thursday, referring to the results of the latest report from the American Chamber of Commerce in China (AmCham China).

About half of US companies surveyed view China as a top three global priority despite challenges such as tense China-US relations, the AmCham in Beijing said on February 1.

Specifically, this year, 50 percent of AmCham China members consider China a top three investment priority, up 5 percentage points on a yearly basis. The majority of US companies will continue their presence in China, with 77 percent saying that they have no plan to transfer production or procurement out of China, the chamber said on its website.

Almost all the US companies surveyed said that China-US relations are important, and nearly 30 percent expect bilateral relations to improve in 2024, according to the report.

In responding to media inquiries for comment on the report, the MOFCOM spokesperson said that the results of the corresponding report are another example of China remaining a prime destination for global investment.

At the same time, the ministry also notes that American companies in China have considered the "tense China-US relations" as the biggest operational challenge for four consecutive years, which precisely reflects the eager anticipation of the business community for stable development in the bilateral relations, He said.

China is willing to work with the US to earnestly implement the important consensus reached by the leaders of the two countries, fully leverage the role of multi-level communication mechanisms between the Chinese and American commerce departments, the spokesperson said.

Also, China is willing to promote mutually beneficial cooperation with the US, effectively manage differences, and create a favorable environment for pragmatic cooperation between the business communities of the two countries, He said.

China-US relations have achieved positive outcomes amid the intensive business interactions over the recent past. This week, a US Chamber of Commerce delegation led by the chamber's President and CEO Suzanne Clark visited China, and they are meeting with senior Chinese government officials and local business leaders.

China and the US are continuing to step up engagement, which analysts said would provide much-needed confidence for businesses in both countries and the international community amid increasing global challenges.

The pressure on Apple to reorganize its products structure and find more and stronger business avenues is on, ever since Microsoft has topped Apple about one month ago to become the most valuable public company in the world. The competition between the two major tech titans is expected to persist in the coming two to three years, if not longer.

Now, generative artificial intelligence (AI) is churning the seas and making big waves after OpenAI launched the newest ChatGPT bot "Sora" which is able to make vivid and utterly realistic clips of video streams if fed with descriptive texts. Deemed as the next transformative technology that may be capable to reshape our work and life, AI innovation and development is currently on the top agenda of both Apple and Microsoft.

And on Tuesday, Apple's Chief Operating Officer Jeff Williams affirmed that the company is winding down its decade-old endeavor to build an electric vehicle, abandoning one of the most ambitious projects in the company's history. Many employees working on the EV project reportedly will be shifted to Apple's AI project group. Obviously, AI innovation is a key priority of the company and Apple cannot take it for granted.

AI is presumably the next big thing for the world's corporate giants, as joggling for achieving an AI edge has already started. Microsoft, a major stakeholder of OpenAI, seems to be leading in generative AI development and usage. Microsoft has invested billions of dollars in OpenAI and spent the whole of last year racing to push its AI solutions into every product the company offers, which many watchers claim will enable Microsoft to cash in on what they see as its lead in AI.

Apple does not want to fall behind in AI innovation. Apple CEO Tim Cook told investors earlier this month that it has been working on generative AI and was planning to announce some progress later in 2024. "We've got some things that we're incredibly excited about that we'll be talking about later this year," he said on a call with industry analysts.

The decision to shut down its high-profile EV bid is a bombshell for many, which effectively ended a multibillion-dollar effort named Project Titan which would have vaulted the company into a whole new industry. Apple started working on its EV program about 10 years ago, eyeing on a fully autonomous electric car with voice-guided navigation, but the project stumbled and struggled from the start, causing investors to be increasingly concerned with the eventual birth of a car.

But Apple continues to spend heavily in new technology advances. It spent a total of $113 billion on research and development during the past five years, with an average annual growth rate of 16 percent, one of the highest among major tech companies in the world. For instance, Apple last year launched the popular Vision Pro headset.

But Microsoft has moved from "talking about AI to applying AI at scale," according to its chief executive Satya Nadella. The company's more than $3 trillion market valuation is significantly supported by its lead in AI innovation and its flagship cloud computing product called Azure. In the just concluded quarter ending December, the company netted revenue totaling $62 billion, growing 18 percent from a year earlier. Its profit reached $21.9 billion, up 33 percent. Microsoft's cloud offerings brought in $33.7 billion business, just behind Amazon.

Microsoft vowed to invest tens of billions more in building more data centers for AI and cloud computing. Corporate customers have just started trying Microsoft's Copilot offering, which integrates newest AI tools into its cloud productivity programs including Word, Excel and Teams. The improvements have become widely available at the end of last year and cost about $30 per user per month, which is able to create new streams of revenue for Microsoft.

Years ago, Microsoft trailed in market capitalization as its stock price lacked luster after the company acquired Nokia's mobile phone business, which ultimately failed as it could not compete with smartphone giants like Apple and a slew of Chinese phone makers. But Microsoft again places its focus on software development, cloud computing and AI innovation, which eventually pays off and leads to steadily rising stock prices and becomes a darling at Wall Street.

Sci-fi novels and films like Gattaca no longer have a monopoly on genetically engineered humans. Real research scripts about editing the human genome are now appearing in scientific and medical journals. But the reviews are mixed.

In Gattaca, nearly everyone was genetically altered, their DNA adjusted to prevent disease, enhance intelligence and make them look good. Today, only people treated with gene therapy have genetically engineered DNA. But powerful new gene editing tools could expand the scope of DNA alteration, forever changing humans’ genetic destiny.

Not everyone thinks scientists should wield that power. Kindling the debate is a report by scientists from Sun Yat-sen University in Guangzhou, China, who have edited a gene in fertilized human eggs, called zygotes. The team used new gene editing technology known as the CRISPR/Cas9 system. That technology can precisely snip out a disease-causing mutation and replace it with healthy DNA. CRISPR/Cas9 has edited DNA in stem cells and cancer cells in humans. Researchers have also deployed the molecules to engineer other animals, including mice and monkeys (SN Online: 3/31/14; SN: 3/8/14, p. 7). But it had never before been used to alter human embryos.
The team’s results, reported April 18 in Protein & Cell, sparked a flurry of headlines because their experiment modified human germline tissue (SN Online: 4/23/15). While most people think it is all right to fix faulty genes in mature body, or somatic, cells, tinkering with the germ line — eggs, sperm or tissues that produce those reproductive cells — crosses an ethical line for many. Germline changes can be passed on to future generations, and critics worry that allowing genetic engineering to correct diseases in germline tissues could pave the way for creating designer babies or other abuses that will persist forever.

“How do you draw a clear, meaningful line between therapy and enhancement?” ponders Marcy Darnovsky, executive director of the Center for Genetics and Society in Berkeley, Calif. About 40 countries ban or restrict such inherited DNA modifications.

Rumors about human germline editing experiments prompted scientists to gather in January in Napa, Calif. Discussions there led two groups to publish recommendations. One group, reporting March 26 in Nature, called for scientists to “agree not to modify the DNA of human reproductive cells,” including the nonviable zygotes used in the Chinese study. A second group, writing in Science April 3, called for a moratorium on the clinical use of human germline engineering, but stopped short of saying the technology shouldn’t be used in research. Those researchers say that while CRISPR technology is still too primitive for safe use in patients, further research is needed to improve it. But those publishing in Nature disagreed.

“Are there ever any therapeutic uses that would demand … modification of the human germ line? We don’t think there are any,” says Edward Lanphier, president of Sangamo BioSciences in Richmond, Calif. “Modifying the germ line is crossing the line that most countries on our planet have said is never appropriate to cross.”

If germline editing is never going to be allowed, there is no reason to conduct research using human embryos or reproductive cells, he says. Sangamo BioSciences is developing gene editing tools for use in somatic cells, an approach that germline editing might render unneeded. Lanphier denies that financial interests play a role in his objection to germline editing.

Other researchers, including Harvard University geneticist George Church, think germline editing may well be the only solution for some people with rare, inherited diseases. “What people want is safety and efficacy,” says Church. “If you ban experiments aimed at improving safety and efficacy, we’ll never get there.”

The zygote experiments certainly demonstrate that CRISPR technology is not ready for daily use yet. The researchers attempted to edit the beta globin, or HBB, gene. Mutations in that gene cause the inherited blood disorder beta-thalassemia. CRISPR/Cas9 molecules were engineered to seek out HBB and cut it where a piece of single-stranded DNA could heal the breach, creating a copy of the gene without mutations. That strategy succeeded in only four of the 86 embryos that the researchers attempted to edit. Those edited embryos contained a mix of cells, some with the gene edited and some without.

In an additional seven embryos, the HBB gene cut was repaired using the nearby HBD gene instead of the single-stranded DNA. The researchers also found that the molecular scissors snipped other genes that the researchers never intended to touch.

“Taken together, our work highlights the pressing need to further improve the fidelity and specificity of the CRISPR/Cas9 platform, a prerequisite for any clinical applications,” the researchers wrote.

The Chinese researchers crossed no ethical lines, Church contends. “They tried to dot i’s and cross t’s on the ethical questions.” The zygotes could not develop into a person, for instance: They had three sets of chromosomes, having been fertilized by two sperm in lab dishes.

Viable or not, germline cells should be off limits, says Darnovsky. She opposes all types of human germline modification, including a procedure approved in the United Kingdom in February for preventing mitochondrial diseases. The U.K. prohibits all other germline editing.

Mitochondria, the power plants that churn out energy in a cell, each carry a circle of DNA containing genes necessary for the organelle’s function. Mothers pass mitochondria on to their offspring through the egg. About one in 5,000 babies worldwide are born with mitochondrial DNA mutations that cause disease, particularly in energy-greedy organs such as the muscles, heart and brain.

Such diseases could be circumvented with a germline editing method known as mitochondrial replacement therapy (SN: 11/17/12, p. 5). In a procedure pioneered by scientists at Oregon Health & Science University, researchers first pluck the nucleus, where the bulk of genetic instructions for making a person are stored, out of the egg of a woman who carries mutant mitochondria. That nucleus is then inserted into a donor egg containing healthy mitochondria. The transfer would produce a person with three parents; most of their genes inherited from the mother and father, with mitochondrial DNA from the anonymous donor. The first babies produced through that technology could be born in the U.K. next year.

Yet another new gene-editing technique could eliminate the need to use donor eggs by specifically destroying only disease-carrying mitochondria, researchers from the Salk Institute for Biological Studies in La Jolla, Calif., reported April 23 in Cell (SN Online: 4/23/15).

Such unproven technologies shouldn’t be attempted when alternatives already exist, Darnovsky says, such as screening embryos created through in vitro fertilization and discarding those likely to develop the disease.

But banning genome-altering technology could leave people with genetic diseases, and society in general, in the lurch, says molecular biologist Matthew Porteus of Stanford University.

“There is no benefit in my mind of having a child born with a devastating genetic disease,” he says.

Alternatives to germline editing come with their own ethical quandaries, he says. Gene testing of embryos may require creating a dozen or more embryos before finding one that doesn’t carry the disease. The rest of the embryos would be destroyed. Many people find that prospect ethically questionable.

But that doesn’t argue for sliding into Gattaca territory, where genetic modification becomes mandatory. “If we get there,” says Porteus, “we’ve really screwed up.”