Foreign firms eye China as R&D base

Foreign enterprises are increasingly turning China into a hub for research, advanced manufacturing and a key global supplier as the country's industrial upgrading, innovation capabilities and complete supply chains help them accelerate product development and strengthen their competitiveness worldwide, said business executives and market watchers.

China's ability to turn new technologies into commercial applications at speed allows foreign firms to shorten development cycles, improve efficiency and quickly bring new products to market, they said.

Seeking to keep pace with China's rapid development of humanoid robots, German industrial firm Freudenberg Group, which operates 30 plants and employs more than 7,000 people in China, has made the country a base for its humanoid robotics research and development, opening a co-creation center in Shanghai in mid-September.

Claus Moehlenkamp, Freudenberg's board chairman, said China has evolved from an industrial manufacturing powerhouse into an innovation-driven economy, giving the country a growing role in the group's global innovation and production network.

In humanoid robotics, Freudenberg plans to develop technologies and robot-related products in China — including sealing, lubrication and vibration-control components designed to improve robots' performance and service life — for both the domestic and overseas markets, drawing on the country's fast-evolving robotics ecosystem, manufacturing capabilities and supply chains.

"If we want to be successful worldwide, we have to be in China," he said, adding that the continued expansion of the robotics sector also increases demand for more scalable, reliable and stable components and technologies.

Honeywell Technologies is also tapping China's industrial ecosystem to accelerate technology development and commercialization. The United States-based industrial group opened a new China innovation center in Shanghai on Sept 1. The facility brings together its latest technologies and solutions across 12 immersive industry scenarios covering energy, smart manufacturing and infrastructure.

Yu Feng, president of Honeywell Technologies China, said the rapid adoption of advanced technologies such as artificial intelligence is driving a new wave of industrial innovation.

"The new facility will help us accelerate local innovation and better connect new technologies with industrial demand," Yu said.

These approaches are also in line with broader national priorities under the 15th Five-Year Plan (2026-30) period, which emphasizes green and low-carbon growth, industrial upgrading and the development of emerging industries.

Peng Bo, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said this shift means China is becoming more closely integrated into foreign corporations' global innovation and production strategies, rather than serving primarily as a manufacturing base or end market.

Foreign direct investment in China's high-tech industries rose 35.1 percent year-on-year to 200.26 billion yuan ($29.86 billion) in the first eight months, accounting for 41.7 percent of the country's total FDI inflows, up 12.4 percentage points from a year earlier, said the Ministry of Commerce.

Speaking at a roundtable meeting with foreign-invested companies in Beijing earlier this week, Ling Ji, vice-minister of commerce and deputy China international trade representative, said many foreign companies remain confident regarding Beijing's development prospects and continue to expand their presence in the city, with growing investment in technological innovation.

Ling said China will continue to pursue high-standard opening-up and provide greater stability and certainty for foreign companies operating in the country.

Joe Bao, president of Kone China, said China is not only a key part of the Finnish elevator maker's global manufacturing and innovation network, but also an export base serving more than 100 markets worldwide.

"Our supply chain is highly localized and deeply integrated into the Chinese ecosystem, with 99 percent of components sourced locally. This enables us to combine global quality standards with local speed, flexibility and resilience," Bao said.

zhongnan@chinadaily.com.cn