The year 2025 is shaping up to become a big year for some foreign companies in China. German industrial and consumer goods group Henkel's new plant, with a total investment of CNY900 million is set to begin test production in Yantai, Shandong province, later this year. The facility is expected to raise the company’s production capacity to supply high-end adhesives for industries such as electronics and automobiles. “We are also planning to launch our new inspiration center for adhesive technologies in Shanghai this year, boosting our innovation capabilities for industrial businesses across China and the broader Asia-Pacific region,” said Anna An, President for the China business at Henkel. “The tone-setting Central Economic Work Conference held in December emphasized technological innovation and the promotion of consumption, creating significant opportunities for multinational companies like Henkel,” she added.
Echoing that sentiment, Nathan Stoner, Vice President of Cummins, a U.S. engine manufacturer, said his company aims to increase its market share in key application sectors in China, including power generation equipment for data centers, high-tech manufacturing, and the engineering, procurement and construction sectors this year. Highlighting that the company’s hydrogen fuel cell products successfully powered 239 transit buses and trucks, and the accumulated mileage of over 16 million kilometers across China in 2024, Stoner, who is also Chairman of Cummins China, said the company will continue to innovate on the internal combustion engine system, including high efficiency diesel, natural gas and hydrogen internal combustion engines in China this year. “We are targeting our investments in zero-emission solutions into various Chinese regional markets where we see demand and adoption happening sooner, and iterating those products to be the best they can be, when customers want more of them,” he added.
These examples highlight the growing optimism among multinational corporations regarding the long-term potential of the Chinese market, fueled by the country’s economic resilience and its commitment to innovation and openness. Initially, foreign companies were attracted by China’s cost advantages and abundant labor force, using it as a base for producing competitive goods, said Xu Wei, Dean of the Macro-economic Research Department at the Development Research Center of the State Council. As China advanced its infrastructure and industrial systems, it remained a low-cost production hub while evolving to offer sophisticated, high-value manufacturing, allowing foreign companies to integrate more advanced production processes, Xu said. “With China entering a new era of green and innovation-driven growth in recent years, global investments have increasingly focused on supply chain optimization, high-end manufacturing, customized innovation, and digital and green solutions,” he said.
China has been revising its sector list to attract more foreign investment. These efforts, along with the removal of all market access restrictions for foreign investors in the manufacturing sector last year, reflect the country’s proactive approach to openness. Li Yongjie, Deputy International Trade Representative of the Ministry of Commerce, said China will further open up its services sector, with a particular focus on accelerating pilot programs in key areas such as telecommunications, healthcare and education. A total of 59,080 new foreign-invested firms were established across China in 2024, an increase of 9.9% year-on-year, according to the Ministry of Commerce.
Wang Xiaohong, Researcher at the China Center for International Economic Exchanges in Beijing, said that China’s ongoing commitment to further opening-up and fostering innovation is positioning the country as both a key player in global supply chains, and a prime destination for investment and strategic expansion. This evolving environment is expected to create new opportunities for business growth, particularly as China adapts its policies to align with the shifting dynamics of the global economy, she said. More than half of companies from the United States plan to increase their investments in China this year, according to the 2025 China Business Climate Survey Report released by the American Chamber of Commerce in China (AmCham China) in late January. The survey, conducted from October 21 to November 15, involved a total of 368 member companies of AmCham China. It found that nearly half of the participants rank China as one of their top three global investment priorities. About 68% of the responding companies expect industry markets to see growth in 2025. Two-thirds of them plan to focus on growing their core business activities in China as their primary objective for 2025. Meanwhile, the consumer and services sectors are increasingly focused on driving growth by targeting new customer segments, the China Daily reports.
