Three or four decades ago, multinational corporations used to take a simple approach while conducting their businesses in China. They would bring in products that had already succeeded internationally and instruct local factories to produce them for Chinese consumers. This strategy, backed by the scale and profitability of the Chinese market, proved effective. As a result, they could gradually expand their presence by establishing additional plants, branches and regional offices in China to maintain a competitive edge. However, this model no longer fits today’s complex business landscape.
A large number of global companies have leaned heavily on the China International Import Expo (CIIE), held annually in Shanghai for seven years now, to showcase their latest products, solutions and services, as well as build connections with new clients in China as well as other countries. Numerous products and technological solutions making their debuts at the CIIE were developed in their research and development (R&D) centers in China, showing a clear trend in their investment focus within the country in recent years. The seventh edition of the CIIE, which was held from November 5 to 10, covered an area of over 420,000 square meters and attracted 3,496 exhibitors from 129 countries and regions. Up to 297 Fortune 500 companies and industry leaders were present at this year’s Expo, a record high, according to information released by the Ministry of Commerce (MOFCOM).
The Expo has established itself as a premier venue for global product debuts for seven years. Arnold Li, Senior Vice President of Ingersoll Rand, a U.S. industrial goods manufacturer and seven-time participant at the CIIE, said the Expo has become a key platform for Ingersoll Rand to launch new products. The company held the world premiere of its latest compressor during the CIIE. “The Chinese market holds a pivotal position in our global business strategy. As the second-largest economy in the world, China offers immense potential and innovative capabilities, presenting us with numerous opportunities for growth,” said Li. “We firmly believe that the Chinese market is not only a key driver of our current business expansion, but also a core focus of our future strategic layout,” he said. Sectors including healthcare, biotechnology, new energy and automation will be the group’s next growth points in China, he added.
Amid the current headwinds to economic globalization, China remains steadfast in advancing reform and opening-up, optimizing the business environment, and continuously working to enhance market transparency, efficiency and market rules. The government has introduced a series of policies to attract foreign investment, said Dereck Ji, Managing Partner for China at Belgium-based ADL Consulting. The latest edition of China’s national negative list for foreign investment, which took effect on November 1, has removed the last two manufacturing-related restrictions, further opening the sector to global investors, according to the National Development and Reform Commission (NDRC). “As China’s manufacturing sector undergoes transformation and upgrading, high-end manufacturing has become a key area for attracting foreign investment,” Ji said.
Strategic industries in the manufacturing sector, such as electric vehicles, new materials, intelligent manufacturing, industrial robots, biomedicine and high-performance medical devices, aerospace and high-end equipment manufacturing, offer opportunities for foreign companies to achieve growth through technological cooperation and investment, he added.
Apart from showcasing the latest products and technology at its 600-square-meter booth, Swedish technology group Hexagon said it plans to deliver more tailored solutions for rapidly expanding sectors such as electric vehicles (EVs) and commercial aviation to support China’s rising demand for high-end manufacturing. “Collaborating with local partners and startups has been a key part of this strategy, helping us to remain agile and address China’s industry needs directly,” said Josh Weiss, President of Hexagon’s Manufacturing Intelligence Division. After establishing empowerment centers in Shanghai and Qingdao, Shandong province, as well as other regions within the country in recent years, the Stockholm-headquartered group is currently building its South China headquarters in Shenzhen, Guangdong province, with an investment of more than €200 million. The facility will be operational by the end of next year. This will create an “Industry 4.0” demonstration model, including a global “lighthouse factory” and the core resource ecosystem for the entire industrial chain, said Weiss.
Foreign executives at the CIIE often express “long-term confidence in China”, grounded in the country’s stable economic fundamentals and the consistent trajectory of steady growth in the world’s second-largest economy, said Liu Tao, Researcher specializing in market economy studies at the State Council’s Development Research Center, as reported by the China Daily.
