Attracting foreign investment for research and development centers would be a critical strategy for China to upgrade its industrial structure, and enhance the synergies between domestic and international markets and resources. The strategy would not only enable China to draw global resources more effectively into its market, but also allow the country to further integrate into the international innovation chain. By leveraging the global value chain and expanding opening-up, China can cultivate new competitive advantages in the years ahead, said Jiang Ying, Chair of market consultancy Deloitte China. Jiang said that the concentration of foreign-funded R&D centers in China’s eastern region has not provided effective support for the upgrading of manufacturing industries in other parts of the country. Currently, there are 531 foreign-funded R&D centers in Shanghai, while cities like Xian in Shaanxi province and Chengdu in Sichuan province only have a few, said Deloitte China. Apart from facilitating global companies in establishing innovation centers in central and western regions, China should create more channels for foreign businesses to participate in the government’s technology projects and improve the efficiency of technology transfer and commercialization, as well as promote the integration of multinationals into the local innovation chain, she said.
Raymund Chao, PwC’s Chairman for the Asia-Pacific region and China, said the digital economy, green development and technological innovation have become new engines to speed up global economic recovery. Due to the high growth rate achieved by Chinese companies in these fields, China is expected to play a bigger role in attracting global talent and foreign investment in these areas in the next stages, he said. The government rolled out a series of policy measures in mid-January to encourage foreign investment in research and development (R&D). Key measures include encouraging foreign-funded R&D centers to conduct fundamental research, allowing them to use reports and data collected by national research programs and strengthening support for infrastructure and operational funding, according to the Ministry of Commerce (MOFCOM).
Eager to expand its market presence, LG Chem, a South Korean chemical company, announced that it completed construction of a technology center in Wuxi, Jiangsu province, in late February. With a total investment of USD30 million, the center will be equipped with advanced lab facilities and top-level talent to provide all-around technology solutions in China, said Shin Hak-cheol, CEO of LG Chem. Ou Yunfei, COO of Valin ArcelorMittal Automotive Steel Co, a joint venture between Luxembourg-based ArcelorMittal and state-owned Hunan Valin Steel Co, said that as the economies of the Regional Comprehensive Economic Partnership (RCEP) further implement their open commitments under the agreement, tariffs will continue to drop in 2023, which would be helpful for domestic automakers to export more vehicles to Southeast Asian markets. “We will invest more in product innovation and new manufacturing processes to supply more advanced high-strength steel to Chinese vehicle manufacturers, reinforcing their earning strength in international markets such as Southeast Asia and economies participating in the Belt and Road Initiative,” he said, as reported by the China Daily.
