As global supply chains undergo transformation and investment patterns shift, China has taken on a dual role in the world economy – as both a magnet for foreign enterprises and an increasingly influential outbound investor, said experts and executives. This signals not only continuity in the country’s opening-up policy, but also a deeper transformation – that China is no longer just a participant in global growth, but is becoming a co-architect of it, they said. What draws foreign companies today is not the promise of low costs, but the chance to innovate, to test ideas in a vast and demanding market, and to use China as a springboard into global competition. “China remains the top target market for enterprises expanding their global trade layout, with 44% of global enterprises selecting China as their first choice for expansion,” said David Liao, Co-CEO for Asia and the Middle East at HSBC. Citing survey data, he added that 40% of global firms are either already increasing or planning to increase their manufacturing footprint in China over the next two years.
Many executives call the Chinese market a touchstone for development. ABB CEO Morten Wierod said China is the cornerstone of ABB’s business, with Xiamen, Fujian province, becoming its largest global manufacturing base and innovation center. The same pattern plays out in life sciences and healthcare. Anita Wei, Vice President of External Affairs at Danaher China, said her company’s “Double Innovation Engine” strategy is built on deep localization. “We aim to achieve 80% of sales revenue from localized production and 80% of raw material sourcing from the Chinese market,” she explained. “This allows our R&D teams to respond directly to clinical needs in China and then promote those solutions globally.” Wei emphasized that the company’s commitment is also about long-term trust. “China’s continuous opening-up and improving business environment give us the confidence to keep investing. We are committed to building long-term, trusted partnerships that address global challenges together.”
Other foreign companies have adopted similar strategies. Zhao Bingdi, President of Panasonic China, described the shift by saying that China is not only a manufacturing center for Panasonic, but also an innovation hub, and that the Japanese firm is transitioning from “in China, for China” to “in China, for global” with the aim of leveraging the competitive edge honed in China for Southeast Asia and beyond. These strategies have been underpinned by policy. China has steadily opened its doors wider, reducing national and free trade zone negative lists for foreign investment to 29 and 27 items, respectively. Restrictions on manufacturing investment have been removed, while pilot programs in cloud computing, biotechnology and wholly foreign-owned hospitals are underway. Procurement, IP protection, data flows and tax incentives are all being fine-tuned to create a more predictable business climate.
If inbound investment illustrates how China strengthens multinationals, outbound investment shows how Chinese firms are reshaping international markets. In 2024, outward direct investment reached USD192.2 billion, bringing cumulative investment above USD3.14 trillion. For the 13th year in a row, China ranked among the world’s top three investors, according to the 2024 statistical bulletin of outward direct investment (ODI). At the end of 2024, 34,000 Chinese investors had established 52,000 overseas enterprises in 190 countries and regions, including 19,000 in Belt and Road Initiative partner countries. One example is Hungary. From 2014 to 2024, Chinese enterprises invested close to USD20 billion in Hungary, creating more than 30,000 local jobs in sectors such as automotive batteries and intelligent logistics. These projects have not only delivered advanced technologies, but also strengthened Hungary’s position in Europe’s industrial chain. In Egypt’s TEDA Suez Economic and Trade Cooperation Zone, Chinese enterprises have built integrated clusters centered on high-end manufacturing and logistics – a “localized production + global sales” model that has spurred industrial upgrading and job creation, earning praise from the Egyptian government.
Smooth two-way capital flows depend on a robust financial system that can provide not only funding, but also risk protection and efficiency for cross-border activities. “Outbound investment always involves the movement of capital across borders, and financial institutions are now participating in more diverse ways,” said Zhou Mi, Senior Research Fellow at the Chinese Academy of International Trade and Economic Cooperation. He believes that services will only grow more localized and innovative. “Many Chinese and international banks are expanding their global presence, which allows them to provide on-the-ground services. At the same time, new tools – such as stablecoins and faster cross-border payment systems – are emerging to make capital flows more efficient,” he said, as reported by the China Daily.
