In a significant shift, multinational corporations (MNCs) are increasingly looking to China as a primary engine for growth, driven by the nation’s commitment to green transformation and advancements in high-end manufacturing. Recent announcements from significant companies highlight this trend: Covestro AG, a German chemicals manufacturer, is establishing a new plant in Zhuhai, Guangdong province; Schneider Electric SE, a French industrial giant, is set to develop an industrial park in Xiamen, Fujian province; and Bridgestone Corp, the Japanese tyre manufacturer, plans to invest 562 million yuan (£61.1 million) in China over the next three years.
This wave of investment comes amid global economic uncertainties, prompting MNCs to secure sustainable and long-term returns. Many companies specialising in high-end materials, industrial components, and green technologies are investing in innovation centres and advanced manufacturing facilities within China to maintain competitiveness and navigate future challenges.
For instance, Marelli Holdings Co. Ltd, an automotive product supplier, will expand its engineering team in China from 800 to 1,000 to meet the growing demand for electric vehicle (EV) innovations. CEO David Slump emphasised that China’s robust EV market offers substantial opportunities for global firms, countering narratives of overcapacity in the sector.
Similarly, Markus Steilemann, CEO of Covestro, rejected claims of excessive capacity, arguing that solid regulations in a free trade environment are essential for fostering productivity. Covestro is set to build a plant for thermoplastic polyurethanes in Zhuhai, with an annual production capacity of 120,000 metric tonnes expected by 2033.
China’s appeal lies in its wealth of innovative applications, supported by favourable policies and a dynamic market. Data from the Ministry of Commerce shows that the high-tech manufacturing sector attracted 12.7% of foreign direct investment (FDI) inflows in the first four months of this year—a 2.7 percentage point increase year-on-year. This trend is bolstered by China’s recent lifting of restrictions on foreign investment in manufacturing, resulting in a 19.2% rise in new foreign-invested firms.
Jin Zhuanglong, Minister of Industry and Information Technology, affirmed that the government will bolster support for foreign businesses establishing R&D centres in China, prioritising collaboration in technology research and sustainable development.
Schneider Electric is capitalising on this momentum with its “China Hub” strategy, aimed at enhancing innovation, talent acquisition, and ecosystem development. This commitment reflects a broader trend among multinationals to align with China’s evolving economic landscape, strategically positioning themselves to harness its manufacturing sector’s vast potential.
As global companies pivot towards China, the nation is set to remain a critical player in the international investment landscape, promising exciting opportunities for growth and innovation in future years.
