Advanced manufacturing magnet for foreign firms amid upgrades

BEIJING — China's advanced manufacturing is attracting the attention of foreign-invested companies amid an innovation-led upgrade of the nation's industrial chain.

"We see booming innovations in areas including new energy vehicles, and connected and automated driving trucks in China, and we consider China a place to pursue the development and application of such future-oriented products," said Holger Scherr, president and CEO of Beijing Foton Daimler Automotive Co Ltd, and head of the Mercedes-Benz business unit.

David Fan, executive vice-president and China president of Japan-based auto parts supplier Marelli, also pointed to the growing innovation capabilities of the Chinese market as one of the important reasons for the country's market and supply chain having an irreplaceable role for Marelli.

China's manufacturing sector has remained a land of opportunity for foreign-invested companies over the years for its manufacturing prowess and the most comprehensive industrial chain in the world. In 2023, foreign investment into the sector accounted for 27.9 percent of the total, up 1.6 percentage points from the previous year, official data showed.

This year, the country has put developing new quality productive forces — featuring high-tech, high efficiency and high quality — atop its agenda.

The upgrade of industrial and supply chains is among the three aspects, that the development of new quality productive forces will cover, said Zhang Qingjie, head of digital enablement and head of AI at KPMG China.

Some foreign-invested companies have already noticed the gradual repositioning of China's industrial chain, and are adopting a preemptive strategy to tap into the shift.

"We plan to promote a model of inverter compressors for heat pumps this year in Europe. The model is developed through a technology platform that we built in China, reflecting the change of the Chinese market's core competitiveness from a comprehensive supply chain to an innovation-oriented one," said Xu Yang, president of the China unit at Danfoss, a Denmark-based energy efficiency solutions company.

Xu said the company has been actively leveraging China's innovation capability and improving its smart manufacturing. In April, Danfoss will launch construction of the second phase of its Haiyan campus in Zhejiang province, which is its largest manufacturing base in China, according to Xu.