MNCs harness Chinese market dynamism

Multinational corporations remain adamant in scaling up investment in the Chinese market, shifting from manufacturing to a comprehensive model that integrates innovation and green growth, particularly in sectors like consumer goods and smart manufacturing, said business executives.

Instead of merely shipping goods out of Chinese factories, global companies are now embedding full research, design and after-sales service functions in their China operations, they said.

After acquiring a majority stake in Shandong Junjun Cheese Co Ltd in China in 2022, French cheesemaker Bel Group announced earlier this month that it will build its second factory in China in Yucheng, Shandong province.

This marks Bel's first local production and research and development base in China and represents a key component of its global supply chain optimization strategy.

The establishment of the new factory will help enhance Bel's localization of milk source layout in China, ensuring a stable and high-quality large-scale milk source supply, said Gorge Bai, general manager of Bel China and general manager of Shandong Junjun Cheese Co Ltd.

Meanwhile, Bel will actively introduce advanced international experience and technology into China, deeply integrating with Chinese cultural characteristics and driving innovation tailored to the local market, said Bai, noting that Kiri, one of the company's cheese brands, has been successful in this practice.

"By absorbing global resources and technological strengths while catering to the unique needs of local customers, we aim to achieve double-digit revenue growth in China this year," he added.

Thanks to its early strategic layout, the French company can respond to trade policy shifts and geopolitical tensions. Bel has been promoting a "local for local" strategy in China, enhancing local and Asian regional supply chains, followed by targeted adjustments in its business model, from the original distributor import agent to the self-operated team structure.

Bai said this not only ensures a more stable product supply, but also allows for timely capture of channel opportunities, such as prepositioning high-end supermarkets, e-commerce and O2O(online-to-offline) channels.

Amid rising geopolitical tensions and potential supply chain disruptions, Yoav Zeif, CEO of Stratasys Ltd, a United States-based 3D printing products manufacturer and solution provider, said the company will ramp up its expansion in China, as distributed production enabled by 3D printing has emerged as a strategic solution for manufacturers to avoid paying high tariffs.

By producing parts closer to end users, such as through local service bureaus in the US or Europe, companies can reduce logistics costs, shorten delivery times and mitigate risks associated with tariffs and logistics uncertainties, said Zeif.

He said that China's manufacturing ecosystem, particularly in the automotive, medical and service bureau sectors, offers vast potential for industrial-grade additive manufacturing.

"We see China not only as a key market, but also as a strong innovation partner as it moves toward digital and decentralized manufacturing under its industrial upgrade," Zeif added.

The actual use of foreign direct investment in China's high-tech industries reached 109.04 billion yuan ($15.2 billion) between January and May of this year, with FDI rising 74.9 percent year-on-year in the aerospace equipment manufacturing sector, and 59.2 percent on a yearly basis in the chemical pharmaceuticals manufacturing sector, data from the Ministry of Commerce showed.