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Foreign companies operating in China are actively refining and adjusting their local strategies. An increasing number are aiming to establish new competitive advantages in both the domestic and international markets by deeply integrating across various domains such as research and development, manufacturing, ecosystems, and community involvement.
A senior executive from a multinational manufacturing firm in China noted that staying competitive and sustainable requires gaining supply chain advantages and maintaining close relationships with customers. This has made local investment essential rather than optional. The company needs to proactively embed itself within China’s dynamic “super ecosystem,” the executive emphasized.
By integrating with the ecosystem and fostering co-creation, multinational corporations are strengthening their “in China, for China” strategies. This approach also allows those viewing China as a “gym” to continually “build muscle” and demonstrate resilience on the global stage.
Having a strong presence in China forms the foundation of Hitachi Elevator’s business, according to Jia Yuhui, president of the company’s local division. Both the company’s largest manufacturing plant and its biggest R&D team are based in China. Jia observed that, in response to China’s elevator market shifting from “incremental growth” to focusing on “stock optimization and upgrades,” modernization and retrofitting existing buildings are becoming increasingly vital for improving quality of life in the country. He predicts that orders for modernization and upgrade projects will continue to rise.
Karcher China has seen performance increase by roughly 30% this month, Tang Xiaodong, the company’s China president, told us. Its new production line has already hit full capacity, Tang added. Karcher’s sales are split roughly equally between domestic and international markets.
The company’s third-phase factory in the Yangtze River Delta region officially started operations last year. Tang pointed out that the traditional business model of exporting technology and relying on brand value is no longer sufficient. To succeed in China’s highly competitive market, foreign firms must fully integrate with local ecosystems, tailor their offerings to the specific needs of Chinese consumers, and innovate continuously based on genuine and evolving demands.
Karcher China’s recent growth in innovation and sales can be largely attributed to its focus on localizing its operations, which has created a positive cycle encouraging its international headquarters to increase investment in China, Tang explained.
Lanxess, a German specialty chemicals company, is also shifting its business focus. President Michael Rockel said the company aims to deliver greater value to customers through innovation and is transforming from a raw material-dependent model to one centered on high-value specialty chemicals. Additionally, Lanxess is optimizing costs by establishing more flexible, localized manufacturing facilities.
In particular, Rhein Chemie, a subsidiary of Lanxess, recently launched its largest global investment project in five years—expanding and upgrading its Qingdao plant. The project, which began last November, is driven by strong market demand for the company’s specialty additives for tires, Rockel explained.
An industry expert noted that China is no longer just a market for sales or low-cost manufacturing; it has become a crucial driver of global technological advancement and business model innovation. The success and market position companies develop in China will ultimately translate into durable and strong international competitiveness. To benefit long-term from China’s high-quality development, companies must deeply integrate their R&D, supply chains, product development, and social responsibility initiatives with the local industrial ecosystem, social issues, and innovation networks.
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