Thriving Innovation Scene Draws Foreign Corporations to Establish R&D Hubs in China
Thriving Innovation Scene Draws Foreign Corporations to Establish R&D Hubs in China

Thriving Innovation Scene Draws Foreign Corporations to Establish R&D Hubs in China

In the midst of China’s resounding innovation surge, an increasing number of foreign enterprises are selecting the country as their prime destination to establish pioneering research and development (R&D) centers. This strategic move allows them to cater to the expansive demands of the Chinese market while simultaneously serving a broader global clientele.

In a recent development, THE LAUNDRESS, an upscale fabric care brand associated with the renowned consumer goods conglomerate Unilever, unveiled its Asia-based R&D Center in Tianjin Municipality, situated in northern China. Nestled within Unilever Tianjin Industrial Park, the R&D center has been strategically positioned to harness the efficiency and safety of the local manufacturing base.

Leveraging China’s cutting-edge intelligent manufacturing technologies, the center anticipates a substantial enhancement in the filling speed of its new production line. An impressive projected surge of 90 percent in transportation efficiency is also on the horizon. The robust support of the local supply chain bolsters the assurance of product quality and stability right from the source, according to company officials.

Clemens Herrmann, CEO of THE LAUNDRESS, stated, “Since our launch in 2019, we have witnessed remarkable demand for our products in China. The establishment of our R&D center in China underscores our commitment to nurturing local innovation and tailoring products that align seamlessly with the evolving preferences of our esteemed customers in this dynamic and thriving market.”

Unilever is not the sole contender shifting towards localized production and capitalizing on China’s intelligent manufacturing advantage. A myriad of anechoic wedges adorn the ceilings and walls of a testing chamber, creating an almost eerie yet captivating sci-fi ambiance.

This avant-garde testing room houses the leading-edge scroll compressor R&D and testing center of Danfoss, a global behemoth in the refrigeration industry. Duan Chenjun, the head of this center, revealed, “Our R&D center engages in numerous projects annually. The technologies and solutions validated through our testing process will find broad applications across various sectors, including air conditioning, data centers, cold chain logistics, and energy storage.”

Arthur Xu, President of Danfoss China, emphasized the significance of transitioning from “production” to “creation” in China, highlighting the company’s unwavering confidence in China’s sustainable development and the promising prospects of its economy. With a strong presence spanning 12 factories and 26 sales locations across China over the past 27 years, Danfoss has solidified its position as a key player in the nation’s industrial landscape. China stands as the company’s second-largest global market and primary procurement source, with approximately 10 billion yuan (approximately 1.4 billion U.S. dollars) in sales recorded in 2022.

Similarly, German automotive titan Volkswagen Group embarked on the establishment of a technology company with an investment totaling around 1 billion euros in Hefei, the capital city of Anhui Province in eastern China. This tech-centered venture serves as Volkswagen’s R&D, innovation, and procurement hub for new energy vehicles (NEVs) and intelligent connected vehicles within China.

Moreover, global water technology provider Xylem commenced operations at its R&D center in China in March, while Schneider Electric, a French multinational corporation, launched its automation-focused R&D center in Wuxi City, located in Jiangsu Province. In another noteworthy development, Volvo inaugurated a new car design studio in Shanghai in May, adding to its trio of design studios spanning the globe.

Historically, foreign investment in China predominantly targeted the expansive potential of the Chinese consumption market. However, the surge in foreign investors establishing R&D centers in China attests to the nation’s widely recognized innovation prowess.

Numerous multinational corporations are actively consolidating their business capabilities, proactively seizing opportunities for global development by leveraging China’s robust industry-university-research cooperative innovation ecosystem and its diverse pool of industrial talents.

Hu Xiao, Senior Vice President of Schneider Electric, remarked that the R&D center established in Wuxi is exceptionally equipped to meet the evolving demands of China’s local customers. Simultaneously, it possesses the agility and collaborative innovation capabilities needed to cater to a broader global market.

Throughout this year, China has intensified efforts to attract foreign investment, launching a series of targeted business promotion initiatives. Chen Chunjiang, Assistant Minister of Commerce, emphasized the pivotal role that foreign-funded R&D centers play in China’s scientific and technological innovation ecosystem. These centers contribute positively by facilitating the integration of cutting-edge international technologies and high-end talent, while also propelling advancements in industrial technology and boosting scientific and technological innovation capabilities. Consequently, this dynamic process further accelerates the growth of the global industrial and innovation chains.


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