Foreign firms in China move from manufacturing to innovation powerhouses

NANJING, Jan. 1 (Xinhua) -- On the assembly line of TLD Asia (Wuxi) Co., Ltd., robotic arms move swiftly as workers complete their final inspections of new cargo loaders destined for major Chinese airports.

Behind this scene is a broader transformation: Foreign enterprises in China are evolving far beyond manufacturing roles -- they are integrating deeply into local innovation ecosystems and supply chains to secure growth in one of the world's most competitive markets.

TLD, a leading airport ground support equipment company, first entered China in 1979 and established a manufacturing base in 2008 in Wuxi City, east China's Jiangsu Province.

"We achieved a sales revenue of about 200 million yuan (about 28.45 million U.S. dollars) in 2022, 300 million yuan in 2023, and around 630 million yuan in 2024," said Wu Jianqiang, chief operating officer of the firm's Wuxi branch, noting that it is now the fastest-growing company within the global TLD Group.

This remarkable performance is underpinned by China's efficient, resilient supply chains. Wu cited the example of a cargo loader comprising thousands of components can source all of its suppliers domestically, with about 95 percent of those suppliers positioned within a one-hour industrial supply circle around Wuxi. This high level of localization reduces costs and creates powerful synergistic effects.

The advantage is shared by other foreign firms in the Yangtze River Delta region. Spanish-owned CMP Suzhou Corp, which produces auto chassis damper parts under CMP Automotive Group, settled in Jiangsu's Suzhou City in 2008.

"We can develop new products within days and provide quotes within hours," said Yang Nan, general manager of the Suzhou branch, attributing this rapid response to an efficient industrial ecosystem fostered by regional integration.

CMP Suzhou Corp has transitioned from a production base to a regional innovation headquarters, establishing an R&D center with specialized laboratories in 2017. With 23 invention patents and over 30 percent of its staff engaged in R&D, the company has successfully expanded its clients from makers of traditional fuel vehicles to leading Chinese NEV brands like Changan, Chery and Seres.

Buoyed by 30 percent annual business growth at its Suzhou branch over the past three years, CMP Automotive Group injected an additional 20 million U.S. dollars into the subsidiary in 2023 to expand production.

"The Chinese factory has become the subsidiary with the best return on investment in our global network," said Alfonso Ameyugo, chief executive officer of CMP Automotive Group.

Integration is taking on a more advanced form as foreign firms relocate core R&D and strategic business units to China.

French electrical and digital infrastructure company Legrand recently transferred its intelligent lighting control system business to Wuxi, aiming to build a research hub for the Internet of Things (IoT). Oliver Chaudet, CEO of Legrand China, cited the comprehensive industrial chain in Wuxi -- a city dedicated to IoT construction -- as key to this decision, predicting it would drive a 130 percent increase in sales for Legrand Wuxi by 2026.

China's vast, dynamic market presents both unparalleled opportunity and intense competition. Foreign companies also widely acknowledge that succeeding here requires significantly greater efforts.

"We have a sense of crisis and must race against time to sharpen our competitive edge," admitted Wu, who praised the rapid technological advancement of Chinese enterprises, exemplified by the rise of the NEV sector.

This competitive pressure, however, serves as a catalyst for innovation. French entrepreneurs observe that the intense race in China motivates foreign investors to continually enhance their innovative capabilities. A case in point is TLD Asia (Wuxi) Co., Ltd., which has developed technologies such as an automatic safety approach system in anticipation of future labor shortages at airports.

"To a certain extent, it is our Chinese branch that is propelling the entire TLD Group forward on the path of continuous innovation," Wu added.

The narrative of foreign businesses in China is being rewritten. They no longer consist solely of offshore factories but are becoming deeply embedded strategic hubs, leveraging localized supply chains, contributing to and drawing from regional innovation, and evolving under market pressure to stay at the forefront of global competition.