Multinationals deepen China roots as innovation-driven growth opens new opportunities

BEIJING, July 24 (Xinhua) -- On Zhanjiang's Donghai Island in south China's Guangdong Province, giant production units tower over BASF's massive integrated complex, where more than 30 production lines are running at full capacity.

Covering about four square kilometers with an investment of around 8.7 billion euros (about 9.89 billion U.S. dollars), the site became fully operational in March after seven years of construction, making it the German chemical giant's largest single investment worldwide.

"Zhanjiang shows what the future of chemistry looks like: efficient, digital and sustainable by design," said Markus Kamieth, CEO of BASF. "This investment shows confidence in the world's largest chemical market in the long run." The company expects China to account for 75 percent of the global chemical industry's growth by 2035.

Like BASF, a growing number of multinational companies are expanding their presence in China amid global economic headwinds and geopolitical uncertainty, drawn by the country's vast market, resilient supply chains, increasingly innovation-driven economy, and long-term stability.

Official data point to continued foreign investment momentum. Almost 4,800 foreign-funded enterprises made additional investments in China in the first half of 2026, while the number of newly established foreign-invested enterprises rose 5.3 percent year on year, according to China's Ministry of Commerce.

"Foreign investment in China has seen both inflows and outflows in recent years, but inflows have exceeded outflows overall," said Vice Commerce Minister Ling Ji, adding that China has remained the largest destination for foreign investment among developing economies and one of the world's leading cross-border investment destinations.

Business surveys also reflect sustained confidence. A recent report by the U.S.-China Business Council found that 92 percent of surveyed companies were profitable in China in 2025, while the European Union Chamber of Commerce in China's business confidence survey this year revealed that 75 percent of respondents considered their China operations more productive than those elsewhere in the world.

Earlier this month, Mercedes-Benz launched its new all-electric GLC SUV in China. Featuring a navigation-assisted driving system co-developed with Chinese autonomous driving technology provider Momenta and powered by the Doubao large language model, this vehicle underscores the company's efforts to deepen its integration into China's automotive ecosystem.

"The current 'Champions League' in terms of competitive intensity for the automotive industry is in China," said Ola Kallenius, chairman of the board of management of Mercedes-Benz Group AG, back in March.

By April last year, the German automaker had more than 2,000 R&D staff in China, with an upgrade of its Shanghai R&D center to complement its Beijing innovation hub. In September 2025, it expanded its partnership with ByteDance to integrate Doubao into its electric vehicles.

China has evolved from the world's factory into a major consumer market and innovation hub for multinationals like Mercedes-Benz, a shift increasingly being described as "China Opportunity 2.0," reflecting opportunities arising from China's more open, inclusive and tech-powered engagement with the global economy.

"For enterprises around the world, 'China Opportunity 2.0' means across-the-board innovation empowerment and high-return investment opportunities," Chinese Premier Li Qiang said at the Summer Davos forum last month.

Foreign investment is increasingly flowing into China's service sector and high-tech industries. In the first half of the year, foreign investment in China's high-tech industries surged 33.2 percent year on year, accounting for a record 42.4 percent of the total. Meanwhile, modern services attracted 57 percent of the inflows.

"China's 15th Five-Year Plan (2026-2030) places greater emphasis on technology-driven growth and new quality productive forces, while industries across China are embracing AI and digital technologies," said Yin Zheng, Schneider Electric's executive vice president for China & East Asia Operations. The French energy technology firm is accelerating investment in China by expanding its manufacturing footprint and upgrading research capabilities.

China, meanwhile, is continuing to back its commitment to opening up via concrete policy measures. An action plan on optimizing foreign investment last month has pledged wider market access in sectors such as services, finance and pharmaceuticals, along with easier cross-border mergers and acquisitions, data flows and reinvestment by foreign firms.

As of June, Chinese authorities had held 50 roundtable meetings with foreign-invested enterprises and helped resolve nearly 3,000 issues raised by foreign businesses.

Pan Yuanyuan, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, said China's complete industrial system, abundant engineering talent and diverse application scenarios serve as key pillars of "China Opportunity 2.0", enabling multinationals to identify new demand, validate new technologies and scale up innovation more quickly.

"As China advances high-standard opening up, domestic and foreign companies will continue to grow together through deeper innovation and cooperation," Pan said.