Hexagon to incubate more Chinese tech firms

Swedish MNC to help further enhance local industry chain, increase investment

Swedish metrology and geo-analytics company Hexagon AB will increase its investment in China and incubate more innovation-oriented companies to aid in the nation's economic growth, a senior executive said.

Hexagon invested 5 billion yuan ($697 million) in 2022 to build an industrial base to manufacture its latest industrial equipment in Shenzhen, Guangdong province.

The company will work with local governments to build dual-intelligence empowerment centers in more Chinese cities to further develop the local industry chain, said Aime Alexandre, the group's vice-president for global marketing and communications.

"At the same time, we have set up Sixth Sense, an open innovation platform to help incubate a large number of high-tech Chinese companies in cities such as Beijing, Shanghai, Wuhan in Hubei province and Qingdao in Shandong province, to reach more technical breakthroughs," Alexandre said.

Hexagon has seen more than two decades of growth in China and the country has become one of its most important markets in terms of global strategy.

The group's business in China currently focuses on two fields — smart manufacturing and smart city — that serve more than 40,000 customers in 29 industries such as aerospace, automotive and healthcare, he said.

Supported by 24,000 employees in 50 countries and regions, the global business of the Stockholm-based group has grown from 500 million euros ($535.7 million) in 2000 to 5.2 billion euros in 2022.

The Swedish company, which is upbeat about the Chinese market, showcased its latest products and technology solutions during the sixth China International Import Expo in Shanghai earlier this month. Its exhibition area spanned 600 square meters.

Amid a sharp slowdown in global economic growth, the Chinese economy remains strong, injecting impetus into the sluggish world economy, Alexandre said.

Policy measures have strongly boosted the confidence of foreign companies in China, and Hexagon is confident in the future development of the Chinese market.

"China's openness to promote global trade cooperation and business model innovation has played an important role in strengthening trade in the global economy," he said, adding that the Chinese modernization will create unprecedented growth potential and market demand.

Hexagon will continue to expand its business in China and share development opportunities in the Chinese market — a sentiment that is in line with a recent survey.

A study conducted by the China Council for the Promotion of International Trade revealed in late October that nearly 90 percent of foreign companies operating in China expect their profits to remain stable or increase over the next five years. Many of these companies identified local technological innovation as the primary growth opportunity.

Since the beginning of this year, several multinational company executives have repeatedly shown strong interest in coming to China. They have engaged in discussions with business partners and held meetings with Chinese officials.

China's future development will be propelled by a number of primary drivers, including industrial modernization, energy transition and decarbonization, along with the transformation of domestic consumption, said Zhao Jinping, former director of the department of foreign economic relations at the Development Research Center of the State Council.

"The infusion of technology and innovation is pivotal in ushering in transformative changes to the Chinese economy," he said. "This will, in turn, create a favorable environment for foreign businesses to invest across diverse sectors like digitalization, high-tech manufacturing and innovation."

Foreign direct investment in China's manufacturing industry grew by 1.9 percent year-on-year to 283.4 billion yuan ($39.5 billion) in the first 10 months, while FDI in high-tech manufacturing soared 9.5 percent on a yearly basis, according to the latest data released by the Ministry of Commerce.