MNCs seek fresh growth points in China

In China, Covestro AG, a German chemicals manufacturer, is setting up a new plant in Zhuhai, Guangdong province; Schneider Electric SE, a French industrial conglomerate, will build an industrial park in Xiamen, Fujian province; and Bridgestone Corp, a Japanese tire company, has announced it will invest 562 million yuan ($77.6 million) in China over the next three years.

These seemingly unconnected corporate developments have one thing in common: they represent a trend of multinational corporations seeking fresh growth points in China's green transformation and rapid development of its high-end manufacturing sector.

Against the backdrop of global economic uncertainties, the idea of ensuring secure and sustainable investments has gained traction worldwide. MNCs, particularly those dealing in high-end materials, industrial parts and components, and green-related industries, are prioritizing long-term returns.

To this end, they are establishing more innovation centers and advanced factories in China to sustain competitiveness while navigating future challenges.

For example, Marelli Holdings Co Ltd, an Italian-Japanese mobility product supplier to the automotive industry, will expand its engineering team in China from 800 to 1,000 soon to meet surging demand for innovation.

David Slump, the group's president and CEO, said Marelli will ride China's electric vehicle wave by supplying products ranging from automotive lighting and electronics to software solutions to its partners in the country.

Dismissing some Western nations' "China overcapacity" narrative, especially in the areas of new energy industries, Slump said that China, recognized globally as a major EV market and home to some of the world's leading EV manufacturers, will create substantial opportunities for global companies aiming to sustain robust growth in this burgeoning sector.

Eager to cut carbon emissions, many countries are building infrastructure like charging facilities, battery swap stations and capable grid systems to facilitate their consumers driving EVs on the road, he said.

With around 50,000 employees and 170 plants and research and development centers across the world, Marelli also ships products manufactured at its plants in China to other parts of the world, including Mexico, Thailand and Germany.

Markus Steilemann, CEO of Covestro, said he opposes the "China has overcapacity" narrative and is not a fan of excessive regulations, especially in markets where free trade is essential.

Excessively prohibitive measures and restrictions may not effectively boost productivity, and criticizing perceived overcapacity is not the right way to global cooperation, said Steilemann, adding that about 75 percent of Covestro's planned investment in the Asia-Pacific region will be in China over the next three years.