Despite forecasts that China's economy will slow, General Motors China has set aside $1 billion to $1.5 billion annually to double its sales volume to 5 million units over the next five years, said Kevin Wale, GM China's president and managing director.

But it is not considering moves such as mergers and acquisitions any time soon, Wale said.

"Our plan is to emphasize doing business on the existing value chain."

He added that the company managed to control costs by expanding to second- and third-tier cities.

To meet the demands of the maturing Chinese market, Dow Chemical Co has allocated $200 million to invest in a terminal and logistics center and a transactional processing service center in Tianjin, according to Peter Sykes, president of Dow China.

"The Chinese government targets slower yet healthier economic growth during the 12th Five-Year Plan period. China will invest a tremendous amount of resources and effort to restructure the economy, promote social equality, and protect the environment, which we see as a great opportunity for Dow," Sykes said.

The company opened a new business center in the southwestern city of Chengdu to widen its market coverage across the country.

For foreign firms, investing in China is no longer an option but a necessity, according to Sarah Butler, managing director of consultancy for Booz and Company in China.

"Even if slowed, China's expected economic growth is still unparalleled compared with that of the rest of the world. It is a critical element in most firms' global strategy today," she said.

And as China ascends the global value chain, companies are no longer treating China as a "market to tap into" or a "manufacturing base", she added.

Faced with increasing costs and competition for skills, Butler said it is critical for foreign players to establish the right operating model with the right balance of headquarters involvement and delegated accountability so the Chinese business can respond to the market with speed and agility.

hewei@chinadaily.com.cn