In a year marked by increasing protectionism and efforts to "decouple" globally, Danish company Danfoss, known for its energy efficiency solutions, has made real progress in expanding its innovation and manufacturing presence in China. In January, Danfoss started operating a newly upgraded application development center in Suzhou.
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| PHOTO: CHINA |
Then, in April, they officially opened their first carbon-neutral factory in China, located in Nanjing. By September, they also launched their largest production base in China, situated in Haiyan, Zhejiang Province, which serves global markets.
Kim Fausing, president and CEO of Danfoss, said, "China is our second home market, offering significant opportunities for growth, collaboration, and innovation." Danfoss is not the only company enhancing its commitment to the Chinese market this year.
According to the Ministry of Commerce, China saw 61,207 new foreign-invested enterprises in the first 11 months of 2025, a 16.9 percent increase compared to the previous year.
The active participation of foreign companies in China shows how attractive the country still is despite global economic uncertainty.
This is due to its huge market, complete industrial networks, innovative environment, and ongoing efforts to open up to the world.
China has every industrial category classified by the United Nations.
Its manufacturing industry has been the largest globally for 15 years in a row, contributing nearly 30 percent of the world's total value added.
Robin Xing, chief economist at Morgan Stanley China, noted that China's ability to integrate industrial chains is almost unmatched worldwide, whether in terms of engineering talent, supporting infrastructure, or scale.
China's strong industrial chains are a big draw for foreign investment.
Along with a massive consumer base of 1.4 billion people and their continuously changing needs, China remains a top choice for global investors.
Vincent Boinay, president of L'Oreal North Asia Zone and CEO of L'Oreal China, said that China is the company's second-largest market and the most important one.
He added that China's consumer base is the largest, fastest-growing, and most dynamic in the world.
On June 25, Airbus held an event in Beijing to celebrate the 40th anniversary of its partnership with China's civil aviation sector.
They also announced the launch of a refurbishment project for an A310 aircraft, the first Airbus jet delivered to China in 1985 and retired in 2006.
Despite decades of rapid growth, China's aviation industry is still far from saturation and holds a lot of potential for future expansion.
Airbus estimates that China will need around 9,570 new planes over the next 20 years, making up nearly a quarter of global demand.
Pan Yuanyuan, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, said that China's large market, efficient supply chains, and improving innovation environment provide a strong foundation for continued foreign investment.
For multinational companies, a presence in China is not only due to its size but also because of the ability to use Chinese innovation, technology, and product development to boost global competitiveness, according to Denis Depoux, global managing director of Roland Berger.
The 2025 Global Innovation Index, released by the World Intellectual Property Organization, ranks China 10th among the world's most innovative economies, a one-spot improvement from the previous year.
The report also showed that China leads globally in the number of innovation clusters, with 24 ranked among the world's top 100. In October, British pharmaceutical company AstraZeneca opened its sixth global strategic research and development (R&D) center in Beijing, its second in China after the one in Shanghai.
The new facility will use Beijing's strong scientific environment and AI strengths to speed up the development of innovative next-generation drugs.
In November, German car maker Porsche launched its first strategic overseas R&D center in Shanghai.
Sajjad Khan, member of the executive board of Porsche AG, car-IT, said that through its China R&D Center, Porsche can directly join China's fast-evolving innovation ecosystem, cutting R&D time from years to months.
Lin Yifu, dean of the Institute of New Structural Economics at Peking University, noted that China has a growing pool of skilled and educated talent, and this advantage will be greatly enhanced by the country's large domestic market, which helps new technologies and products reach economic scale quickly.
Michael Bi, managing partner of EY Greater China Markets, said, "China's continued support for high-tech, new energy, digital economy, and other sectors will create a new wave of investment opportunities, offering strategic chances that global investors simply cannot ignore."
Oasis of Certainty
To help foreign investors take full advantage of China's strengths in supply chain, market access, and innovation, the Chinese government has introduced a series of important measures aimed at creating a long-term, stable environment for global businesses throughout 2025.
Last year, China removed all market access restrictions for foreign investors in the manufacturing sector.
After this change, the country is now focusing on opening up more in the service industry.
In February, China released an action plan to support foreign investment, which called for expanding the national pilot program to further open the service sector and encourage the orderly development of the biomedical industry.
In April, the country announced that nine more cities—Dalian, Ningbo, Xiamen, Qingdao, Shenzhen, Hefei, Fuzhou, Xi'an, and Suzhou—will be part of comprehensive pilot programs.
These programs aim to speed up the opening of the service sector, including areas like finance and healthcare.
Chen Hongna, an associate researcher at the Development Research Center of the State Council, said that this new phase of pilot programs in the service sector will help address the lack of high-end products and services in the domestic market, offering more options and opportunities for both consumers and investors.
Earlier this month, the Hainan Free Trade Port (FTP) launched island-wide special customs operations, marking a significant step in China's ongoing effort to open up more broadly and at a higher level.
Huang Hanquan, head of the Chinese Academy of Macroeconomic Research under the National Development and Reform Commission, said that Hainan's policies are expected to attract global investment into sectors like tourism and education.
Dr. Phaichit Viboontanasarn, vice chairman and secretary general of the Thai Chamber of Commerce in China, mentioned that many Thai companies see potential in this initiative and are now using Hainan as a gateway to the Chinese market.
They are developing processing and warehousing industries on the island and expanding cooperation in maritime and wellness tourism.
Chinese Minister of Commerce Wang Wentao outlined new initiatives for the next five years, focusing on opening up the services sector.
These include expanding pilot programs in value-added telecommunications, biotechnology, and wholly foreign-owned hospitals, as well as further opening up the education and culture sectors in a structured way.
Wang also mentioned that China will speed up the progress of regional and bilateral trade and investment agreements, expand its network of high-standard free trade zones, and commit to building a better reputation for investing in China.
The goal is to create a transparent, stable, and predictable business environment.
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