CHONGQING, Sept. 29 (Xinhua) -- As foreign companies race to deepen their R&D footprint in China, tech firm HP has opened a new AI innovation center in southwest China's Chongqing Municipality, underscoring a broader shift from manufacturing to locally rooted research and development with global reach.
"Manufacturing was the starting point of our partnership. Innovation is its future," said Jonathan Jennings, HP's global chief procurement officer.
HP's launch of the new China AI innovation center reflects a wider trend among foreign companies operating in China. For decades, the country was best known as the world's factory, where global manufacturers built vast production lines to serve overseas markets. Now, many multinationals are moving research, design and product development closer to Chinese customers, suppliers and engineers, embedding innovation in China to serve global markets.
The scale of this shift is visible in data. Figures released by the Ministry of Commerce show that by the end of March 2026, Beijing was home to 332 foreign-funded R&D centers, with 55 added this year. Shanghai hosted 647, with 15 new ones established in the same period.
A recent survey of multinational executives in China revealed that 42 percent of companies plan to invest in China-based R&D that serves global markets over the next two years.
"Many multinationals' manufacturing bases in China are being upgraded into sources of innovation," said He Yadong, spokesperson for the Ministry of Commerce, citing recent R&D investments by companies such as AstraZeneca, Philips and Schneider Electric.
For many executives, the main reason is speed. Chinese customers, supply chains and engineering teams allow new products to move from concept to market far faster than in many other regions.
"Our customers in China adopt new technologies in about 12 to 14 months, while it can take three to four years elsewhere," said Jerome Dorlack, president and CEO of Adient, a global leader in automotive seating. The company operates three global technology centers in China, including the largest one located in Chongqing.
The talent pool in China is another draw. "China has long emphasized university education for scientists and engineers, and the new generation of Chinese engineers and scientists has a strong mathematical foundation while becoming increasingly creative," said Michael Mertin, CEO of AT&S AG, an Austrian manufacturing company.
This talent advantage is now feeding into artificial intelligence (AI), which has become a focus for foreign companies in China. HP's Chongqing center is developing AI-powered inspection systems, while Adient is using AI vision to identify production defects earlier in the process.
The global reach of China-based R&D is already taking shape. Audi's innovation center in China is engineering luxury vehicles that could feed into Audi's global product portfolio, while Valeo is leveraging its R&D centers in China to deepen local innovation and export self-developed core new-energy technologies worldwide.
Policy support is reinforcing this trend. China's 15th Five-Year Plan (2026-2030) calls for attracting more foreign companies to establish regional headquarters and R&D centers, with many cities rolling out measures to support these efforts.
"The concentration of foreign R&D centers in China shows the country is moving up the value chain and global production networks are being redrawn," said Wang Lei, a professor at the School of Government of Beijing Normal University. "Deeper integration between foreign and local innovation will raise productivity, strengthen China's role in global innovation, and pave the way for shared growth." ■
