China Insights, Global Advantage – How innovation is powering multinational growth

Deloitte today hosted the second MNC Future Summit in Shanghai under the theme “China Insights, Global Advantage”.  The summit convened more than 300 senior executives from leading multinational corporations, government officials, business leaders, and Deloitte partners to examine how China’s dynamic innovation ecosystem is empowering global multinational enterprises to build more resilient and sustainable competitive advantages.

Policy momentum builds, reinforcing China’s role as an anchor of stability

2026 marks the inaugural year of China’s 15th Five-Year Plan. Following the recent conclusion of China’s “Two Sessions”, positive policy signals have been issued, clearly emphasizing the goals of stabilizing foreign investment and further optimizing the business environment. Together, deepening reforms to streamline administration, delegate power, improve regulation, and enhance services—alongside accelerated progress in building a unified national market—are strengthening China’s appeal to global investors and demonstrating the country’s firm commitment to high-level openness.

Deloitte China CEO Dora Liu says, “Amid growing global uncertainties, China is providing multinational enterprises with a stable environment through institutional-level openness. From the full removal of foreign investment restrictions in manufacturing to the deepening of service sector openness during the 15th Five-Year Plan period, China continues to strengthen multinationals’ confidence in long-term investment.

“At the same time, an innovation ecosystem, powered by high-end talent, complete industrial chains, rich application scenarios, and efficient institutional frameworks, is rapidly taking shape and becoming increasingly integrated into the global R&D network. An increasing number of multinational enterprises are now redefining China’s role: no longer merely a manufacturing base or sales market, but a strategic global hub for research and development and industrial chain collaboration.”

Deloitte China MNC Services Lead Partner Li Jiaming says, Our long-term market observations and in-depth interviews show that although global economic growth remains sluggish and the outlook is uncertain, China’s role in multinational corporations’ global strategies has become increasingly prominent in multiple domains.

1. From “world factory” to “innovation powerhouse”: China’s strategic transformation

Amid the profound restructuring of global industrial chains, China has evolved beyond its role as a key manufacturing and procurement center—it is now rapidly emerging as a critical source of global innovation. A fundamental shift is underway: from the traditional model of “in China, for China” to a more strategic approach of “in China, for the world,” driven by a new wave of innovation across four key sectors:

Energy transition: China has widely adopted renewable energy technologies and leads globally in both the deployment of renewable energy and the production capacity of clean energy equipment. A fully integrated innovation ecosystem spanning R&D, manufacturing, and real-world application has taken shape.

Biotechnology: Pharmaceutical and medical device innovation has surged, with homegrown breakthroughs increasingly entering global development pipelines. Chinese biotech firms are actively engaging in international clinical collaborations and global market competition.

Digital economy: Technologies such as artificial intelligence, the industrial internet, and big data are now deeply embedded across production and service processes. This integration is driving a broad transformation toward intelligent operations, platform-based business models, and networked industrial ecosystems.

Advanced manufacturing and decarbonization: Robotics and digital twin technologies are rapidly permeating manufacturing environments. Pioneering models such as smart factories and zero-carbon industrial parks are being explored, with growing synergies among regional innovation clusters.

2. Strategic evolution: Achieving “localization 2.0” – From local adaptation to global contribution

Amid China’s accelerating technological evolution and the deep restructuring of global industrial chains, multinational enterprises must transcend traditional localization and instead build a new form of competitive advantage: one that not only thrives locally but also actively contributes to and shapes global strategies. Leading multinationals are advancing their China strategies across three key dimensions:

Local innovation fuelling global growth: Multinationals are establishing regional and even global R&D centres in China. By developing technologies and defining products close to Chinese consumers, they are leveraging China as a strategic “innovation proving ground” from which proven models can be scaled globally.

Digital transformation of business models: Companies are deeply integrating into China’s advanced digital ecosystem to accelerate product commercialization. Leveraging vast datasets and rich real-world use cases, they can rapidly iterate and refine customer experiences. Strategic adoption of AI and digital channels is enabling new operating paradigms, such as direct-to-consumer engagement and platform-based services. This “pioneer in China, scale globally” approach is becoming a blueprint for innovation across markets.

Empowering local decision-making for greater agility: Multinationals are delegating greater decision-making authority to local teams, shortening approval chains. To accelerating response times, they are building capabilities to anticipate regulatory shifts and industry trends, turning insights from China into strategic inputs which shape global strategies.

3. Empowering local talent, expanding global impact: Chinese teams rise as strategic leaders

As more multinational enterprises position China as a strategic hub for refining global competitiveness, the ability to attract and retain top-tier R&D and management talent has emerged as a pivotal factor in the success of their worldwide strategies.

Talent localization in China is accelerating and maturing. The global influence of Chinese teams is steadily expanding, with more companies placing greater emphasis on building local leadership—driving a transformation from “executors” to “decision-makers” and from “participants” to “leaders.” This reflects a broader strategic transformation: from operating as “foreign players” to becoming deeply embedded, locally rooted partners in China’s innovation ecosystem. This shift goes beyond improving agility and market responsiveness in China—it is catalysing a new era of reverse innovation: “In China, for the World.” Increasingly, innovations and insights locally developed are being systematically scaled and adapted for broader global application.

Deloitte: Enabling multinationals to capture China’s opportunities and co-create global success

Deloitte China has consistently stood at the forefront of corporate globalization, gaining deep insights into the core challenges businesses face in strategic planning, operational efficiency, technology transformation, compliance management, and organizational change.

Dora Liu says, “We will continue to combine global vision with deep local insights, leveraging our integrated capabilities in audit, tax, and consulting to help organizations navigate complexity and drive transformation. In this new era of high-level openness, Deloitte will remain a trusted advisor, empowering multinational enterprises to seize structural opportunities, integrate into China’s dynamic innovation ecosystem, and achieve sustainable, locally driven value creation.”

Deloitte elevated its more than two-decade-old “Chinese Services Group” practice into the “Deloitte China Global Office (DCGO)” in 2025. This strategic upgrade aims to systematically integrate Deloitte’s global capabilities and resources, deepen our commitment to the Chinese market, focus on key industry sectors, and drive cross-border innovation collaboration. By building a more connected ecosystem of partners worldwide, the DCGO facilitates deeper resource alignment, shared opportunities, and mutual learning between China and the world.

Deloitte has consecutively hosted the MNC Future Summit: a high-end international platform that fosters dialogue, intellectual exchange, experience sharing, and strategic collaboration. The summit not only empowers multinational enterprises to seize new development opportunities and deepen their integration into China’s evolving economy, but also accelerates the globalization of China’s innovation ecosystem, fostering two-way investment, technology exchange, and sustainable momentum for an open, interconnected global economy.