Multinationals are rewriting their China playbook

Editor's note: Wang Tianyu is a CGTN reporter. The views expressed are the author's own.

Multinationals are not just staying in China; They are changing how they play.

"Design elsewhere, sell here" is out; "Build, innovate and compete here" is in. 

As a reporter who has been covering the annual China International Import Expo (CIIE) over the past five years, I have been hearing the above from executives at this year's event.

The scale of participation backs it up. The ninth CIIE, which is being held from November 5-10, draws a record 4,142 overseas exhibitors from 162 countries, regions and international organizations. More than 300 Fortune Global 500 companies and industry leaders are taking part for the first time, and over 2,000 companies have made their debut.

But numbers would not tell you what companies are thinking. So, at the expo, I kept asking executives one question: "In a market this fast and this crowded, what does it take to win?"

"In China, for China" and – "for the world"

Nissan's answer is partnership. The Japanese carmaker and China's Dongfeng have been partners for 23 years. 

In the beginning, the story was simple: Nissan brought global models to China. Today, the joint venture designs, develops and manufactures cars "made in China for Chinese customers, but also for global," that’s according to Isao Sekiguchi, managing director of Dongfeng Nissan Passenger Vehicle Company.

In a manner of speaking, China is no longer the last stop of the supply chain. It is where the product is born.

The lesson that flows both ways

Hendrik Kohleick, Asia-pacific president of German chemicals giant Henkel, took the idea one step further. China is now Henkel's third-largest market worldwide, he said, and "more than just end market or manufacturing hub." It has become "a hub for innovation, for the region and also for the world."

For decades, the assumption was that multinationals bring ideas to China. Increasingly, they also take ideas from it.

Not everyone takes the same road

Adapting does not mean everyone copies the same playbook. Porsche chose a different one. Alexandre Gibot, managing director of Porsche Motorsport Asia Pacific, told me that the brand is celebrating 75 years of motorsport, so its push here is "not just a reaction to a situation on the market." 

Racing culture in China is younger than in Europe or the United States, and Porsche sees room to grow.

Motorsport, Gibot said, can "definitely contribute to the sales quality" in China.

It is a calculated bet. In a market full of fast electric vehicles, the brand with the longest history of speed is competing on identity instead of volume.

Confidence is not complacency

None of this means the road is easy. Every executive acknowledged the intensity of competition, and several said openly that China's pace is forcing them to change. But the companies that sounded most optimistic were also the ones adjusting the most.

So, when people ask whether multinationals are retreating from China, I think they are asking the wrong question. 

The better one is how fast they are adapting. In today's China, standing still is the real risk. The multinationals I met in Shanghai know that, and they are acting on it.

(Cover via VCG)