EXPERT TALKS | New Trends for Foreign-Invested Projects in China
This conversation with Daniel Heusser and Nicolas Musy provides valuable insights into the dynamic landscape of foreign-invested projects in China and the trends currently shaping the market. Companies need to carefully evaluate market dynamics, regulatory frameworks, and operational requirements to make informed investment decisions. CHINA INTEGRATED and VIRTUARCH, as long-established and reliable solution providers with impeccable track records, are valuable partners for foreign companies planning to invest in China.
Daniel HEUSSER
Let’s start by assessing the general sentiment in Europe, particularly Switzerland, concerning investments in China. How do you perceive the current situation?
Nicolas MUSY
In Switzerland, the prevailing sentiment among companies engaged with China remains pragmatic. Companies already in the market have no reason to leave. However, they face stronger competition and therefore need to focus on developing their competitive advantages to gain market share.
Besides, quite a few new companies decide to invest in the Chinese market, driven by the necessity for localization and cost competitiveness, especially in sectors like pharmaceuticals and medical devices. Recent examples include the establishment of new production facilities in the dental implant and self-injection medical devices industry.
YPSOMED is a good example of medtech localization. China Integrated evaluated the most suitable locations based on business needs, human resources, and cost-efficiency. After site selection, we negotiated investment agreements with the government and land acquisition. We also took care of legal contracts, financial matters, and key human resources search and selection. Ongoing support includes navigating relations with the local government and negotiating a potential increase in capacity and investment.
Ypsomed factory in Changzhou designed by VIRTUARCH
Daniel HEUSSER
Indeed, YPSOMED is a good example; VIRTUARCH has done the feasibility studies for the different brownfield and greenfield options of the project, developed the concept design of the new greenfield factory of YPSOMED in Changzhou and then took responsibility for Design Management and Overall Project Management of the construction project. Currently, the structure has been erected, and the façade installation, MEP installation and interior decoration are ongoing based on the designs of VIRTUARCH and under the supervision of VIRTUARCH’s site team.
Are there other noteworthy developments for international companies in China?
Nicolas MUSY
Swiss companies also open new research and development centers, to faster develop new products adapted to the market. This is also driven by the need to compete with agile Chinese players.
Daniel HEUSSER
This is also what we are seeing among our clients. Projects today are more targeting an “in China for China” strategy, as well as investments in R&D, in optimizations and quality improvements. Existing companies in China continue to invest due to sustained profitability and favorable business prospects in their sectors in China. Our clients exemplify this trend through expansions, renovations, and efforts to enhance building quality and efficiency, including space optimization.
One Clariant Campus in Shanghai. VIRTUARCH was the architecture consultant and realized the interior decoration design and led the workplace change management process.
Belimo’s renovation project and Sika’s strategic investment in a large plant serve as prime illustrations of their commitment to the Chinese market.
Belimo’s factory extension and building renovation project, containing extended production space, office space, R&D facilities, a customer center, the staff restaurant, and automatic warehousing system serving all four production floors.
Sika’s office building at the new Pinghu production site
The commitment to improving infrastructure and operational capabilities is evident. Are there any emerging trends within the industrial landscape?
Nicolas MUSY
Alongside continued investments in pharmaceuticals, biotech, and med-tech, we also see companies targeting the automotive market, the biggest in the world. China is additionally the largest exporter of cars and the country where most e-vehicles are manufactured in the world. These industries are experiencing notable growth and demand for specialized facilities.
However, there is also a strategic consideration among some companies to diversify investment beyond China, often under a “China plus one” strategy, which entails establishing facilities in neighboring regions or other global markets.
Daniel HEUSSER
This trend is also evident in our business. In addition to more projects in the life sciences and medtech industry in China, since opening an office in Bangkok five years ago, VIRTUARCH increasingly serves clients investing under a “China plus one” strategy in Southeast Asia. Notably, we also serve Chinese clients diversifying in these regions. Currently, in Southeast Asia, VIRTUARCH is realizing industrial projects in Malaysia, Thailand and Vietnam.
Factory offices for Bosch in Rayong, Thailand
It is interesting to observe how companies are adapting their investment strategies. What is your role in facilitating these developments?
Nicolas MUSY
Through partnerships, we are now also able to support our clients in India and key Southeast Asian locations. We are also active in Portugal for companies that need economically attractive conditions in Europe without going to Eastern Europe.
Application Center for EMS in Suzhou
Daniel HEUSSER
As we conclude, what do you foresee as the future trajectory of trends in foreign-invested industrial projects in China?
Nicolas MUSY
With the market growing slower, the future for foreign companies in China will be increasingly characterized by competition. Efficiency, agility, and innovation, with an increased focus on sustainable practices, digital integration, and flexibility to adapt to evolving market dynamics, can provide the next competitive advantages for successful development. Collaboration and synergy between stakeholders will continue to generate advancements in facility design for operational excellence, ultimately supporting the growth and competitiveness of foreign-invested industrial ventures in China.
ABOUT THE EXPERTS
About VIRTUARCH
VIRTUARCH is an architecture and project management company with offices in Switzerland, China and Thailand, specialized in workplaces (Industrial Buildings, R&D Facilities, Offices and Headquarter Buildings), as well as in the field of education (Kindergartens, Schools, Universities Vocational Training Centers, Adult Education). VIRTUARCH has successfully realized more than 500 projects in Europe and Asia for Multinational Corporations and Small and Medium-Sized Companies, often being Market Leaders and Hidden Champions in their fields.
About CHINA INTEGRATED
China Integrated is a professional solution provider dedicated to supporting international companies in establishing and developing their businesses in China. Whether a company’s needs are market entry, operations set-up, growth or acquisition, China Integrated has the expertise to develop integrated solutions designed to facilitate sustainable and superior success.
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