Research and development of drugs File photo: VCG

Multinational companies are accelerating their investments in research and development (R&D) and advanced manufacturing in China, marking a structural shift from treating the country primarily as a low-cost production base to positioning it as a global innovation and supply hub, Chinese analysts said.

Several major firms announced significant new commitments this month. AstraZeneca, as one of the latest examples, is investing nearly 200 million yuan ($29.8 million) to upgrade its production and supply base in Wuxi, East China's Jiangsu Province, focusing on process development and manufacturing for an investigational cardiovascular drug, the company announced on Thursday.

The facility is scheduled to begin operations in the fourth quarter of 2029, with an annual capacity of 400 million tablets. The Wuxi site is expected to become AstraZeneca's first Asia-Pacific base capable of supporting global new drug launches and supply.

This marks a step forward after AstraZeneca announced in January that it would invest more than 100 billion yuan in China by 2030.

Sanofi, another multinational pharmaceutical giant, on Wednesday inaugurated its R&D innovation center in Shanghai's Jing'an District, with total investment exceeding 200 million yuan.

The upgraded facility is now the company's largest translational medicine research center in China. China participates in more than 90 percent of Sanofi's globally synchronized development programs, according to a release by the Jing'an local government.

In advanced materials, Arkema broke ground on a polyvinylidene difluoride (PVDF) expansion project at its Changshu site in Jiangsu on Wednesday. With cumulative investment already exceeding 600 million euros ($688 million), the Changshu base is Arkema's largest industrial facility worldwide and its biggest R&D center in Asia. The expansion will raise total PVDF capacity by 20 percent, serving lithium-ion batteries for electric vehicles (EVs) and energy storage, as well as semiconductor manufacturing.

In the first seven months of this year, 37,711 new foreign-invested enterprises were established in China, up 4.4 percent year-on-year, while actual utilized foreign investment reached 438.33 billion yuan. High-tech industries attracted 182.31 billion yuan, up 32.7 percent and accounting for 41.6 percent of total utilized foreign direct investment, according to the Ministry of Commerce.

These moves align with China's emergence as a growth engine in next-generation industries, Tian Yun, a Beijing-based economist, told the Global Times on Thursday.

"China is no longer merely a link in global supply chains. It is increasingly becoming a central node connecting R&D, production, markets, and worldwide distribution — offering foreign firms both a large domestic market and a platform for global innovation and supply," said Tian.

China is the only country that can match the US in artificial intelligence (AI). This is a key reason why more and more companies are locating their R&D and industrial innovation centers in China, Tian noted.

An article in the September issue of the IMF's journal Finance & Development highlighted EVs, commercial aircraft, innovative drugs, and robotics as new drivers of Chinese growth, while citing advances such as low-cost AI breakthroughs.

The IMF article also pointed out that China's transition came from demand-side strengths, including a vast market and rapid consumer adoption of new technologies, as well as supply-side advantages, including dense industrial clusters and rising R&D intensity.

"In the Yangtze River Delta, an EV maker can source all the components it needs from suppliers within a four-hour drive, which means lower coordination costs and a shorter loop between design and production," the IMF said.

This could explain why multinationals such as Arkema increased investment in cities in Jiangsu, which is part of the Yangtze River Delta EV supply chain.

"This means that China's economic transformation is releasing not only new consumer demand, but also new industrial growth points and new spaces for cooperation. For foreign companies, these changes offer new ways to enter and participate in the Chinese market," said Tian.

China's consistent opening-up and the opportunities brought by its high-quality development are also reflected in business sentiment.

A recent German Chamber of Commerce survey found that 61 percent of respondents plan to increase China investment over the next two years - the highest level since 2023.

A recent report by the American Chamber of Commerce in Shanghai showed that nearly 80 percent of surveyed US companies in China were profitable in 2025, the highest level since 2019, while nearly 60 percent were optimistic about their business outlook over the next five years, up 17 percentage points from the previous year.

Analysts noted that the investments and the business surveys indicate that multinational firms are casting a vote of confidence in China.