China's improving research infrastructure and innovation ecosystem are attracting more foreign companies to build research and development centers in the country.
In the first quarter of 2026, actual foreign investment in high-tech services, led by research and development and design services, surged 127.8 percent year on year, according to official data released by the Ministry of Commerce.
Multinational firms are increasingly leveraging China's stable supply chains to turn the country into a "hub of original innovation," taking advantage of breakthroughs in intelligent driving, green development, and advanced manufacturing.
German auto giant BMW opened its first IT R and D center in Nanjing in July 2025, one of six such facilities worldwide, marking a significant expansion of its digital capabilities.
"By focusing on key technologies such as artificial intelligence and industrial digitalization, we have developed a range of solutions tailored to real business needs. These have already been applied across BMW's R and D, production, supply chain, sales and service operations in China, and have also been integrated into BMW Group's global IT network to support business in other markets, said Qi Haifei, CEO of BMW (Nanjing) Information Technology Co., Ltd.
Other global players are also betting on China's innovation ecosystem, praising its maturity and speed of development.
"I think what I like, what I've seen this week, is an ecosystem where we can take it to the next level. The incubator in Shanghai is remarkable. You have all the ingredients -- you have a lot of students, you have an ecosystem where you can do basic research, where you can do pre-clinical research, where you can do clinical research, and you have a digital infrastructure that is helping to move fast. So, I'm very confident that China will continue to accelerate. And the key focus for me is what's going to be LEO's focus in that journey," said Christophe Bourdon, CEO of LEO Pharma, a global market leader in topical treatments for psoriasis.
By the end of March, Beijing was home to 332 foreign-funded R and D centers, with 55 added this year. Among them, 647 are located in Shanghai, an increase of 15 from last year, according to data from the ministry.
Recent data from surveys of senior executives conducted by global professional services firm PwC show that approximately 42 percent of multinational corporations (MNCs) plan to focus on China-based R and D for global products and services over the next two years.
"China's vast market, complete industrial system and sound innovation ecosystem are unleashing combined advantages. Foreign-funded R and D centers in China are entering a phase of accelerated growth in both scale and quality, evolving from local adaptation into global innovation hubs," said Zhao Yang, an official with the Department of Foreign Investment Administration at China's Ministry of Commerce
Foreign firms accelerate research and development investment in China
