US companies leverage China's market, supply chain, innovation boom

An aerial drone photo taken on Nov. 30, 2023 shows a view of the Boeing Tianjin Composites Co., Ltd. in north China's Tianjin Municipality. [Photo/Xinhua]

As a barometer of global economic shifts and industrial transformation, the 2025 Summer Davos Forum held in north China's harbor city of Tianjin has drawn renewed attention to the country's evolving role in the world economy.

Fueled by its comprehensive industrial chain, vast market potential, skilled talent pool and thriving innovation ecosystem, China remains a draw for global manufacturers seeking long-term growth opportunities.

"China is an extraordinarily important supplier of goods and services to the rest of the world and a vital market for commodity producers and other industries globally," said Jeffry A. Frieden, a professor at Columbia University in the United States, at the forum.

Dozens of km from the Summer Davos venue lies Tianjin's Binhai New Area, where many U.S. companies operating there have firsthand experience with these advantages.

According to a report published by the Hurun Research Institute in February, the surveyed U.S. companies saw their China market revenue grow at a compound annual rate of 12 percent between 2020 and 2023, 1.3 times their global average.

The report noted that these firms remain upbeat about China's long-term growth prospects, with many continuing to deepen their footprint in the country.

According to the 2025 China Business Climate Survey Report released by the American Chamber of Commerce in China this January, 53 percent of the surveyed U.S. companies plan to increase their investment in China in 2025, with nearly 70 percent of the respondents in the consumer sector aiming to scale up.

This confidence is mirrored in specific industries where market upgrades are creating new waves of opportunity. One such beneficiary is U.S. elevator giant Otis.

"The Chinese market is core to Otis' global strategy," said Sally Loh, president of Otis Greater China.

The Chinese elevator market has tremendous growth potential with over 11 million elevators in operation. And a surge in demand is already in sight, driven by modernization efforts across the aging housing.

In February last year, the Chinese government unveiled an action plan to promote trade-ins of consumer goods, backed by ultra-long-term special government bonds, also to support elevator renewal in aging residential communities.

By the end of 2024, more than 900,000 elevators across China had been in service for over 15 years, and that number continues to rise, according to the State Administration for Market Regulation.

"We continue to ramp up R&D investment in China and are strongly committed to supporting the country's high-quality development," Loh added.

For more U.S. firms, the decision to stick with China isn't just about demand, it's about access to one of the world's most comprehensive and resilient industrial supply chains.

With its 41 major industrial categories, 207 intermediate categories, and 666 small categories, China is the only country in the world to encompass all industrial categories in the United Nations Industrial Classification, offering an unmatched advantage in terms of industrial and supply chain capabilities.

Honeywell's Building Automation factory in Tianjin offers a vivid example.

Just inside the workshop, rows of smart shelves are neatly stocked with hundreds of parts. Each item's weight is digitally tracked and synced in real time with local suppliers.

The moment inventory dips below preset thresholds, restocking is triggered automatically, streamlining efficiency and minimizing delays.

"China not only boasts a vast market for developing and applying new technologies," said William Yu, president of Honeywell China. "But its robust industrial chain, from basic manufacturing to high-end components, ensures that innovation can be implemented faster."

The Boeing Company, an aviation giant, has tapped into this network as well. Its joint venture, Boeing Tianjin Composites Co., Ltd., established in 1999, is the largest production base of composite materials in the Boeing supply chain in China. Its products cover all Boeing commercial aircraft models.

Daniel Park, general manager and CEO of Boeing Tianjin Composites, noted that China boasts a relatively complete aviation industry supply chain, with 50 percent of the production materials at the plant sourced from domestic suppliers.

"Tianjin-produced Boeing components are widely recognized for their exceptional safety and quality standards within Boeing's global supply network," Park told Xinhua, attributing this to China's highly skilled industrial talent -- an advantage he described as unique within Boeing's worldwide operations.

As China pursues high-quality development and new quality productive forces, its innovation engine is gathering speed. In 2024, the country's total spending on research and development reached 3.61 trillion yuan, up 8.3 percent year on year, maintaining its position as the world's second largest.

Zhang Yansheng, chief researcher of the China Center for International Economic Exchanges, noted that for quite some time, U.S. companies' investment strategies in China have focused on product manufacturing and operational management. "However, a more comprehensive, full-chain localization strategy, spanning from production investment to research and design, is now emerging as the dominant trend."