Philips Electronics, the Netherlands-based conglomerate, said yesterday that it will invest at least 40 million euros (US$50.8 million) in research and development in China next year.

The firm intends to ensure its products are innovative and will expand in emerging markets to offset declines in the developed markets which are hit by the global financial turmoil and are facing an economic downturn.

Philips has poured 40 million euros into research activities in China annually in the past years. It won't "reduce such investment" next year, said Frans Greidanus, Philips Asia's chief technology officer.

In 2007, Philips' revenue hit 27 billion euros worldwide and it set aside 6 percent for research.

In China, Philips has set up 12 research centers, including Philips Research Asia, one of the company's three top laboratories globally, which employ more than 1,000 engineers.

"Innovation is the key to help us sharpen our technology edge through competition and that doesn't change no matter what the economic environment is," said Greidanus. "The China market is essential for us in the short and long terms."

Philips' medical division is set to profit from investment in improving health care services under the central government's recently-unveiled 4-trillion yuan (US$585 billion) package to boost the Chinese economy.

(Shanghai Daily November 13, 2008)