Germany's century-old materials science company Henkel officially inaugurated its Adhesive Technologies Innovation Experience Center in Shanghai's Zhangjiang High-Tech Park on Sept 22. With a total investment of about 500 million yuan ($70 million) and over 500 scientists on-site, this base has become Henkel's second-largest innovation center worldwide, after its headquarters in Germany.

Henkel's move is not an isolated case. From BASF's integrated base in Zhanjiang focusing on new energy materials R&D to Tesla's upgrade of its Shanghai R&D center into a global engineering and technology hub, multinational giants are collectively transforming China from a manufacturing base to a core node of global innovation. As Anna, president of Henkel Greater China, noted, the Chinese market has evolved from being a manufacturing hub to an innovation engine. This strategic shift underscores China's transformation from a global investment hotspot into an innovation hub that multinationals must compete for.

Innovation and manufacturing strength underpin global industrial pillars

China's position as an innovation hub is underpinned by its dual strengths in innovation and manufacturing. During the 14th Five-Year Plan (2021-25) period, China's manufacturing value-added grew from 26.6 trillion yuan to 33.6 trillion yuan, an increase of 8 trillion yuan, accounting for nearly 30 percent of the global total. China's overall manufacturing scale has ranked first globally for 15 consecutive years. Among the world's 504 major industrial products, China leads in the output of most, providing critical support to global supply chains in everything from home appliances to new energy components.

Sustained increases in innovation investment are further accelerating the transition from the "world's factory" into a "global innovation lab". Over the past five years, the R&D expenditure of large-scale manufacturing enterprises has exceeded 1.6 percent of their revenue, with more than 570 Chinese industrial companies ranking among the global top 2,500 in R&D investment. By 2024, China had established 33 national-level manufacturing innovation centers, achieving breakthroughs in 672 key technologies and transforming 690 technological advancements into practical applications. The combination of a vast consumer market, complete industrial chain, and rapid market feedback mechanism has made China the fastest testing ground for new technologies and iterations.

Chinese brands breakthrough multiple fronts, reshaping industry landscapes

Today, Chinese innovation has progressed from single-point breakthroughs to full industrial chain coverage, achieving leaps in multiple fields. In high-end manufacturing, China accounts for half of the global output of industrial robots, with the localization rate of core components rising from less than 30 percent to over 60 percent, breaking long-standing foreign monopolies.

The rise of the new energy vehicle industry has set a global benchmark. In the first half of 2025, China contributed 62 percent of global NEV sales, with domestic manufacturers capturing nearly 90 percent of the market share. This advantage stems not only from market scale but also technological innovation — from BYD's blade battery to CATL's Kirin battery, Chinese companies have continuously broken new ground in core metrics such as energy density and safety of power batteries, accelerating the global adoption of NEVs, which is projected to reach 40 percent by 2030.

In the consumer sector, companies like the leading maternal and infant brand Babycare are redefining industry standards through demand-driven innovation. From precise urine indicator technology in diapers to the use of eco-friendly materials in baby products, Chinese brands are anchoring innovation in user needs, driving technological upgrades in niche segments.

Michael Harwell, global vice-president of innovation for consumer goods adhesives at Henkel, noted that while many technologies were once developed elsewhere and later introduced in China, Chinese brands are now linking to the globe with their quality and innovation capabilities, becoming trendsetters.

Henkel and Babycare exemplify the global impact of Chinese innovation

"In terms of innovation capability and development potential, Babycare is undoubtedly a strategic client that Henkel deeply respects," said Michael. "From the start of our collaboration, we observed their acute sensitivity to consumer needs, rapid iteration of product innovations, and unwavering commitment to high quality. This spirit is admirable and aligns perfectly with our innovation philosophy focused on efficiency, consumer experience and sustainable development."

The in-depth collaboration between Henkel and Babycare is a quintessential example of the "Chinese demand drives innovation, global sharing of outcomes" model, breaking traditional supply chain logic. As a Chinese brand deeply rooted in the maternal and infant market, Babycare, drawing on its profound understanding of Chinese babies' sensitive skin and detailed parenting scenarios, proactively proposed R&D directions to Henkel, such as precise urine indicators and odor neutralization.

Addressing the core needs of Chinese families, Henkel dedicated R&D resources to jointly develop a urine indicator that accurately distinguishes between air humidity and urine, featuring a three-stripe design that allows caregivers to easily assess usage. Furthermore, Henkel and Babycare jointly tackled maternal and infant needs, such as the "diaper odor management project", which has achieved multi-layered breakthroughs — from low-odor hot melt adhesives to overall odor neutralization, exploring ways to reduce urine odor for babies. Such innovations from the Chinese market are now feeding back into Henkel's global operations, supporting upgrades to its products worldwide.

Babycare's supply chain strategy further highlights the innovation leadership of Chinese brands: it collaborates with nearly 20 global materials giants, including Henkel, Lycra and 3M, to establish a co-creation system of "demand definition — joint R&D — global application". A single diaper must pass 2,338 safety standard tests, covering cross-verification against multiple standards from China, the US and Europe. This model of "Chinese demand sets the questions, global resources provide the solutions, and outcomes are shared globally" vividly embodies the value of China's innovation ecosystem.

China's innovation hub reshapes the global ecosystem

The "two-way street" of foreign investment amplifying Chinese innovation and Chinese brands going global is reshaping the global innovation landscape. Henkel's closed-loop system of "innovation — pilot testing — manufacturing — application" in China — from the Shanghai Innovation Experience Center to the Yantai high-end factory and the Dongguan application technology center — demonstrates foreign companies' deep recognition of China's innovation ecosystem. Meanwhile, Chinese brands like Babycare, through co-creation with global giants, not only enhance their competitiveness but also provide multinational corporations with innovation inspiration and market access.

This resonance effect accelerates China's transition from a "manufacturing center" to an "innovation center", building a new global innovation ecosystem. China is no longer a passive technology recipient but a key node in the global innovation network—attracting global resources for local innovation while feeding local innovations back to the world. As the business environment continues to optimize and the innovation ecosystem improves, "Chinese innovation" will undoubtedly inject more momentum into the global economy, offering unique "Chinese solutions" to challenges such as global industrial upgrading and sustainable development.

(Source: China Daily)