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<\/figure>\n\nThe fields appear to be interdependent because:<\/p>\n\n
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- As Chinese companies have become more competitive, the \u201cMade in China\u201d label has become easier for all companies to promote<\/li>\n<\/ul>\n\n
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- Geopolitical trends are leading to further efforts toward autonomy\u2014in other words, \u201cMade in China\u201d<\/li>\n<\/ul>\n\n
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- Regulatory requirements regarding local content can be effectively met thanks to the increased capabilities of Chinese companies.<\/li>\n<\/ul>\n\n<\/div>\n\n
For example, in the pharmaceutical and medical technology industries<\/a>, \u201cVolume-Based Procurement (VBP)<\/mark><\/strong>\u201d is mandatory in many areas. Under this system, volume-based prices are negotiated\u2014in some cases for the annual needs of entire provinces\u2014which drastically reduce the once-generous margins but also eliminate distribution tiers. Starting with the pharmaceutical industry\u2014and increasingly evident in medical technology as well\u2014local production is mandated in the relevant tenders. Companies such as the Swiss firm Straumann AG recognized <\/a>this trend early on and are focusing on production in China\u2014for the Chinese market. <\/p>\n\n
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<\/figure>\n\nOpportunities for Localization in China<\/h2>\n\n
Localizing production and R&D not only entails risks but, above all, presents opportunities: Greater proximity to customers and products and solutions tailored to customer needs can lead to even greater success in China. Furthermore, only through greater localization can companies effectively respond to the highly dynamic market in China. Experience gained in China, in turn, can be very useful in other parts of the world. <\/p>\n\n
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“China is the fitness center for our company. We’re moving at ‘China speed.'” <\/em><\/p>\n\n\n\n
(R. Holdmann, ZF Executive Board Member, Handelsblatt, July 11, 2025) <\/span>)<\/p>\n<\/blockquote>\n\n
The same was true for VW: to accelerate development in the short term, a partnership with a local Chinese company was necessary. Meanwhile, thanks to the experience gained in China, development times in Europe have also been reduced from 48 to 30 to 36 months. (Interview with R. Brandst\u00e4tter, VW Executive Board member, quoted in Handelsblatt on July 15, 2025). <\/p>\n\n
Exports from China<\/h2>\n\n
Exports from Chinese production also hold great potential: not so much to Europe or the U.S., but rather to countries that cooperate more closely with China (e.g., Belt and Road, Southeast Asia).<\/p>\n\n
Financing<\/h2>\n\n
When financing the localization, the option of using local capital sources should be considered\u2014for example, by partnering with a local investor who covers the necessary investment from their capital contribution. <\/p>\n\n
However, MRL Advisors continues to recommend that the IP owner (i.e., the core European company) should always ensure that it retains ultimate control over activities in China\u2014without running the risk of even a stalemate.<\/p>\n\n
- Regulatory requirements regarding local content can be effectively met thanks to the increased capabilities of Chinese companies.<\/li>\n<\/ul>\n\n
- Geopolitical trends are leading to further efforts toward autonomy\u2014in other words, \u201cMade in China\u201d<\/li>\n<\/ul>\n\n