Commentary: Is China's technological progress achieved through the "concessions" of foreign large enterprises?

The New York Times recently published an article stating that large American companies such as Apple have "handed over" a large amount of practical technology, machinery, processes, and talent to China, providing China with "necessary resources" and "helping China gain a leading position in fields such as rare earth magnets, solar silicon wafers, steel, and pharmaceuticals." Has China's development and technological progress been "given over" by foreign large enterprises? Obviously, this is an extremely absurd and arrogant argument, which hides the loss and stubbornness of Western centralists.

Firstly, it is necessary to clarify the fundamental reasons for large multinational corporations to expand their market in China in the first place. Undoubtedly, the fundamental driving force for multinational corporations' investment and operation comes from the pursuit of maximizing profits and safety margins. They enter many developing countries by exchanging capital, technology, and management experience for large markets, low-cost supply chains, and excess profits. Multinational corporations entering the Chinese market follow the same business logic, essentially for the sake of "profit" rather than the "benefactor narrative" portrayed by some Western journalists. Of course, we do not deny the value of foreign investment bringing initial technology and management experience to China, but fundamentally, both sides are mutually beneficial. China has formed advantageous positions in many fields through the reconstruction of industrial and supply chains, many of which are cutting-edge technology strategic industries that countries must compete for. Saying that Western companies "give up" will make people laugh out loud.

Secondly, the overall logic behind the development of any economy relies on the positive interaction between its own system and the outside world, with internal factors taking precedence. Contrary to what The New York Times said, China's technological progress is not only achieved through foreign investment, but also through the strict technology export controls and entity lists imposed by certain countries, relying on the spirit of self-reliance and systematic independent innovation to "break through the encirclement". China's leading position in rare earth magnets, solar silicon wafers, steel, pharmaceuticals and other fields is mainly due to its long-term strategic investment, and through continuous research and development, technological iteration and large-scale manufacturing to reduce costs, it has formed global competitiveness. This is also the catching up law of latecomer countries.

Over the past 40 years of reform and opening up, China's economic development has achieved historic success, with the participation of multinational corporations and their contributions evident to all. But this is not enough to explain why the development of many multinational companies in China far exceeds that in other countries, and even surpasses the performance of the company locally? The answer is obviously inseparable from the favorable development environment created by China for enterprises: high-quality talent reserves, a large-scale and efficient manufacturing ecosystem, rapidly improving infrastructure and logistics supply chains, a huge and continuously growing consumer market, and the powerful policy dividends released by reform and opening up... It is precisely the unique scale advantage and huge, stable, and inclusive business environment that have created many foreign enterprises' "irreplicable" success in China.

A convincing example is that in the past two years, the concept of "China+1" was once popular, and some foreign companies attempted to transfer their supply chains out of China. However, with the changes in the global trade pattern and the continuous improvement of local production efficiency in China, more and more foreign companies are returning their supply chains to China. This fully demonstrates that institutional advantages, resource advantages, and market advantages are important factors for multinational enterprises to succeed in China, as well as the source of strength for high-quality Chinese enterprises to achieve technological breakthroughs and occupy important positions in the global industrial and supply chains.

In fact, almost all successful foreign companies in China have interdependent and mutually beneficial relationships with China. Apple Inc. has been deeply involved in China for over 30 years, creating millions of job opportunities and driving innovation in upstream industries. China has not only become a key consumer market for the company, but the efficiency and scale of its supply chain have also helped to market its products worldwide; AstraZeneca's innovative drugs benefit Chinese patients, while China's abundant clinical resources and research talents accelerate its global pipeline research and development; The cooperation between Volkswagen Germany and China has gone from achieving huge sales and market share in China in the past to jointly developing new energy vehicle models with local partners in China, truly realizing the goal of "in China, for China".

Nowadays, China is also giving back to foreign enterprises and contributing to the world through its own technological leap. Many foreign companies have continued to expand their presence in China in recent years, not only for the Chinese market, but also to get closer to China's efficient supply chain, innovation ecosystem, and engineer dividends. Through cooperation, they iterate technology together and achieve mutual empowerment. Statistics show that from January to April this year, there were over 20000 newly established foreign-invested enterprises in China, a year-on-year increase of 6.8%. Among them, more than 3000 foreign-invested enterprises have made additional investments. A long-term, stable, and predictable cooperative relationship must be mutually beneficial and win-win, and cannot be maintained by unilateral "concessions".

Ultimately, the deep integration of you and me, and me and you, is the true picture of economic globalization. Faced with the rise of protectionism and unilateralism in recent years, as well as the impact of geopolitical conflicts, China's firm commitment to opening up has become an important choice for foreign-funded enterprises seeking sustainable investment and development stability. As China upgrades from a "world factory" to a "innovation magnetic field", a high-level open China will continue to welcome enterprises from all over the world to participate in the construction of Chinese path to modernization with a "level up" attitude and share the dividends of China's high-quality development.