The final phase of China's march to global dominance

That the balance of commercial power is steadily shifting east is no secret, as western companies attracted by low labour rates and a willing workforce tap into the energy and growth of the, predominantly Chinese, market. But while companies have been importing from and outsourcing to China for some time, fewer have been tapping into the huge markets over there.

Of course, this is a generalisation, and many companies have – particularly in the high-end consumer goods, automotive and other branded goods industries. Obviously the construction, engineering and infrastructure giants have been tapping into the growth of China for many years too.

But what about viewing China as a source of leading-edge technology and innovation? Even fewer companies have done this. Indeed, many have pointed out that trying to compete with China on scale and cost alone is a pointless exercise and, instead, western businesses must differentiate themselves on technological advancement and innovation.

It seems, however, that the Chinese are catching up here too, something that Swiss technology and industrial giant Oerlikon has recognised. In opening its China headquarters in Shanghai yesterday, CEO Michael Buscher, pointed out how he sees China as providing his company with a crucial technology-based competitive edge.

“Oerlikon’s new headquarters in Shanghai also reflects how the Chinese economy has developed from a source of low cost production to a market with more developed and technology driven industries,” he said. “To benefit from this trend, Oerlikon is not only enhancing its production capabilities in China step by step with engineering know how but is also developing China as a source of new technologies to benefit its business globally.”

China’s growth is the business story of the last hundred years. But the next phase, which will see Chinese R&D facilities and innovation centres pumping out ideas and technology advancements on an industrial scale is one that threatens to reset the global business compass forever.

David Rae is editor of Procurement Leaders. To subscribe to the magazine, click here.