Innovation in China: From “Factory of the World” to Global Tech Powerhouse

More News | 2025-12-10

In 2025, the Innovation Attaché Network (IAN) in China marked its 20th anniversary. The network has long been committed to strengthening innovation, research and technology cooperation between the Netherlands and China, while supporting Dutch entrepreneurs abroad. Reflecting on this milestone, Freek Jan Frerichs, Innovation Counsellor at the Dutch Embassy in Beijing, shared insights into China’s transformation into a global innovation leader and the implications for Dutch businesses.

Over the past two decades, China has evolved from an emerging innovation market into one of the world’s leading science and technology powers, Frerichs noted. When he first worked at the Dutch Consulate-General in Shanghai, China was still building its innovation base. Today, the country ranks among the global leaders in many of the same technological fields in which the Netherlands traditionally excels.

China has become a key high-tech manufacturing hub for the global economy. Highly automated and digitally advanced factories are now widespread across the country. China accounts for approximately 29 percent of global manufacturing value added—more than the combined total of the United States, Japan, Germany and India. It is currently the world’s second-largest economy, and, when adjusted for purchasing power parity, already surpasses the United States.

As China’s role in global value chains and advanced technology development continues to expand, its importance for international partners, including the Netherlands, has grown accordingly. At the same time, China is increasingly viewed not only as a partner, but also as a formidable competitor.

Dutch entrepreneurs are becoming more aware that entering the Chinese market involves risks alongside opportunities. Concerns about a level playing field, market access and intellectual property protection have become more prominent in recent years. Experience has shown that safeguarding proprietary knowledge, data security and cybersecurity is essential when doing business in China.

Frerichs stressed that companies should carefully assess whether China is the right market for their products and services, and ensure they fully understand the associated risks. Even for firms that decide not to enter the Chinese market directly, monitoring China’s rapid technological progress remains strategically important.

China’s ability to implement innovation at scale is often striking for visitors. From high-speed rail networks operating at 350 km/h, to drone deliveries, facial recognition at airports, cutting-edge electric vehicles and fully autonomous taxis, new technologies are frequently deployed in China earlier than elsewhere. As many Dutch entrepreneurs observe: “We are still talking about it, while they are already doing it.”

 

【Background】

The Innovation Attaché Network is part of the Dutch diplomatic service and operates worldwide to identify international innovation opportunities and facilitate research and development cooperation. China represents one of its most strategic focus countries.

In recent years, China has made substantial investments in green transition, digitalization and advanced manufacturing, positioning itself as a key global player in renewable energy, artificial intelligence, Industry 4.0 and the circular economy—areas that align closely with Dutch strengths in agriculture, life sciences, clean technology and high-end engineering.

 

【Conclusion】

Looking ahead, China will remain an important market and potential partner for Dutch companies, particularly in sustainability-driven and digital transformation sectors. However, the more innovative and high-tech a product is, the greater the need for robust risk management and intellectual property protection. With careful preparation and strategic partnerships, Dutch entrepreneurs can better navigate the challenges and leverage the long-term opportunities offered by cooperation with China.

 

Source: This article is based on publicly available reporting from RVO. Original link: https://www.rvo.nl/blogs/innovatie-china-van-fabriek-van-de-wereld-naar-technologische-wereldtop
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