The new rubber plant of German manufacturer Lanxess AG in Changzhou, East China's Jiangsu Province Photo: Courtesy of Lanxess AG
 

The new hearing aid manufacturing center set up by German manufacturer Sivantos Group in Suzhou, Jiangsu Province Photo: Xie Jun/GT

 

Several international manufacturing companies are expanding in the Chinese mainland by setting up new plants, a move that could lend support to industrial upgrading in China, experts noted on Sunday.

Those companies include hearing aids manufacturer Sivantos Group, which was formerly a division of German engineering giant Siemens AG. On Friday, Sivantos opened a new hearing aid manufacturing center in Suzhou, East China's Jiangsu Province.

The center will be the company's largest manufacturing base for custom-made hearing aids, Siemens Hearing Instruments (Suzhou) Co said in a press release obtained by the Global Times on Friday.

Another German manufacturing company, the specialty chemicals manufacturer Lanxess AG, inaugurated a new ethylene propylene diene rubber plant in Changzhou, also in Jiangsu Province, on Tuesday.

Lanxess has invested 235 million euros ($263 million) in the plant, the largest investment the company has made in China to date, according to a press release Lanxess sent to the Global Times Wednesday.

These plants are being launched at a time when China's manufacturing industry is experiencing some turbulence amid the nation's broader economic difficulties, and many overseas manufacturing companies have relocated their plants from China to other countries because of rising costs and falling profits.

However, China is still proving to be a big attraction for international manufacturing giants such as Lanxess and Siemens.

"It is said that some emerging economies have lower costs than China. But it's not only about costs. It's about productivity and quality that we care the most. For the best balance, I believe China is the best country to set up plants in compared with other places," Roger Radke, CEO of Sivantos, told the Global Times on Friday.

Matthias Zachert, chairman of the board of Lanxess, told the Global Times on Tuesday that although China's economy is facing downward pressure now, Lanxess still has faith in the  "long-term prospects and prosperity" of the Chinese economy.

"We aren't coming to Changzhou for one year or three years. We're coming for 10 years, 20 years or even longer," Zachert told the Global Times. 

Zachert also said the company has an "open attitude" toward merger and acquisition activity in China.

Overseas manufacturers' investment in China can help boost industrial upgrading in multiple ways, experts noted.

A senior executive surnamed Li at a Chengdu-based manufacturing plant under German engineering enterprise Bosch Group told the Global Times on Sunday that overseas manufacturers can help local industries by unveiling advanced technology during their expansion in the domestic market, although more and more companies are avoiding such activity.

Li said that domestic manufacturing companies can also learn from overseas manufacturers on perfecting the production process, such as by creating a good working environment.

According to Radke, Sivantos wants to stimulate workers' creative thinking by establishing a good production environment, including using natural light to create a brighter working environment, installing a special dust-removing system for environmental protection and designing custom-made working desks to enhance productivity.

Overseas companies' investment in China could also enhance domestic industrial upgrading by reforcing regional industrial competitiveness.

Han Jiuyun, vice mayor of Changzhou, was quoted by the Lanxess press release as saying that more than five major overseas chemical companies have opened plants in his city, which is boosting the "centralized development" of Changzhou's chemical industry. 

Data from the Ministry of Commerce issued on August 19 showed that foreign direct investment in China climbed 5.2 percent year-on-year to 50.55 billion yuan ($8.22 billion) in July.