China's Innovation Expansion Keeps Multinationals Invested While North America Reassesses Supply Chains

China's dual role as a sales market and R&D hub is becoming more entrenched, according to senior executives from Ericsson, Nissan, SGX Group and Canva. Their comments, published by China Daily, are a reminder that supply-chain diversification is not synonymous with China decoupling.

Introduction

China's economy grew 5 percent in 2025, reaching 140.19 trillion yuan ($20.29 trillion), and the government has set a 2026 growth target of between 4.5 percent and 5 percent. For the business leaders interviewed by China Daily, that stability is only part of the attraction. Export growth of 6.1 percent, a 19.1 percent increase in newly established foreign-invested enterprises and R&D intensity of 2.8 percent of GDP all point to an economy that remains deeply connected to global corporate investment even as Western governments pursue de-risking strategies.

Main Analysis

Ericsson China president Fang Ying said China is at the frontier of 5G deployment and network scale, and that 5G-Advanced is moving toward "on-demand customization." That evolution opens opportunities for differentiated connectivity products in which Ericsson plans to participate.

Nissan's Stephen Ma said China is still the world's largest auto market. Sales and production exceeded 34 million units in 2025, a record for the 17th consecutive year. Nissan itself sold 653,000 vehicles in China in 2025 and will introduce five more new-energy vehicle models by summer 2027. For Ma, China functions as a launchpad for Nissan's global transformation, with more than 500 suppliers tied into the company's China parts export program.

Karen Chen of SGX Group said global investor interest in Chinese assets remains strong. Cross-border investment links between China and Singapore, including ETF products and joint index development, are expanding two-way capital flows.

Canva's Kexin Wang pointed to China's AI talent pool and content-creation ecosystem. For Canva, China is both a strategic market and a source of research and development capacity.

Trade Impact

These corporate positions carry important consequences for international trade and cross-border commerce. The narrative that global supply chains are rapidly leaving China omits the extent to which China remains an export platform and a consumer market. With exports up 6.1 percent in 2025 and new foreign-invested enterprises up 19.1 percent, multinationals are still allocating substantial capital to China. That means North American companies are not simply facing competition from Chinese firms; they are competing with global firms operating out of China.

China's urbanization rate reached 67.9 percent, and total retail sales surpassed 50 trillion yuan, increasing the depth of its domestic demand. For supply chain planners, this means Chinese-manufactured goods will remain cost-effective, technologically advanced and responsive to consumer trends. The challenge for North American manufacturing is not necessarily lower labor costs in China but the coupling of Chinese production scale with global R&D capabilities.

Regional Perspective

In the United States, industrial policy is increasingly focused on rebuilding semiconductor, battery and clean-energy supply chains. The persistence of China's innovation ecosystem requires those policies to support not only factories but also process innovation, engineering talent and research translation. A tariff-only strategy will not be sufficient to overcome differences in market scale.

Canada may have an opportunity to position itself as a specialized supplier of critical minerals, energy and advanced software to North American and allied markets. Canadian companies should identify where Chinese innovation is creating new demand—for example in critical mineral processing, AI infrastructure and low-carbon energy—and build export capacity around those segments.

Mexico remains the most direct beneficiary of nearshoring within the USMCA. Yet Chinese manufacturers have also invested in Mexican industrial plants, creating a more complex supply chain picture. Mexican industrial policy will need to balance the benefits of Chinese investment with the desire to deepen North American regional integration.

For all North American governments, the key test is whether the USMCA can evolve into a platform for jointly developed advanced manufacturing, cross-border R&D and shared infrastructure, rather than simply a rulebook for tariff-free trade.

Future Outlook

Over the next three to five years, China's 15th Five-Year Plan will continue to support research, innovation and market expansion. The executive views collected by China Daily indicate that foreign companies such as Nissan, Ericsson and Canva see their Chinese operations growing in strategic importance. Nissan's commitment to launch five more NEV models in China by 2027, Ericsson's focus on 5G-Advanced customization and Canva's investment in Chinese AI talent are examples of that trend.

For North America, the period ahead will require a more sophisticated form of economic statecraft. Building supply chain resilience will involve targeted diversification, investment in advanced manufacturing and deeper trilateral cooperation on critical technologies. North American firms should also treat China as a benchmark for speed, automation and product iteration. Companies that underestimate the competitive force of China's innovation ecosystem risk losing ground in both domestic and third-country markets.

Conclusion

The China Daily roundtable is a reminder that global business decisions are not aligned neatly with geopolitical narratives. China remains a magnet for foreign investment because of its market size, supplier depth and R&D intensity. North America's response cannot rely solely on protection. It must be built on industrial competitiveness, innovation policy and trilateral collaboration—especially through the USMCA—so that the region can maintain its own center of gravity in a world where China's influence continues to expand.

Key Takeaways

• China's economy grew 5 percent in 2025 to 140.19 trillion yuan, and the 2026 target of 4.5–5 percent indicates continued policy support.
• Multinational executives still describe China as a core market, production base and innovation hub, complicating expectations of rapid decoupling.
• North American manufacturers face persistent competition from China-based production and R&D, not simply from Chinese-owned companies.
• For the United States, Canada and Mexico, the response lies in advanced manufacturing, cross-border R&D and stronger USMCA integration.
• The commercial strategies mapped out by Nissan, Ericsson, SGX and Canva suggest China will remain a central node in global supply chains through 2030.

Source: China Daily – 'China innovation powers global expansion'