Tapping potential of high-level opening-up

Multinationals’ capacity to embed breakthroughs into sustainably functioning institutional and industrial systems needs to be leveraged

In recent years, new quality productive forces have been emphasized in China’s economic narratives, emerging as a key term in discussions of high-quality development. First proposed in 2023 and systematically elaborated in 2024 amid an accelerating new round of technological revolution and industrial transformation, the concept embodies China’s economic transition from factor and scale-driven growth to a model that prioritizes quality, efficiency and sustainability.

The development of new quality productive forces is shaped by the effective integration of digital technology into the broader industrial system so as to generate sustained multiplier effects. In short, the crux is not merely the volume of capital invested or the number of projects launched, but whether new technology can be standardized, scaled up and internationalized.

Multinational corporations have a significant role to play in nurturing new quality productive forces. Their core value stems from their comprehensive capacity to embed technologies into global rule systems and industrial organizational structures. In strategic emerging fields, such as green and low-carbon development, international standards and certifications directly shape market access thresholds. With deep experience in standard-setting, compliance certification and supply chain traceability, multinational corporations can support Chinese innovations in moving from “producible” to “globally acceptable”.

Meanwhile, their mature global customer networks, channels and brand credibility allow technologies and products to penetrate global markets with less friction and realize scaled diffusion. More importantly, the development of new quality productive forces typically involves long research and development cycles and high uncertainty. Multinational corporations’ mature models for industrial integration and joint R&D risk sharing, paired with their long-term expertise in R&D management, quality systems and global talent cultivation, represent sustainable organizational capabilities that provide essential institutional, organizational and capital support for the development of new quality productive forces.

However, in practice, these strengths do not always translate smoothly into tangible progress.

In attracting foreign investment, some local governments still prioritize short-term indicators such as the scale of investment, pace of project implementation and tax revenue contributions. Meanwhile, systematic mechanisms to fully absorb and institutionalize the core strengths that foreign-invested enterprises can offer — including deep engagement in global standard-setting, robust compliance systems, advanced supply chain governance capabilities, global market access and long-term patient capital support — are often lacking.

As a result, even as projects are successfully launched, the value chain connecting technology to standards, scaling up through application scenarios and international dissemination, often remains fragmented. This makes it difficult to turn such practices into industry-wide institutional know-how or replicable models of industrial organization.

Experience drawn from a range of cross-border cooperation projects demonstrates that when collaboration is confined to purchasing equipment, importing production lines and conducting general trade, advancement often hits bottlenecks rapidly.

By contrast, when core institutional elements — including corporate governance structures, compliance frameworks, data and intellectual property protection mechanisms, mutual recognition of international certifications and standards, and risk and revenue sharing arrangements — are thoughtfully designed and established, collaboration proves far more stable, efficient and sustainable. This “governance-first” approach provides the enabling support necessary to foster new quality productive forces.

To translate the core competency of multinational corporations into replicable drivers of new quality productive forces, three things are needed.

First, a “scenarios+standards” approach to catalyze innovation and translate technological routes into industrial pathways. For new quality productive forces, it is critical to build a verifiable, iterative and replicable application loop. Local governments can leverage open application scenarios, public procurement and pilot demonstrations to validate new technologies in real-world settings. At the same time, deeper alignment and mutual recognition with mainstream international standards can enable technological achievements to be gradually formalized into practice-based standards, driving scalable adoption and global acceptance. This propels innovations from “merely usable” to “internationally recognized, tradable and exportable”.

Second, a strengthened and refined consortium model to boost collaborative efficiency and replicability. Cooperation in the form of consortiums should be encouraged among multinational corporations, leading Chinese enterprises, research institutions and local platforms. Key provisions governing intellectual property arrangements, data and compliance frameworks, certification and traceability mechanisms, and risk-revenue sharing should be designed and put in place upfront, to avoid adjustments in the middle and later stages of project implementation. In addition, more sophisticated project management systems — with explicit annual objectives, key milestones and formal acceptance criteria — should be adopted to strengthen oversight and accountability.

Such structured consortium arrangements can fully leverage foreign-invested enterprises’ governance and risk management expertise, converting ad hoc project-based cooperation into replicable, scalable organizational models.

Third, institutional opening-up to enhance policy predictability and establish regular, high-quality communication channels. More stable expectation-management mechanisms should be explored, and institutionalized communication channels established to improve the quality and efficiency of policy interpretation and feedback. Concurrently, the exchange, training and accreditation of high-caliber professionals with a sound grasp of China’s national conditions and international corporate governance norms should be systematically strengthened so as to build a robust talent support system.

This would lay a solid foundation for the attraction of high-quality investment and talent, and the establishment of robust standards and supply chains.

Competition in new quality productive forces is not merely a technological race, but an integrated contest of capabilities spanning technology, rules, organization and talent. Technological breakthroughs are only the starting point. What will ultimately determine success is the capacity to embed these breakthroughs into sustainably functioning institutional and industrial systems.

The strengths that multinational corporations offer are precisely these “invisible yet decisive” foundational capabilities. Only by tapping the full potential of higher-level opening-up, through the organic integration of multinational corporations’ expertise with China’s comprehensive industrial system can the full potential of new quality productive forces be unlocked.

The author is the part-time vice-president of the China Association of Enterprises with Foreign Investment, the managing director and the CEO for Greater China at the Australian Capital Equity.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.