(Yicai Global) Feb. 23 -- German cleaning equipment maker Kärcher, chemical and precious metals giant Heraeus Group and other multinational tech companies have seen strong growth in China recently despite the global supply chain crisis and worldwide economic fallout amid the Covid-19 pandemic.

Heraeus Electronics has just had its best year in China, Ai Zhouping, president of Heraeus Greater China Regional Headquarters, told Yicai Global. The Chinese market now accounts for a third of Hanau-based Heraeus’ global earnings, he said.

Kärcher has achieved average growth of more than 35 percent in China over the past two years as strict epidemic prevention controls meant the factory could resume production quickly, Tang Xiaodong, president of Kärcher Greater China, told Yicai Global.

Some 85 percent of raw materials used in Kärcher's China plant are sourced locally, making it the most localized of the Winnenden-based company’s nearly 20 factories worldwide, said Zhang Weiwei, Kärcher’s supply chain director in China.

Of those few parts that need importing, if they are in short supply or delivery times are too long, the company will find alternatives locally through its research & development center, Zhang added.

Chinese factories are also increasing their share of the global supply chain, Zhang added. Certain products originally produced abroad have come under increased demand during the pandemic and are now being made in China.

China’s foreign direct investment inflows hit a record CNY1.15 trillion (USD181.7 billion) last year, achieving double-digit growth for the first time in nearly a decade at 14.9 percent, according to Ministry of Commerce figures. High-tech industries accounted for more than 30 percent of this for the first time.

Going Local

The hiring of Chinese executives, such as Tang and Ai, instead of appointing an expatriate, has become popular among multinational tech companies in recent years as they try to improve their localization levels.

Kärcher invested CNY150 million (USD23.7 million) in 2020 to set up a sales and manufacturing headquarters in China that includes a production base for fully-automated car-washing equipment, Tang said. The firm is also considering setting up a R&D base in the country.

Dutch electronics behemoth Philips’ China division is in close communication with HQ about relocating some business HQs to China to improve local innovative abilities, Vice President Li Tao, said last November. “We will further enrich our local product portfolio in the next one to three years and cover all business areas including high-end products,” said Li.

Editor: Kim Taylor