China’s role in the global innovation economy is changing quickly.
Across sectors such as electric vehicles, robotics, autonomous mobility, the low-altitude economy and AI, Chinese companies are no longer only fast followers. In many areas, they are shaping the pace, standards and commercial models of innovation.
Yet many European businesses still view China through older frames: as a low-cost manufacturing base, a complex export market, or a source of geopolitical risk. These factors still matter, but they no longer tell the full story.
For companies making decisions about international growth, that perception gap is becoming a strategic blind spot.
To explore this shift, OCO Global spoke with two people with first-hand experience of China’s innovation ecosystem: Balz Eggenberger, founder and managing partner of Fleet Consulting GmbH, and Dr Daniel Frerichs, founder of asiapilots, who has spent many years leading innovation-focused study trips to China for European executives.
Their perspectives are different, but their conclusion is closely aligned: European companies need a more current, more practical understanding of China if they want to make informed decisions about competition, collaboration and growth.
Seeing China first-hand
For Balz Eggenberger, the shift in perception came through direct experience.
As a Swiss entrepreneur visiting China for the first time, he arrived with assumptions that will be familiar to many European business leaders. China, in his mind, was a major manufacturing economy, highly price competitive and operating according to a very different business logic from Europe.
“I had imagined office scenes with hundreds of people crammed into basic cubicles,” he said.
A visit to Tencent’s headquarters quickly changed that perception.
“Its scale and atmosphere were in no way inferior to Silicon Valley, and in some ways even better. I had not expected that.”
One of the clearest moments of realisation came during a ride in a Pony AI autonomous taxi in Shanghai. Travelling around 10 kilometres through the city with no driver in the vehicle, Eggenberger experienced something that is still largely discussed in theoretical or regulatory terms in much of Europe.
“In Europe, discussions around autonomous driving have been going on for years, with much of the debate still focused on regulation. But I was already sitting in the car. The ride was smooth, and I had no concerns. At that moment, I really understood why you have to see it for yourself. Hearing about something and experiencing it yourself are completely different things.”
For many companies, China is still understood through reports, headlines or legacy assumptions. But for business leaders who spend time on the ground, the reality can look very different.
China as a learning platform
For Eggenberger, one of the biggest lessons was that China should not be seen only as a market to enter or a place to source from. It is increasingly a place to learn from.
During the trip, he visited a government-led industrial park where local authorities proactively offered support to foreign companies, including office space, company registration assistance and wider landing services.
“That level of proactivity is extremely rare in Europe. You can really feel that foreign investment is genuinely welcome here. The role of government feels more like a service provider to companies than a regulator.”
This experience directly influenced his own commercial thinking. After returning to Europe, he began exploring cooperation opportunities with Shanghai, looking at how his experience in the European market could be combined with local Chinese resources.
“The opportunities are real. The key is to actually come in and engage.”
For European companies, this is an important point. China may not be the right market for every business, and it requires careful assessment. But companies that do not engage with the market directly may underestimate the speed at which capabilities, operating models and commercial opportunities are developing.
Beyond “China speed”
Dr Daniel Frerichs has seen this shift play out over many years.
Before the pandemic, many European companies joined China study trips with a focus on cultural curiosity, manufacturing scale and supply chain efficiency. Today, the questions are different. Senior management teams are travelling to China to understand the underlying logic driving the growth and competitiveness of Chinese companies.
“China speed” is often the phrase used to describe this, but Frerichs believes the term can obscure the more important point.
“Speed is only the result. Behind it is a completely different operating logic: R&D is oriented around market readiness rather than the endless pursuit of technical perfection; products are launched to obtain real user feedback rather than waiting until everything is risk-free; user feedback can directly enter the iteration loop rather than getting stuck at an approval stage. This is a system-level difference, not a difference in attitude.”
This is one of the most important insights for European companies. The pace of Chinese innovation is not simply a matter of ambition or work ethic. It is supported by market scale, supply chain depth, fast feedback loops and organisational models that allow products to be tested, refined and improved quickly.
During a visit to Midea, for example, participants examined how QR codes on products allow global user feedback to be gathered in real time at headquarters, then routed to R&D and after-sales teams. At Tencent, discussions with local management about R&D structures prompted participants to reflect on how leading Chinese companies operate with clear KPI structures while still preserving room for exploration, testing and iteration.
For many European businesses, these examples raise important questions. How quickly does customer feedback reach product teams? How much internal process sits between insight and action? How often are new ideas tested in market before they are perfected internally?
What this means for European companies
Ten years ago, many companies came to China to understand manufacturing scale and supply chain efficiency. Today, they are increasingly looking for insight into innovation itself.
This shift is particularly visible in sectors such as robotics, autonomous mobility, electric vehicles and the low-altitude economy. In these areas, China’s role is no longer limited to production or component supply. It is increasingly connected to the innovation chain itself.
That does not mean geopolitical, regulatory and commercial risks should be ignored. But it does mean companies relying on outdated assumptions may miss where the market, and the competition, is really heading.
The strategic question is no longer simply: should we sell to China or source from China?
It is also: what can we learn from China, where should we collaborate, and where might Chinese innovation reshape our own market?
China is not a simple market, and it should not be approached through a single lens. But for European companies, it is increasingly important to understand China not only as a place of production or consumption, but as a source of innovation, operating models and competitive insight.
The companies that engage with this reality early will be better placed to identify opportunities, assess risks and build the right partnerships.
To discuss what this could mean for your organisation, get in touch with the OCO Global team.
