By Harry Wu, 21st Century Business Herald, SFC

As China’s market continues to hold enormous potential for foreign enterprises, when asked where the next major incremental growth opportunity lies for multinationals in the country, Sjoerd Leenart, J.P. Morgan’s Asia Pacific CEO, offered a clear answer: the opportunity set is enormous, but the strategy to seize it has evolved dramatically.

“The Chinese opportunity for international companies has grown tremendously. This economy was worth 2 trillion USD 20 years ago. Today, it’s 20 trillion USD. The opportunity set is enormous, but the way to navigate it has changed over time,” Leenart said.

He pointed out that there is a significant shift away from the old model of using China as a low-cost export base. Exports by foreign firms used to account for roughly 60% of China’s total outbound shipments; today that share has dropped to 25%–30%. In its place, Leenart observes a new playbook taking hold.

“You see a lot more companies coming to China and producing in China for China, and they’re also adjusting their profiles—from bringing not only international brands, but also trying to expand into brands that are domestically more recognized,” he explained.

Beyond manufacturing, another trend is accelerating: innovation onshore. “The other thing that we really see growing is companies coming to China to do their research and development here, because there’s a tremendous amount of talent and it can be done in a very cost-efficient way,” Leenart added, underscoring that for global businesses, the Chinese growth story remains far from over.