Fortive Corp, a global industrial technology company, is ramping up its investments and localization efforts in China, particularly targeting the manufacturing, energy, and electric vehicle (EV) sectors. This move is aimed at capitalizing on China’s rapidly evolving consumer market and its ongoing industrial transformation, according to a company executive.
Expanding in Key Sectors
Jasper Ang, President of Fortive Asia, emphasized that the company has seen significant success in core areas like manufacturing, medical, energy, and transportation within China. These achievements are being driven by China’s robust focus on innovation-driven development and its push for industrial upgrading. Fortive’s local investments align with China’s broader strategy of fostering advanced industries and technological innovation.
“While there will always be cycles of ups and downs, we see significant long-term opportunities in China, which is why we are committed to continuing our investment in the country,” said Ang during the China International Import Expo (CIIE) in Shanghai. The company views China as a critical market and plans to continue growing its operations there despite any short-term challenges.
Increasing Localization Efforts
Fortive’s localization strategy is designed to better serve the Chinese market. The company has been operating in China for decades and currently runs four manufacturing plants in Shanghai, Wuhu, and Tianjin. According to Fortive’s 2023 annual report, China represented 12% of the company’s total sales in 2023, highlighting the country’s importance to Fortive’s global business.
Fortive’s focus on local manufacturing has been growing steadily, with a larger portion of products now being produced within China to meet local demand. This move not only reflects China’s growing significance in Fortive’s global operations but also aligns with the country’s push for higher-quality production forces in the manufacturing sector.
“We will continue to accelerate our localization efforts to meet customer needs, particularly those aligned with new quality productive forces initiatives,” Ang said.
Capitalizing on China’s Industrial Transformation
Fortive sees substantial opportunities in several key sectors, including 5G, energy, and electric vehicles (EVs). At the CIIE, Fortive showcased a variety of products and solutions in these areas, many of which are already being used in China’s 5G base stations, ultra-high voltage (UHV) charging piles, and other critical new infrastructure projects.
These infrastructure projects are key growth sectors for Fortive, and the company’s products are essential to their development, including technologies for digital communications, EV charging infrastructure, and advanced healthcare.
Moreover, the company is addressing data center challenges in China, where there is increasing demand for high-speed data processing and storage. Fortive is positioning itself to support this sector’s growth by providing advanced solutions in testing, measurement, and energy management.
Favorable Environment for Foreign Investment
Fortive’s decision to increase its localization efforts comes at a time when China is rolling out more open-door policies to attract foreign investment. Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, pointed out that high-tech industries and advanced manufacturing are now among the key sectors for foreign companies investing in China. These sectors align well with Fortive’s business priorities.
The latest round of China’s opening-up measures — including a shortened negative list for market access and the establishment of additional pilot free trade zones — has created a more favorable investment environment. This has made it easier for companies like Fortive to further integrate into the Chinese market and expand their footprint.
Long-Term Commitment to China
Despite the inherent fluctuations in the global market, Fortive’s commitment to China remains steadfast. The company recognizes that its long-term success in China is contingent on understanding and adapting to the country’s evolving industrial landscape. “Our operating companies have been in the market for decades and have the experience to navigate these fluctuations,” said Ang. “We believe that any challenges we face are temporary. This provides us with valuable time to build our capabilities for the future.”
Fortive Corp’s continued investment and localization in China highlight its confidence in the country’s evolving market. With a focus on key sectors like manufacturing, energy, electric vehicles, and data centers, Fortive is positioning itself to take full advantage of China’s industrial transformation. The company’s efforts to integrate more deeply into the Chinese market are aligned with the country’s ongoing innovation-driven development strategy, ensuring long-term growth for both Fortive and the broader Chinese economy.