Setting Sail on Innovation: How Chinese Startups Navigate Global Expansion

At the end of 2022, news about the Shenzhen Institute of Advanced Technology’s “group overseas expansion” sparked heated discussion, setting a positive tone for the “overseas expansion wave” in 2023.

A few months later, the Shenzhen Institute of Advanced Technology’s (SIAT) overseas expansion efforts bore fruit: Zhongke Baicheng (Shenzhen) Biotechnology Co., Ltd., incubated by SIAT, announced the formal signing of a comprehensive strategic cooperation agreement with ConvEyXO, an innovative biopharmaceutical company based in Belgium. This collaboration not only facilitates resource integration and the joint establishment of an innovative R&D center and an industrial service platform, but also promotes the global expansion of Chinese innovative enterprises.

In addition to SIAT, in 2023, the Changchun Institute of Optics, Fine Mechanics and Physics of the Chinese Academy of Sciences collaborated with Zeiss Germany to develop optical microscopes; the Institute of Chemistry of the Chinese Academy of Sciences also partnered with Mitsubishi Japan on new polymer materials...Going Global with Innovative Technologies Is Becoming a Mainstream Trend.

A staff member engaged in intermediary services for Chinese enterprises expanding overseas told Chengguo Bureau:“Chinese companies have long been expanding overseas, but what sets 2023 apart is that innovative enterprises have become the main force driving this global expansion.”

Indeed, in an era where products drive brands’ global expansion, the foundation of innovative technology is becoming increasingly critical. Some small-scale innovators possessing cutting-edge technologies have already set sail.

For instance, Beijing Beiqi Biomedicine Co., Ltd. has gained the confidence to expand into broader markets thanks to its globally unique CiPSC platform. It is reported that Beiqi Biomedicine is in discussions with multiple biotechnology and pharmaceutical companies worldwide and is poised to advance into overseas markets. Additionally, Shanghai-based Shanliang Technology is also promoting international collaborations, leveraging its proprietary microarray-real-time fluorescent amplification technology. Meanwhile, Zhongke Baicheng (Shenzhen) Biotechnology Co., Ltd., which collaborates with ConvEyXO, was established just one year ago.

These cases all reflect a fact: startups have become one of the major players in “going global,” and among them,Technological innovation has become a key benchmark for global expansion.This also reflects the rising level of innovation among Chinese enterprises.

Research universities and institutes are among the primary hubs for innovative scientific research. The overall advancement of China’s scientific research capabilities naturally reflects the enhanced strength of its research institutions. In recent years, driven by policy support and a strengthened talent pool, the original innovation capacity of China’s research universities and institutes has continued to rise.

Since 2020, the international environment has become increasingly complex. Driven by both external pressures and the demands of scientific and technological development, China has gradually intensified its investment in basic research.According to data from the State Council in 2023, China's total R&D expenditure across all sectors exceeded 3 trillion yuan for the first time in 2022, with the proportion of investment in basic research surpassing 6% for four consecutive years.

Adequate research funding not only improves the objective conditions for scientific research but also provides researchers with greater freedom to innovate and opportunities for trial and error. Furthermore, as a form of top-level design, policy carries significant influence, helping to foster a social atmosphere that values scientific research and respects innovation.

Local governments have also stepped up financial support for scientific research. In 2023, Weihai City issued the "Implementation Opinions on Strengthening Technological Innovation to Support the Construction of a National Innovative City," which emphasizes optimizing the layout of technological innovation platforms. Lead and participating units of key innovation platforms approved at the national or provincial level, such as key laboratories, technological innovation centers, and clinical medicine research centers, will be granted up to10 million yuanincentives. This has greatly motivated entities capable of conducting scientific research to engage in innovation.

In addition to policy guidance, the expansion of the talent pool is another key factor driving the rapid development of scientific research. The enhancement of talent strength stems, on one hand, from the strengthening of China’s basic scientific research capabilities, which in turn supports discipline construction and cultivates a large number of outstanding young researchers; on the other hand, China’s innovation ecosystem has attracted overseas talents to return home.

Previously, researchers mentioned in interviews, “Recently, many of my scientific research friends have chosen to return to China for their career development.”Researchers attribute this to the greater opportunities available in China.

To retain talent, research institutions and universities across various regions have provided favorable platforms and compensation packages for researchers returning to China for career development.For instance, Peking University not only offers overseas recruits a base annual salary, teaching and research positions, and a range of living allowances, but also provides researchers with research funding ranging from RMB 2 million to RMB 8 million. The Institute of Process Engineering, Chinese Academy of Sciences, goes even further, offering start-up research funding of RMB 7 million to RMB 9 million along with 200 square meters of office space for scientific research. In addition, the First Affiliated Hospital of Wenzhou Medical University offers an annual salary of RMB 2 million, while universities such as Wenzhou University of Technology, Huzhou University, Guangdong Medical University, and Guilin Medical University offer base annual salaries ranging from RMB 1 million to RMB 1.2 million.

Driven by the simultaneous improvement of objective conditions for innovation and talent capabilities, China has achieved fruitful scientific research outcomes. Meanwhile, in recent years, China’s intellectual property protection system has been progressively refined to safeguard the rights and interests of innovators, thereby further protecting the enthusiasm of researchers for innovation.

From scientific achievements to products, they still need to undergo the test of marketization, and enterprises are the ultimate destination for innovative products. In recent years, the innovation capabilities of enterprises have become increasingly prominent.

In 2021, the government began to encourage enterprisesEstablish a R&D Reserve Fund System, and provide universal fiscal subsidies to enterprises that have established R&D reserve funds. The so-called reserve fund refers to a sum of money specially set aside by an enterprise during the early stages of scientific research activities, exclusively for project R&D. This approach can effectively guide enterprises to increase R&D investment in a planned and sustained manner, thereby fostering a favorable innovation ecosystem within the enterprise.

In addition to fiscal subsidies, the government also provides policy support for corporate innovation through measures such as tax reductions and exemptions, as well as rewards for technological innovation.

Furthermore, from the perspective of corporate development, market competition is becoming increasingly intense, and consumers are placing higher demands on products.Only by enhancing their independent innovation capabilities can enterprises stand out from the crowd of competitors.Therefore, increasing innovation efforts is also an inevitable choice for corporate development.

External guidance stimulates the momentum for corporate innovation, while the strength of such innovation stems from within.Today’s enterprises have long moved beyond the “contract manufacturing” model, with many shifting their focus from “in-house production” to “independent R&D and subsequent manufacturing.” Consequently, most technology companies harbor robust scientific research teams internally, and in some cases, their founders come from scientific research backgrounds.

Furthermore, influenced by the wave of returnees, enterprises have also attracted numerous innovative talents with extensive experience in management and scientific research. These individuals bring global market perspectives and diverse management strategies to their organizations, which are then internalized as innovation capabilities, thereby enhancing corporate value.

Of course, industry-university-research collaboration is also a crucial component in enhancing innovation capabilities.

Research institutes and enterprises each have their own strengths in the process of innovative R&D, and their combination can eliminate weaknesses. For instance, while enterprises are more attuned to market innovation demands, they may lack R&D capabilities, a gap that research institutes can fill. Therefore,Pilot programs for innovation voucher subsidies are being implemented in Guangdong, Shanghai, Jiangsu, and other regions., namely, to guide micro, small and medium-sized enterprises (MSMEs) in strengthening their engagement with universities, research institutions, technology intermediary service agencies, and large-scale scientific instrument and facility sharing service platforms.

Furthermore, as enterprises enhance their innovation capabilities, scientific knowledge and achievements from the corporate sector can also feed back into the research community, creating a reverse flow.

Taking East China University of Science and Technology as an example, it adheres to the traditional model on one hand, where universities develop scientific and technological achievements that are then commercialized by enterprises through technical development and engineering applications. On the other hand, it also integrates corporate scientific and technological achievements and innovative ideas into the university, combining them with the institution’s existing technical expertise for further development.

Based on this, East China University of Science and Technology has established collaborations with multiple enterprises, including Shenergy Energy, Xilong Scientific, and Jiangsu Chuanglian, to jointly build joint research centers. This initiative not only provides companies with new solutions for the R&D of innovative medical devices and materials but also generates numerous sources of inspiration for research projects.

Through these three aspects, an innovation cycle integrating scientific research with industry has been established, enhancing the overall innovation level of the healthcare sector and ultimately driving the surge of Chinese innovations going global.

Of course, the surge in Chinese companies “going global” is not driven by a single factor; rather, it results from the convergence of favorable timing, geographic advantages, and human resources. Specific circumstances have enabled more Chinese products to gain visibility in international markets. The implementation of initiatives such as the Belt and Road Initiative has further facilitated trade between China and participating countries and regions. Meanwhile, pioneers like Mindray, BGI Genomics, and Yuwell have established strong commercial reputations abroad through high-quality products and services, thereby laying the groundwork for startups embarking on their own global expansion.

Chinese products’ presence at innovation exhibitions demonstrates that the world is witnessing China’s innovative strength. In recent years, Chinese enterprises have been frequently invited to participate in many well-known international trade shows. The influx of overseas capital into the domestic market and the preferential policies offered by investment promotion agencies across various countries all signify international recognition of China’s innovation capabilities.

But the “global expansion” of startups has only just begun, and the challenges of truly gaining a firm foothold in overseas markets may also be just beginning.