A discreet ascent

Chinese companies today live a paradigmatic revolution in globalization. Armed with advanced technology, a deep culture and a valued brand, they are working to conquer a new place on the world economic scene. While the “factory of the world” is constantly renovated, the “made in China” has intelligence and imposes itself as a reference. What is the driving force of this industrial upmarket? What unique advantages do Chinese companies reveal, in particular the “hidden champions”? And what opportunities and challenges meet in a global landscape in full reconfiguration?

In his exclusive interview, Hermann Simon, a famous German economist and inventor of the concept of “hidden champion” (SME world leaders in their field but little known to the general public), believes that China is going from a low -cost production base to a world in innovation. A dynamic which, according to him, metamorphoses not only China, but also deeply influences the world.

China in the present :: For decades, the “made in China” was synonymous with low -cost production. Today, innovative Chinese companies captivate world attention. How do you analyze this fundamental change in China in global economy and innovation?

Hermann Simon: Clearly, China has operated on a radical moult, going from a low -cost production area to a source of quality products, doubled from a global innovation home. This transition is carried by massive R&D investments, allowing Chinese companies to dominate sectors such as rail, electric vehicles and e-commerce. Huawei and Byd perfectly illustrate this new deal.

However, Chinese innovation is not limited to large companies, the “hidden champions” also play a role there. You can cite Sandriver, a high -end brand of cashmere that carries the traditional technique to perfection, or Shokz, pioneer of headphones with bone conduction. These actors, who embody the innovative vitality of “hidden champions”, are proof that China is now a full -fledged creator, which dictates global technological trends and redefines the contours of industrial leadership.

Teachers and foreign students participate in the Summer Camp of the University of Petroleum in China and visit the Xiaomi automobile gigafactory in Beijing on June 30, 2025.

China in the present :: What is the driving force of this upmarket?

Hermann Simon: This dynamic is based above all on massive R&D investments and the formation of a vast contingent of highly qualified scientists and engineers. For example, Nanjing and Hefei, two cities that I recently visited, respectively occupy the 6E and 13he world ranks for their scientific production, far ahead of Berlin or Munich, which rank 27E and 28e. These data highlight the immense potential of China in terms of scientific talents and research results.

The reconfiguration of supply chains and digitization accelerate this transformation. Without forgetting Chinese consumers, more open to novelties, which make China a gigantic market and a global innovation laboratory.

China in the present: Do you think what unique advantages do Chinese “hidden champions” have in relation to their Western counterparts?

Hermann Simon: China is experiencing an abundance of “hidden champions”, especially in advanced and digital manufacturing. I identify 300 against 100 years ago. They benefit from an exceptional industrial cluster effect and are able to go to the scale at an impressive speed, which ensures them great agility and rapid marketing. I am always impressed by the speed at which the process, from invention to marketing, is managed. The Chinese excel in the integration between research and concrete applications.

China in the present: What impact the boom in these “hidden champions” has on the Place de la China in the world value chain?

Hermann Simon: By specializing in niches with impeccable quality, constant innovation and effective communication, they allow China to climb in the world value chain.

However, the construction of strong brands remains a major challenge. Among the 100 most powerful brands in the world, there are only two Chinese representatives: Xiaomi (87e) and Huawei (92e). Building a global brand requires decades of effort, as evidenced by the journeys of Japanese and South Korean brands. But the boom in these “hidden champions” proves that even SMEs, focusing on a niche market and fully operating it, can acquire international recognition. I am convinced that Chinese brands will occupy a legitimate place on the world economic chessboard.

Inauguration of the integrated ecosystem project of electric vehicle batteries in Karawang in the presence of SUBIANTO PRABOWO (v.), Indonesian president, and WANG LUTONG (1st g.), Chinese ambassador to Indonesia, June 29, 2025

China in the present: In the future, how will China ‘economic growth, driven by innovation, reconfigure the global economic landscape and the trends in globalization?

Hermann Simon: Many think that globalization is retreating, but I think it is transformed. Since 2010, we have observed a major change: global export growth has slowed compared to that of world GDP, a phenomenon that I call “relative demondialization”. Far from ringing the death knell for globalization, this evolution marks its transition to a more mature phase, where transnational trade relations give way to more local in -depth productive integration.

Take the example of Sino-German exchanges: where a German company once exported its products manufactured locally to China, it today prefers to invest directly in a Chinese factory to supply the Asian market. This trend is bilateral: Chinese Catl now operates a large factory in Germany, while Byd builds a automotive factory in Hungary.

Thus, we are witnessing a deep restructuring of world value chains. Companies are no longer content to be frequent exporters, but become players integrated into local economies. Note that current protectionist policies, without being the primary cause, act as an accelerator of this transition, pushing companies to move from exporter status to that of locally integrated operator.

China in the present: Despite remarkable achievements, what are the major challenges in which Chinese companies remain faced in the leadership race for world brands?

Hermann Simon: For me, Chinese companies still have to take up three main challenges. First, their presence on international markets remains discreet and their notoriety of insufficient brand. Second, doubts persist in certain countries with regard to the protection of intellectual property in China. Third, they come up against cultural and linguistic barriers on Western markets.

To establish themselves as real world leaders, Chinese companies must deepen their work on brand construction, strengthen their transparency and establish solid relationships. At the same time, they must develop an adaptability in the face of the growing complexity of the global geopolitical landscape. If geopolitical constraints limit their room for maneuver, they can nevertheless develop a better reading of trends and show agility in their adaptation strategies.