BSH Home Appliances Group is the largest home appliances manufacturer in Europe and one of the biggest in the world. The company recently set up its biggest R&D center in Nanjing, joining the trend of foreign companies establishing up R&D centers in China.

A sod-turning ceremony initiates another ground-breaking cooperation between China and the European manufacturing industry. China actively invites international companies to set up R&D centers here.

For example, 8 out of the world top 10 pharmaceutical companies have set up R&D centers in Shanghai, bringing the total number of foreign R&D centers in the city to 407.

The investment from these centers makes up half of the city’s total R&D volume.

China is attracting global R&D centers to realize its goal of being an innovation and technology power. Why, then, do these international companies decide to set up R&D centers in China?

With China increasingly being seen as an important market, instead of the world's factory, tailored or targeted product development plans are urgently needed to explore potential markets. For example, the BSH Home Appliances Group is aiming at the emerging dishwasher and coffee-maker market in China, now considered luxury home appliances for upper-middle class families.

Abundant talent resources and favorable policies and are two major attractions.

"Nanjing city is taking advantage of its outstanding talent resources and manufacturing industry to implement innovation-driven development strategy and realize industry upgrading," said Huang Lan, Vice Mayor, Nanjing City, Jiangsu Province.

According to a Global Innovation 1000 Study from PriceWaterhouseCoopers, China ranks second in R&D investment after the US. However, the growth rate of R&D investment in the top thousand companies in China between 2010 and 2015 was 79 percent, compared to 34 percent in the US, so this statistic may soon change.