China remains open to international water companies

How welcoming is China to international businesses today?

China remains open to international businesses, although the nature of this openness has evolved significantly. As China’s economy has matured and its population has begun to age, the country increasingly prioritises sectors that contribute advanced knowledge, innovation, and long-term value.

“China has shifted from being primarily a low-cost manufacturing hub, toward a model emphasising innovation and technological development. Once known for the label, ‘Made in China’, the country is now positioning itself as ‘Developed in China’,” says de Boer.

This shift means that international companies active in high tech, environmental technologies, life sciences, and other specialised knowledge industries often find a more receptive environment.

“However, foreign companies that still view China exclusively as a cheap production location may encounter more challenges than before. Geopolitical tensions, especially in high-tech fields, have also created a more complex operating environment,” he adds.

This shift means that international companies active in high tech, environmental technologies, life sciences, and other specialised knowledge industries often find a more receptive environment.

“However, foreign companies that still view China exclusively as a cheap production location may encounter more challenges than before. Geopolitical tensions, especially in high-tech fields, have also created a more complex operating environment,” he adds.

“Nevertheless, China remains willing to collaborate with international partners who contribute meaningfully to its future development.”

What do you see as the key market opportunities?

According to de Boer, important market opportunities exist in sectors aligned with China’s national development priorities, including:

• Food and agriculture
• Healthcare and elderly care
• Water technology and water management
• Environmental engineering
• Urban redevelopment and sustainable architecture
• Energy transition and clean technologies

He explains: “China’s water sector offers particularly strong potential due to the country’s long-standing water quality challenges, rapid urbanisation, and climate-related risks.”

Below, de Boer outlines some of the current opportunities:

• Advanced wastewater treatment and reuse
  “China continues to upgrade municipal and industrial wastewater treatment plants to meet stricter national discharge standards. Technologies such as membrane bioreactors (MBR), advanced oxidation, sludge-to-energy solutions, and nutrient recovery systems are in high demand.”

• Agricultural water efficiency and precision irrigation
  “Water scarcity in northern China is driving interest in foreign expertise in drip irrigation, smart irrigation sensors, soil moisture monitoring, and digital agriculture technologies. These solutions help reduce water usage while improving crop yields.”

• Industrial water purification for high-tech manufacturing
  “China’s semiconductor, pharmaceutical, and food processing industries require ultra-pure water solutions. This creates opportunities in desalination, ultrapure water filtration, and industrial water recycling.”

• Flood control and climate resilience technologies
  “Increasingly severe rainfall and flooding events have accelerated investment in flood management tools, such as smart pumping systems, real-time monitoring, nature-based solutions, and sponge city technologies.”

• Coastal protection and salinisation control
  “Rising sea levels continue to affect coastal regions. Foreign firms with expertise in dike reinforcement, saline intrusion barriers, and coastal zone modelling offer valuable solutions.”

International companies that bring advanced expertise and demonstrate a cooperative approach continue to find substantial opportunities in China’s water-related industries.

What challenges do international companies face in China?

While China’s national direction is usually clear – driven by central government strategies local implementation can vary significantly. 

“Local authorities sometimes lack the financial or administrative capacity to fully achieve national goals, making local partnerships essential,” de Boer says, before expanding on some of the key challenges:

• Regulatory complexity and evolving compliance requirements
• Variability between national and provincial regulations
• Recruitment, retention, and long-term alignment of staff
• Differences in work culture, communication, and management style
• Careful management of intellectual property.

China offers a large, highly educated workforce and world-class infrastructure and supply chains. The main challenge often lies in retaining skilled employees, ensuring they understand and align with headquarters’ standards, and fostering cross-cultural collaboration.

The regulatory landscape for intellectual property (IP) has strengthened in recent years, reflecting China’s own need to protect domestic innovation.

“At the same time,” de Boer explains, “China’s rising middle class demands higher-quality food, daily goods, environmental standards, and public services, which creates opportunities for foreign firms offering premium solutions.”

Visible progress has been made in areas such as renewable energy, energy efficiency, and air quality improvement. However, many small and mid-sized companies still lag behind, which presents opportunities for international companies to support China’s energy and environmental transition.

How is China’s approach to international companies changing?

China remains broadly welcoming to international firms, particularly those that bring innovation, advanced skills, or technologies aligned with national priorities.

“However,” de Boer states, “there is an increasing preference for foreign companies to work with local suppliers and embed themselves within China’s domestic supply chains.”

He believes that international companies must carefully assess:

• The degree of localisation required
• Whether production should take place in China or elsewhere
• Whether products should be positioned as “developed in China” or “developed abroad”
• Whether their market focus is on China’s domestic market or international exports.

How important is it to understand local regulations and policies before entering the market?

A thorough understanding of Chinese regulations and policies is essential. Compliance rules are strict, and mistakes can lead to serious consequences. Foreign companies should therefore consult local experts, legal advisers, and sector specialists before entering the market.

“China should not be viewed as a single homogeneous market,” he explains. Adding that there are significant differences between regions in terms of:

• Regulatory requirements
• Incentives and government support
• Market maturity
• Industry clusters
• Customer needs.

“Choosing the right province or city, ideally close to key clients, suppliers, or industrial clusters, will greatly improve an international company’s chances of success.”

From your experience, what are the main benefits of operating in China?

 China offers several distinct advantages:

• World-leading infrastructure and highly efficient logistics
• Deep, integrated supply chains across most sectors
• A large, motivated, and increasingly skilled workforce
• Strong execution speed and a results-driven culture
• Collective focus on achieving shared objectives.

China’s work culture emphasises perseverance, efficiency, and rapid problem-solving. Individuals work autonomously, but with a shared commitment to collective goals, enabling companies to implement projects quickly and effectively.

“Overall, China continues to offer substantial opportunities for foreign companies,” de Boer concludes. “Especially those that align with strategic national goals, invest in long-term partnerships, and bring unique technologies or expertise, including in the water technology sector.”