AI reshapes global competition and innovation; Chinese companies deepen their presence in the UK to explore new markets | Wenhai

“For many Chinese multinational companies, London remains an important hub connecting global capital with European markets,” said Sergei Guriev, Dean of the London Business School, in a recent interview with Yicai.

In recent years, with the restructuring of global supply chains and changes in trade policies, Chinese companies have accelerated their layout in the European market. As the Dean of the Business School, Guriev has closely followed the latest developments of Chinese companies in Europe.

“As a global financial center, London provides many opportunities for companies to connect with international capital markets, top investment institutions, blue-chip companies, and world-class professional service organizations,” Guriev said. “In addition, the UK, especially London, has accumulated a highly internationalized talent pool in fields such as technology, financial services, and the creative industry. Complementing this is its regulatory environment, which is widely regarded as transparent and business-friendly.”

According to data from the Ministry of Commerce, by 2025, the bilateral trade volume of goods between China and the UK is expected to reach $103.7 billion, with service trade expected to exceed $30 billion and the stock of bilateral investment nearing $68 billion.

These Sectors Are Extremely Attractive

From Chinese IP Bubble Mart to BYD and other Chinese automakers, from financial cooperation to financing offshore wind power projects, more and more Chinese companies are active in the UK market, with an increasing number of Chinese brands becoming familiar to British consumers. Data from the London & Partners show that in the past six years, the agency has supported 119 Chinese companies in developing business in London, covering industries such as creative technology, enterprise technology, green innovation, fintech, cybersecurity, and life sciences.

What impressed Guriev is that in recent years, Chinese companies’ investment models in the UK and the EU have gradually shifted from traditional mergers and acquisitions to more long-term localized operations and manufacturing. “In this process, the most successful companies are no longer just investing capital but are committed to building a complete industrial ecosystem. At the same time, as leading Chinese companies make rapid progress in technology, Europe also welcomes companies to achieve in-depth localization in regulation, talent, and partnerships,” he told Yicai.

In Guriev’s view, green technology remains an extremely attractive sector in the UK and Europe, especially in the fields of electric vehicles and renewable energy supply chains, as European governments have consistently prioritized decarbonization and energy transition. Meanwhile, artificial intelligence and robotics also show strong growth potential, with applications rapidly expanding in industries such as e-commerce, logistics, education, and finance.

Furthermore, Guriev emphasized that the UK and Europe are home to many of the world’s top universities and research institutions, providing ample opportunities for Chinese companies to expand cooperation in innovation, talent development, research collaboration, and technology commercialization.

In mid-last year, the UK government officially launched the Modern Industrial Strategy, focusing on eight key high-growth potential industries over a ten-year cycle, including advanced manufacturing, clean energy, digital and technology, creative industries, professional and business services, life sciences, finance, and defense, aiming to create a more resilient, innovative, and inclusive economic system.

For Chinese companies planning to invest in the UK, Guriev advises that they should not only focus on market access but also emphasize long-term local integration. “This means proactively building industry partnerships, establishing transparent governance structures, and continuously investing in local talent and R&D capabilities. Those companies that can genuinely integrate into the local innovation ecosystem will find it easier to gain the trust of regulators, partners, and consumers, thus achieving sustainable long-term success,” he analyzed.

Chinese Innovation Must Overcome These Two Major Challenges

In recent years, the driving force behind China’s innovation development has impressed Guriev. He believes it primarily comes from three mutually reinforcing, empowering forces: the first is scale advantage, as China’s vast domestic market can support rapid technological experimentation and large-scale application; the second is industrial depth, as the new generation of digital technology is rapidly integrating into the manufacturing system; the third is the fierce competition driven by entrepreneurial spirit, pushing companies to continuously innovate technologically. “It is this combination of three forces that has allowed technology companies like Huawei to grow from technology followers to today’s global technology leaders,” he stated.

Guriev also paid special attention to this year’s government work report. He told Yicai that through the report, he sees that over the next decade, China’s innovation model will be driven by cutting-edge scientific research, large-scale application of digital technology, and the construction of a globally competitive technological ecosystem. “China’s ultimate goal is to transform from the ‘world’s factory’ to a global innovation center.”

To build a “global innovation center,” Guriev stated that China’s next phase of innovation development will depend more on openness and accessibility, with two major challenges being particularly critical.

The first is to streamline the conversion chain from basic scientific research to breakthrough technologies. He explained: “China has made significant progress in applied engineering, but maintaining long-term leadership in cutting-edge fields such as biotechnology and next-generation computing will ultimately require sustained investments in basic research and its commercialization capabilities. Accelerating this transition hinges on further enhancing deep collaboration between top universities, research laboratories, and industry.”

The second challenge is to maintain a deep connection with the global knowledge network. “The most innovative economies, such as those in the UK, the US, and continental Europe, all benefit from international research collaboration, free movement of talent, and the continuous nourishment provided by open academic systems. Ensuring that Chinese researchers, universities, and enterprises continue to integrate into these global innovation ecosystems will be crucial to maintaining innovation momentum,” Guriev said. In promoting academic exchange and innovation cooperation between China and foreign countries, the London Business School has established strategic partnerships with universities such as Tsinghua University and Fudan University in China.

AI Helps Chinese Companies Go Global

Currently, the development of innovation cannot be separated from the dynamic drive of artificial intelligence (AI). Guriev told Yicai that the most prominent feature of China’s AI ecosystem is the speed and scale of technological implementation in real-world scenarios. In his view, the recent development of large language models (LLMs) exemplifies this trend well, such as systems developed by companies like DeepSeek, particularly the latest version, which demonstrates that Chinese companies are rapidly closing the gap in cutting-edge AI research while also focusing more on efficiency enhancement, cost optimization, and practical deployment capabilities. “The continuous improvement of model capabilities combined with engineering implementation is gradually reshaping the competitive landscape in the field of artificial intelligence.”

Regarding the differences in development in this field between China, the US, and Europe, Guriev believes that the US still dominates the global forefront of AI research, with representative companies including OpenAI, Google DeepMind, and Anthropic; whereas Europe focuses more on regulatory frameworks and ethical governance, such as the EU’s Artificial Intelligence Act, which is an important initiative.

“China’s core advantage lies in the industrial application layer. Artificial intelligence is widely applied in manufacturing systems, logistics networks, supply chains, and large digital platforms. Leveraging China’s vast industrial base, companies can deploy machine learning technologies on a large scale in smart factories, predictive maintenance systems, and automated production environments. This depth of application and scale is difficult for many other countries and regions to replicate,” he stated.

Guriev believes that in the future, AI will fundamentally reshape management work, from daily data analysis and trend forecasting to parts of corporate strategic planning. Therefore, the core competencies of future managers will shift more towards leadership, judgment, creativity, and ethical decision-making capabilities. He introduced that the London Business School recently launched the Data Science and AI initiative, aimed at bridging the gap between the rapid advancement of AI technology and its effective and responsible application in business and society.

He also mentioned that companies expanding their business in the UK and Europe need to cope with complex supply chain systems, diverse consumer groups, and increasingly complicated regulatory environments, where AI can play a key role.

In Guriev’s view, the Chinese companies that will stand out in the global market in the next decade will be those that combine industrial capabilities with AI-driven decision-making and promote development through partnerships with local research institutions, tech companies, and financial centers. “AI capabilities are rapidly transitioning from a technological option to a strategic necessity for business development.”

(This article is from Yicai)