When IDC CEO Lorenzo Larini chose China as one of his first major destinations as a new chief executive, he wasn’t following a script. He was reading the data.
Four months into his tenure, Larini is heading to Beijing to see firsthand what IDC’s analysts have been tracking for years: a market in a fundamental shift that most Western executives are still processing from a distance. He asked to meet with robotics companies. He wanted to see the technology himself. For Kitty Fok, IDC’s Managing Director in China and a 20-year veteran of the market, that instinct signals something important.
“The energy in China right now, the innovation, the change since COVID, it is something very different from six years ago,” says Fok. “I really want him to feel that after his visit.”
If your mental model of China was formed before the pandemic, it is time for an update.
What does it mean that China is now a technology innovation engine?
China is no longer just the world’s manufacturing center. It is one of the most active technology innovation markets on the planet, and the products, platforms, and business models coming out of China are already reshaping global competition.
That transformation was built on three structural forces IDC has tracked across its 77 dedicated China research programs: the scale of China’s manufacturing base, the size of its domestic population and the demand it generates, and the external pressures that have pushed Chinese companies to build solutions from the ground up.
“It starts with hardware,” says Fok. “China is the biggest manufacturing center in the world, and because of that ecosystem, it creates the demand. That demand creates the opportunity to innovate.”
Chinese vendors now lead globally in smartphones and electric vehicles. Robotics is where this next wave becomes impossible to ignore. IDC’s newly launched research on embodied intelligence projects China’s robotics market growing from $1.4 billion today to $77 billion in five years. That is 94% compound annual growth, every single year. Chinese robots are already shipping to Asia Pacific, Europe, and North America. This is not a future trend. It is already happening. And when you build for a billion people first, export follows naturally.
Now look at the software layer. Alibaba built one of the most sophisticated e-commerce and logistics networks in the world. TikTok changed how a generation consumes content. And last year, DeepSeek moved global markets. Not because it was built with the most advanced compute infrastructure available, but because it was built without it.
“We couldn’t get enough GPU from Nvidia because of restrictions,” says Fok. “So we had to change. DeepSeek happened because we didn’t have enough compute power. We had to innovate and create a different algorithm.”
Necessity is a very effective R&D strategy. Western companies not watching this closely are working from an increasingly incomplete picture.
What is the Belt and Road Initiative and why does it matter for global business?
China’s innovation story doesn’t stop at its borders. That’s where the Belt and Road Initiative comes in.
Modeled on the ancient Silk Road, it is the Chinese government’s coordinated strategy to help Chinese companies expand globally. In practice, the government establishes diplomatic relationships in target markets, state-owned enterprises move in first and build infrastructure, and private Chinese companies follow with a path already cleared.
“The government itself is meeting with governments along the Silk Road, creating a better environment,” says Fok. “The state-owned enterprises set up infrastructure. Then all the other Chinese companies can go along with that.”
The result is a wave of Chinese companies entering markets in the Middle East, Africa, and Europe that operate differently from what Western incumbents are used to: greater pricing flexibility, faster customization, and business models most Western companies haven’t encountered before. If you sell into those markets, you have new competition. If you want to reach Chinese enterprises expanding globally, they are actively looking for IT partners who understand their destination markets. Both are opportunities most Western companies haven’t fully accounted for.
What Western companies get wrong about China
The most common mistake IDC has observed across decades of working with multinationals is treating China as a sales geography rather than a distinct market.
“The first mistake is assuming that anything that works in the US can sell in China,” says Fok. “I have seen American companies translate their product catalog into Chinese and hope that it will sell. It does not work like that.”
China is a hardware-centric market. Even security companies need to sell appliances, not just software. When AI arrived, buyers expected AI devices alongside AI services. The product, the messaging, and the go-to-market approach all need to be built for the market, not translated into it.
The second mistake is chasing the wrong benchmark. The competitive density in China is real, but a multinational doesn’t need to win it all.
“You do not need to be number one,” says Fok. “There is a significant share available. You just need some share. It is big enough. You cannot ignore the second-largest economy in the world.”
The key is finding the right slice. IDC helps companies identify their real addressable market in China, not the theoretical total, but the segment where a multinational can realistically compete and win.
What does IDC uniquely offer for China strategy?
That ground-level intelligence is what IDC has been building for approximately 40 years in China. IDC was the first foreign company to receive a media license in the country. Kitty Fok has spent 20 of her 30 years at IDC working in the Chinese market.
Today, IDC operates 77 dedicated China research programs and has more than 70 analysts based in China. IDC’s nearest Western competitor has roughly 20. That presence matters because China is not a single market. Its provinces operate at different levels of maturity, its industries are distributed unevenly, and understanding which segment is addressable for a foreign company requires people talking to buyers and vendors every week, not a global report applied from the outside.
“Sometimes we need to talk to the headquarters of a multinational to help them understand why China needs a different strategy,” says Fok. “Why it needs to be more than a sales office. That conversation requires local knowledge, not just market data.”
IDC’s China intelligence works in both directions: helping Western companies enter China with the right strategy, and tracking how Chinese enterprises are expanding globally so Western companies in those markets know what’s coming.
The signal in Larini’s visit
Which brings the story back to Lorenzo Larini.
Japan and China are the two largest single markets for IDC in Asia, and Larini is visiting both within months of taking the role, alongside IDC CFO Tiziana Figliola.
He’s not just scheduling meetings. He is looking to meet with robotics companies and see the technology firsthand.
According to Figliola—who lived and worked in China prior to becoming CFO at IDC— making this visit with Larini is a signal of how seriously IDC is weighing China as a driver of its next phase of growth. “What Larini will find is not the China of 2019. The technology is different. The competitive landscape is different. The pace of change is different in ways that are hard to appreciate without being there,” said Figliola.
For Fok, Larini’s visit matters beyond IDC. Since COVID, many Western executives have quietly stepped back from China, and a six-year gap in direct engagement is a long time in a market moving this fast.
“A lot has changed,” she says. “I really want him to feel the differences, all the innovation, all the change. That is what I want every senior Western executive to experience.”
That is the invitation for any Western executive weighing a China strategy. Come and see it. And when you are ready to act on what you see, make sure the intelligence behind your decisions comes from people who have been watching this market for decades.
IDC has 70 analysts in China right now. The data is there. The question is whether you are ready to use it.
