Conversation with Matsushita Nakayama Masaharu: China is a Global Innovation Testing Ground, Three Core Competencies Become Key Competitive Advantages

Questioning AI · How does China’s market tolerance catalyze Panasonic’s global innovation?

Southern Finance, 21st Century Business Herald Reporter Wu Bin, Shanghai Report

An increasingly open China is becoming a fertile ground for foreign-invested companies to tap into. The 2026 government work report emphasizes deepening reforms of the foreign investment promotion system and mechanisms, ensuring equal treatment for foreign-funded enterprises, implementing a new catalog encouraging foreign investment in industries, promoting reinvestment of foreign capital within China, and expanding localized production. It also calls for strengthening services and support for foreign enterprises, enhancing the “Invest in China” brand.

Recently, at the 2026 China Appliance & Consumer Electronics Expo (AWE), Zhongshan Masaharu, CSO and President of Northeast Asia Business at Panasonic Corporation, told 21st Century Business Herald that China, a land full of vitality, is not only an important consumer market but has also been positioned as Panasonic’s “most favorable testing ground for innovation worldwide.”

Based on this, Zhongshan Masaharu emphasized that Panasonic’s Northeast Asia business in China is firmly pushing forward its strategic upgrade from “In China, for China” to “In China, for the world,” aiming to leverage the core competitiveness developed in China to benefit global operations.

China’s role for foreign-invested companies has long gone beyond a single market dimension, evolving into a complex strategic value. It’s not just about “rooting,” but about deep “symbiosis.” In this two-way pursuit, we see not only a stacking of business opportunities but also a new chapter of win-win cooperation written jointly by an open nation and global enterprises.

This year, with ongoing efforts to stimulate consumption and expand domestic demand, how to seize market opportunities brought by policies like old-for-new upgrades has become a focus for foreign companies operating in China.

The government work report states that a special campaign to boost consumption will be implemented in depth. It aims to stimulate residents’ intrinsic consumption motivation and promote policies to encourage consumption, ensuring sustained growth. It also plans to develop income-increasing programs for urban and rural residents, with pragmatic measures to increase income for low-income groups, boost residents’ property income, and improve salary and social security systems. Additionally, it will promote upgrading and expansion of commodity consumption, allocate 250 billion yuan in ultra-long-term special national bonds to support old-for-new consumer goods, and optimize policy implementation mechanisms.

Zhongshan Masaharu said that the Chinese government has introduced a series of policies to stimulate consumption, including old-for-new appliance programs, which have attracted high attention from the business community. Meanwhile, in the long term, companies need to enhance their international competitiveness and profitability.

He also looks forward to long-term measures for industrial upgrading in China, especially support policies for strategic emerging industries like AI and semiconductors. He explained that this expectation stems from dual benefits: on one hand, Panasonic can apply cutting-edge technologies like AI more broadly to its products to enhance competitiveness; on the other hand, industrial upgrading policies will further develop China’s economy and create broader market space, forming a virtuous cycle.

The wave of the silver economy also brims with unlimited potential. The government work report emphasizes the implementation of a proactive national strategy to address aging populations, expanding inclusive elderly care services, improving urban community elderly care networks, actively developing rural elderly care, and implementing subsidies for elderly care services for moderately and severely disabled seniors. It also promotes integrated medical and elderly care services, actively develops senior human resources, and formulates measures to promote high-quality development of the silver economy. Policies will be improved for elderly products, elderly financial services, and retirement tourism. The expansion of rehabilitation and nursing services will be promoted, along with the implementation of long-term care insurance systems. Care and support will be provided for seniors living alone, and those with disabilities or dementia.

Zhongshan Masaharu particularly highlighted Panasonic’s focus on health, noting that the fields of nursing, health, and elderly care in the “silver economy” show great potential. He expects more subsidies and industry support in the future, with Panasonic leveraging its products and services to create a win-win situation that aligns with China’s social development needs.

Regarding strategic thinking on starting from China to promote global growth, Zhongshan Masaharu said that since the establishment of Panasonic’s Northeast Asia Company (CNA) in 2019, Panasonic has been guided by the principle that “China’s affairs are decided in China,” continuously advancing localization reforms and achieving significant results.

From 2019 to 2024, CNA has generated over 15 billion yuan (300 billion yen) in operating cash flow. This success is attributed to three key factors: product specialization; engagement with the market, distribution channels, and customer touchpoints; and talent.

“China’s cost, China’s model, China’s speed” — Zhongshan Masaharu summarized Panasonic’s core competitiveness in China with these three words. He believes these three capabilities have been continuously refined in China’s highly competitive and intense market.

The Chinese market not only provides an “arena” to hone these abilities but also, due to its tolerance for new technologies and rapid development, has become an ideal “innovation testing ground.” Zhongshan Masaharu stated that Panasonic’s global strategy in Northeast Asia is now clearly centered on two axes: first, to push the mature product portfolio developed with “China’s cost, model, and speed” to the global market; second, to incubate and export challenging advantage products from this “test ground” overseas. Positioning China as a source of innovation and using Chinese experience to upgrade global home appliance business, providing higher-quality products and services for consumers worldwide, has become Panasonic’s clear path.

From serving China to serving the world, this strategic upgrade is not merely about capacity transfer but a systematic evolution based on successful experience in the Chinese market. Zhongshan Masaharu explained, “In China, for the world” means: leveraging China-developed products and strong supply chains as the foundation for global competitiveness, while also tailoring products to meet the needs of different countries and regions through localization.

This involves using “China’s cost, model, and speed” to build the basic functions and platforms, while customizing applications and user interfaces according to local needs. The combination of “basic platform + local customization” maximizes competitive advantage.

To achieve this, global talent mobility is crucial. Zhongshan Masaharu revealed that Panasonic will better utilize outstanding Chinese talent, not only within Asia but also by deploying Chinese professionals overseas through business trips or permanent assignments to directly participate in global market expansion.

Panasonic plans to officially launch a new business system in April 2026. Zhongshan Masaharu explained that the recent organizational restructuring is not only a change in China’s business but a major strategic reorganization of the entire Panasonic Group, redefining three key areas: supply chain management solutions, basic component manufacturing, and smart living. The new Panasonic Corporation, centered on home appliances and smart living, is expected to lead development and enhance brand value.

Under this new organizational structure, the Northeast Asia Business in China is the only regionally divided department under Panasonic Corporation, highlighting its importance. It aims not only to boost product sales but also to lead in providing “living space” value.

Zhongshan Masaharu emphasized that the deep purpose of this organizational adjustment is to break down existing organizational and business barriers, achieve cross-border collaboration, and enable Panasonic Corporation to maximize the strength of China’s robust supply chain, creating a strong foundation for global leadership. The restructured organization is designed to institutionalize the smooth and efficient empowerment of “China’s capabilities” worldwide.

As a category with frequent daily interactions with consumers, kitchen appliances are regarded by Panasonic as a key area to enhance brand value. Zhongshan Masaharu stated that kitchen appliances, used frequently by consumers, are directly related to brand recognition and consumer trust in Panasonic.

Since January this year, Panasonic has undertaken a comprehensive reform of its kitchen appliance business. The core measure is delegating decision-making, R&D, and operations to a joint team from China and Japan. This aims to significantly shorten decision cycles, respond quickly to market demands, improve efficiency, and optimize quality, ultimately delivering higher-value products to consumers.

A milestone in this reform is that Hiroshi Kawaguchi, the global head of Panasonic’s kitchen appliance business, will transfer to China starting in April. Zhongshan Masaharu said that innovation in China is at the heart of Panasonic’s kitchen appliance business, and he expects this segment to lead the “In China, for the world” strategy within Northeast Asia.