Buoyed by the strong economic prospects in China, German science and technology firm Merck Group is planning to set up a slew of innovation hubs and acceleration projects for grooming startups in China, a top company official said.

The Shanghai innovation hub, which was opened on Friday, together with an ensuing one in Guangzhou next month, is a clear indication of Merck's strong ties with the dynamic Chinese innovation ecosystem, said Stefan Oschmann, chairman and CEO of Merck Group.

"China will definitely be the largest economy in the world (in the future)," Oschmann said after the launch ceremony in Shanghai. "And this is not only based on China being so big and having such a (huge) population. It is also based on values and cultural elements in Chinese society."

The company said it will inject a 100 million yuan ($14.1 million) seed fund targeting startups in China, fostering innovation in realms across healthcare, life sciences and performance materials, all of which are closely related to Merck's core and relevant businesses.

Teaming up with Merck's corporate strategic venture arm M Ventures, the company intends to invest in Chinese seed-stage companies with individual investments ranging between 5 million yuan to 10 million yuan. The seed investment is meant to help the startups reach the next value inflection point within 18-24 months.

The 1,000 square meter hub in Shanghai was initiated by a dedicated innovation team last year and has kicked off partnerships not only in the three Merck innovation fields but also in AI-enabled health solutions.

Apart from financial injection, Merck is also planning to provide training during the three-month incubation period and looking to offer industry cooperation opportunities and next-phase of grooming in the future, said Sun Zhengjie, managing director of Merck Innovation Hub China.

The two innovation hubs are set to play roles for joint development with different focuses. The Shanghai facility targets primarily biotech research whereas the Guangzhou one will focus on innovative technologies and promote business growth in the strategic markets of the Guangdong-Hong Kong-Macao Greater Bay Area.

"Together with Chinese partners, be they from the government, academia, industry or from the startup scene, we will focus on joint development," he said.

In recent months, foreign businesses are flocking to add investment in China, hailing the country's economic resilience, market potential and sound business environment.

Just last month, 42 foreign-funded projects totaling $7.7 billion landed in Shanghai, a parameter city for foreign investment.

Swiss industry conglomerate ABB Group broke ground on its "latest, largest and most advanced" robotics factory in Shanghai in September. Chairman and CEO Peter Voser said the facility is poised to make "an important contribution to China's goal of sustainable, high-quality and high-tech growth and development".