China has made significant progress in terms of economic development and market based reforms within the last twenty years. The country is no longer limited to a cheap production location for the rest of the world. It became a promising market with expanding capabilities for foreign direct investments (FDI) and new product development (NPD). Though Chinas NPD potential is being recognized, our knowledge about NPD-processes of foreign companies in China remain scarce. This paper contributes to research limitations about foreign innovation management in China. After a short literature review about international innovation management with a special focus on China, we present a secondary data analysis about innovation activities in China from a macro-economical perspective. We use actual data from the OECD and others to develop this macroeconomic framework about China as a (possible) place for innovation. Secondly, we augment this macro-economical perspective by a functional management perspective. We tackle the how- rather than the if-questions of foreign innovation management in China. These questions have been neglected in current research. Based on existing evidence about innovation activities of foreign companies in China we develope a case study about two German companies in China. The first company has just begun with it’s innovation management in China. The second company has more than ten years experience with innovation management in China. Both companies are highly successful with their activities in China as indicated by growth rates and annual R&D budget. By comparing these two companies, we gain insights about the focus of foreign innovation management in China. We develope managerial implications for foreign companies operating in China according to maturity of their innovation management.