The company has opened a research laboratory in the well-known Fudan university, where researchers are developing new technology to improve its vitamin manufacturing processes.
Meanwhile staff at its new R&D centre just outside Shanghai are scanning Chinese-language literature for emerging developments by competitors or other institutes.
China, with its low-cost vitamin makers, has long posed a serious threat to European vitamin players, including DSM, the world's biggest vitamins maker since its acquisition of Roche vitamins in 2003.
But the Dutch chemicals company is trying to counter this pressure by stepping up its investment in the very market where its threat is located.
While it waits for regulatory approval for its new joint venture with vitamin maker NCPC, it has already seen the rewards of a collaboration with local researchers.
A team led by Professor Fen-Er Chen at Shanghai's Fudan university has already improved the process for making biotin, giving the European firm an advantage over its competitors.
Professor Chen expects to see further breakthroughs in other ingredients by the end of the year.
"I'm quite confident that this lab will reach more achievements by the end of the year or early next year," he told AP-Foodtechnology.com during a visit to his Fudan laboratory.
"Our target is to be the most successful in the world in processes - in terms of the lowest costs and most advanced technology," he said. "Another aim of the lab is to solve technical problems for DSM."
The researcher agreed to set up a joint lab with DSM in 2004 after being contacted by the company some years earlier. It had noticed his ongoing work in biotin, also known as vitamin H.
Since implementing part of the new, improved biotin-making process in its production, the collaboration is expected to start working on other products in the DSM portfolio.
These could range from CoQ10 to B vitamins or even resveratrol, a natural substance that is of interest to DSM because of its widely researched anti-cancer properties.
DSM's collaboration with Fudan - ranked number three in the country for organic chemistry - is not the only sign that the group views Chinese research capabilities highly.
At a new R&D centre outside Shanghai, the group has 12 staff working for the Nutritional Products business, as part of its global chemical process research.
"The main objective is to tap into local talent. There are a large number of graduates from Chinese universities who are very qualified," explained Vincent Jephcote, process research manager for the firm.
According to Jephcote, a large number of the some 1500 universities in China are doing top-end research. In the last five years, the country's postgraduate universities have been rapidly built up, with a big increase in equipment, a lack of which had held them back in previous years.
"Although they [the research institutes] are still young, it is only a matter of time before we start seeing top quality publications," said Jephcote.
"They will be able to compete with the best in Europe and the US over the next 10-15 years."
Jephcote's Chinese staff also monitors the local scientific literature, scanning both published research by competitors and academics as well as patents in chemistry and fermentation science.
"Most Chinese literature is not accessible in the west," he explained.
The Chinese lab can, in addition, play a part in the group's discovery programme, looking for new nutritional ingredients, perhaps within traditional Chinese medicine.
"The talent pool here is large," added Jephcote. "This year, China will produce some 4 million graduates, who may be inexperienced but will increasingly speak good English."
"We need to have a presence here given the size of this market."