Chongqing - On May 18, the 2024 Land-Sea Economic Forum is successfully held at the Chongqing Yuelai International Convention Center. During the forum, the China Securities Research Institute released the Research Report on Chinese Enterprises' Overseas Development (2024).

Qian Wei, Chief Analyst of Overseas Economy and Major Asset Classes at China Securities, emphasized in the report that transitioning from exporting to establishing a presence abroad has become a crucial development strategy for many enterprises.

Qian Wei, Chief Analyst of Overseas Economy and Major Asset Classes of China Securities. (Photo/CITIC Press Group)

The 2024 Government Work Report outlines strengthening standards guidance and quality support to create more internationally influential brands, thereby supporting enterprises in their global expansion. Chinese business models are evolving from "bringing in" to "going out" and from simple "exporting" to full-scale international operations.

Qian explained that transitioning from exporting to going abroad signifies a comprehensive enhancement in global operations, brand building, and cultural export capabilities.

Unlike exports, which focus on straightforward sales, venturing abroad emphasizes long-term development, brand value, and cultural export, requiring a comprehensive upgrade in enterprise capabilities.

Qian observed that Chinese companies are expanding overseas through self-investment, supplier cooperation, and mergers and acquisitions. Their reach extends beyond Europe and the United States to emerging markets in Africa and the Middle East.

China tops global exports, shifts to high-value goods

Chinese manufacturing's global competitiveness and increased overseas investment have spurred the internationalization of construction projects. To meet the demands of urbanization and industrialization abroad, Chinese construction firms are focusing on providing infrastructure services in energy, transportation, and other sectors.

Qian added that China has held the world's largest export share for years, with products transitioning to higher added value. The proportion of traditional labor-intensive industries is decreasing, and manufacturing is shifting from trade to investment.

The rapid growth of China's new energy vehicles, photovoltaics, and lithium battery industries has boosted foreign investment, promoting the internationalization of industrial construction.

Additionally, Chinese construction excels in scale, technology, and a complete industrial chain. In 2022, 81 Chinese enterprises were among ENR's top 250 international contractors, with a combined global revenue of $11.7 billion, making up 27.5% of the total revenue of listed companies.

Chinese construction companies have the capability and experience to undertake major projects across various fields. Technologically, China leads in high-speed rail and hydropower, exporting construction equipment, cement, and steel, showcasing the advantages of its entire industrial chain.

Going global: economic growth trumps trade friction

Qian stressed that transitioning from exporting to going abroad is not merely a response to trade friction but an inherent requirement for economic growth.

The report indicates that drawing from experiences like Japan's, as indicators such as per capita GDP and trade shares improve, a country's corporate competitiveness increases, making overseas expansion a crucial option. Consequently, Gross National Product (GNP) begins to surpass Gross Domestic Product (GDP).

Qian emphasized that transitioning from exporting to going global is crucial for industrial upgrading. Top European and American enterprises already demonstrate their global production and operation characteristics. 

Whether it was Japan's past inability to sustain overseas expansion for outdated enterprises or the current shift from coastal, traditional export industries to high-end sectors in inland areas, these phenomena highlight that going abroad involves much more than just reducing excess capacity. Qian emphasized that industrial upgrading is the true essence.