Chongqing – A recent report by Savills examines the overseas expansion of Chinese businesses, highlighting the opportunities, challenges, strategies, and trends driving this global transformation.
As globalization grows, Chinese companies are increasingly expanding internationally, reshaping the global economy. For instance, Changan Automobile now operates in over 60 countries, and BMF Precision Tech Inc. is advancing in 3D printing globally through Japan.
"Chinese companies have been expanding abroad for more than 40 years. This is a complex, multifaceted process that involves moving from product exports to building global brands," said Louisa Luo, Head of Capital Markets and Industrial & Logistics at Savills China.
Data shows China's total goods trade in the first half of 2024 reached 21.17 trillion yuan (about 2.96 trillion USD), reflecting a 5.3% increase from the previous year.
Chinese trading partners and goods trade information. (Graphics/Chen Zhan)
While exports to traditional trading partners like the EU and the U.S. continue to grow, there has been a significant surge in exports to emerging markets, particularly ASEAN countries and Africa. This growth is fueled by the transformation of China's economic structure, industrial upgrades, and Chinese companies' ability to effectively manage costs.
From an industry standpoint, sectors led by manufacturing and innovative technologies are seeing notable growth. These companies are not only setting up production bases overseas but are also actively pursuing acquisitions in international markets.
The report also highlights the case of Chinese battery manufacturers, who are accelerating their global expansion. Overseas production is ramping up, and planned lithium battery supply chain investments will exceed 150 billion yuan in 2023.
Leading players such as CATL and Gotion High-Tech are employing a dual "export + overseas production" strategy to penetrate international markets.
Savills notes that Chinese companies are transitioning from local players with international aspirations to fully globalized brands. These firms are adopting diverse strategies for global expansion, such as forming supplier partnerships and pursuing mergers and acquisitions abroad.
Critical areas for Chinese companies as they expand internationally. (Graphics/Chen Zhan)
In addition, Savills highlights two critical areas for Chinese companies expanding internationally: comprehensive market research, which includes understanding local cultural, economic, and business factors, and corporate considerations, such as financial planning, talent acquisition, team building, and supply chain management.
As Chinese enterprises evolve from exploring foreign markets to establishing global brands, their strategies are becoming more innovative. This transformation involves expanding products, increasing production capacity, broadening industrial chains, and adopting a "born global" approach.
As Chinese firms continue to expand their presence worldwide, their adaptability and strategic foresight will be crucial in securing long-term success and shaping the next chapter of global business.