Tencent’s new data center points to future globalization approach of Chinese fi rms

Chinese companies’ global ambitions were in the headlines again last week when Tencent Cloud, a cloud service venture under Internet giant Tencent Holdings, opened a data center in Frankfurt, Germany. It’s the fi rst time a Chinese cloud service provider has established a hub in Europe, which also points to the key approach for “Made in China” to go global in the future.

Over the past years, China has put a lot of emphasis on the global expansion of Stateowned construction companies, such as the promotion of its high- speed rail technology. Yet, the development of Chinese high- tech companies, especially some privately owned ones, should deserve more attention, which is expected to have profound impact on China’s globalization prospects. To a certain extent, high- tech services and products have already helped Chinese companies gain momentum in expanding their global footprint in recent years. Take Tencent’s overseas data centers as an example. Since the establishment of its fi rst global data hub in Hong Kong in 2014, Tencent has set up four other overseas cloud hubs in Singapore, Toronto, Silicon Valley and Frankfurt. It also plans to build three other centers in Mumbai, Seoul and Moscow this year, said a company press release.

The Chinese government seems to have well recognized the importance of high technology in boosting its manufacturing competitiveness in the global markets. Last week, the State Council, China’s cabinet, unveiled an artifi cial intelligence ( AI) development plan, pledging to make the value of AI industry exceed 150 billion yuan ($ 22.17 billion) by 2020 and 1 trillion yuan by 2030. It could be seen as part of a broader plan to encourage technological innovation and boost manufacturing capacity.

In terms of advanced technologies, China still lags behind many Western countries, but its encouragement to such emerging industries as cloud computing, renewable energy and AI will make it possible for its companies to move up the global value chain, which will be the key to Chinese companies’ global expansion in the future. Moreover, it should also be pointed out that China’s global- ization strategy should not only rely on its State- owned companies. In fact, quite a number of privately owned Chinese companies like Tencent and Alibaba have been performing well in international markets with their strong global competitiveness and profi tability. And their strength should not be underestimated in the country’s globalization strategy.