Chinese companies driving latest round of globalization

Editor’s note: How should Chinese enterprises grasp the opportunities of going global? Qin Shuo, a popular columnist, addressed this question in a recent post. Excerpts:

The ongoing trade frictions with the United States have not had as big an influence as expected on China’s export enterprises, and despite the higher prices caused by the US administration’s punitive tariffs, it is still hard for the US market to find alternative suppliers. As a result, US consumers will also feel the pain of the tariffs together with Chinese exporters.

Also, some Chinese export enterprises will relocate to other countries and regions to steer clear of the US restrictions against goods and services from China.

In fact, the difficulties Chinese enterprises face at the moment are mainly caused by domestic factors rather than external ones.

To some extent, the going out of China’s enterprises is not only a characteristic, but also a requirement of the current development stage, as well as being the strategic choice of businesses with global vision.

China’s investment overseas surpassed the foreign direct investment it attracted for the first time in 2015, and the gap has become wider ever since — China invested $158.3 billion overseas last year, and attracted $131 billion of FDI. It is a trend that will continue.

Chinese companies are going through the same stages as foreign enterprises have in China — export goods, build factories and set up research and development centers — and now some of them are in the second stage, and some have already begun the third, which will usher in a new phase of development for the Chinese economy.

Chinese enterprises should constantly improve their products, services and efficiency and obey the laws and respect the cultures of the countries in which they operate. Nobody can ensure their localization is successful but themselves.

Economic globalization is irresistible, and Chinese enterprises are the main players in this round of globalization, as they are playing a major role in the process of forging new global value chains and the allocating of global resources through going out.