The phoenix spreads its wings: China takes its prowess to the world
Confronted by US efforts to curb its emergence as a technology giant, China isn't retreating. Instead, its industries are accelerating a push onto the global stage, betting that the expansion will counter decoupling pressure from Washington and secure long-term growth.
The consensus is clear: China isn't "afraid" of its tech adversary.
Globalization isn't confined to just technology in a pivot driven by geopolitical friction and domestic economic realities. The outward thrust is about embedding Chinese standards in global value chains and cultivating new markets far from American shores.
The numbers paint a picture of determined, if complex, picture of China's overseas expansion. Outbound foreign direct investment in 2024 topped US$144 billion, up by 10.5 percent from the previous year. Investments are increasingly by-passing North America and even parts of Western Europe to flow into Southeast Asia, the Middle East, North Africa and more southern countries in Europe.
Hong Kong-based Casetify opened its first shop in Wuhan in January. The brand has build a worldwide following with its personalized phone cases.
Forget the old model of simply shifting factory production to countries with cheaper labor pools. Today's Chinese global trailblazers are taking technology, other industries and novel business models abroad, integrating them with local economies.
In the tech space, Shanghai-born Hesai Technology, listed on the Nasdaq, markets sensor products for car automation and robotics. It has become indispensable to the global autonomous driving supply chain, now counting 22 international automakers among its clients.
Hong Kong-based Casetify built a worldwide youth following with its personalized phone cases using savvy social media marketing and online influencers to bypass traditional marketing paths.
Capacity spillover
Some foreign expansion exemplifies "capacity spillover," exporting advanced manufacturing systems and know-how developed at scale domestically.
Battery behemoth CATL's deal with Ford Motor illustrates this trend. Ford is licensing CATL's lithium-iron phosphate technology for use in its US$3.5 billion US battery plant.
The solar industry provides another example. Facing US tariffs, the China industry has blanketed Southeast Asia with advanced factories. Malaysia, Vietnam, Thailand and Cambodia now host over 40 percent of global solar module capacity outside China.
Aggregate Chinese investment across solar, electric vehicles and batteries in Southeast Asia totaled US$17.6 billion in 2023. China's Trina Solar operates plants in Vietnam and Indonesia. Longi has invested billions in Malaysia.
A key tactic in this global push is the "ecosystem approach" of large supply chain leaders establishing offshore beachheads by pulling constellations of smaller domestic suppliers along with them.
Chinese electric car giant BYD has made Brazil its top overseas market with local production, and it's building its first European car factory in Hungary, set for a late 2025 launch. Plans reportedly include a second plant in Turkey and potentially a third somewhere in Europe, possibly with a dedicated battery factory.
A BYD factory is under construction in Camacari, Bahia state, Brazil, as of March 6.
In the digital realm. Internet titans Tencent and Alibaba are funneling capital into Southeast Asia's booming cyber economy, acquiring local players, backing startups and rolling out cloud infrastructure.
Tencent Cloud recently opened its third Indonesian data center, part of a network challenging established cloud providers in the region. Alibaba, via Lazada Group and fintech ventures, is deeply woven into the regional e-commerce fabric.
The strategy echoes playbooks used by multinationals like Samsung Electronics Co in Vietnam, where a US$23 billion investment over a decade created vast supplier parks so critical they reportedly received priority power access.
Challenge for smaller companies
China's vast legion of smaller companies has a critical choice: seize the opportunity to globalize or risk obsolescence.
Many of them are tightly bound to the domestic supply chains of the big Chinese companies venturing abroad. The opportunity to follow offers a sheltered path to internationalization, mirroring how Germany's famed Mittelstand group of companies and how Japanese suppliers historically expanded globally alongside their larger national conglomerates.
The danger, however, lies in inertia. Globalization is a "positioning race." If smaller niche leaders in China don't heed the call to go abroad alongside their giant customers, they will eventually be sidelined as suppliers are cultivated in new overseas markets.
Winning globally requires more than just undercutting competitors on price. Chinese tech companies increasingly recognize the need to build "corporate soft power" – shaping perceptions, fostering brand loyalty and connecting locally through narratives and values.
The "made in China" label still struggles with perception issues in many markets, where consumers often undervalue the actual quality of Chinese goods compared with, say, Japanese or German premium brands.
However, success stories are emerging.
The global success of games like "Black Myth: Wukong" and the animated film "Ne Zha," both based on Chinese mythology, showcased domestic creativity and technical expertise. "Black Myth" generated sales of US$1.1 billion in revenue from over 10 million copies sold in just three days.
Drone maker DJI Technology and camera firm Insta360 also have masterfully built global markets. Through user-generated content campaigns, tutorials and active social media engagement, they have created loyal customers bases by building brands around shared creativity, not just hardware specs.
Soft power
In business-to-business e-commerce, companies like medical device maker Mindray are cultivating influence beyond sales figures. By showcasing advanced AI-driven ultrasound systems at major European medical congresses and fostering collaborative research with academic and clinical circles, Mindray has created a high profile of credibility.
The rise of artificial intelligence offers another vector for soft power. China is investing heavily in large language models like DeepSeek and open-source multimodal platforms from firms like Stepfun.
As AI integrates deeper into products and services, the underlying models and their inherent values will shape narratives and user experiences globally.
All this would not be possible without deep support from the Chinese government.
Recent Politburo meetings have stressed "high-level opening-up" and using domestic strength to counter external threats. In February, President Xi Jinping held a meeting with the chief executives of private enterprises including tech giants like Huawei, Alibaba, Tencent, BYD and CATL to signal further support.
BYD's HAN L, on display at the recent Auto Shanghai 2025. Built on the e-Platform 3.0 Evo and support "megawatt fast charging," it is a co-branded modified vehicle with "Black Myth: Wukong."
The message is clear: China recognizes the capacity of the private tech sector to drive innovation that is aligned with national goals of developing AI, semiconductors and clean energy, and enhancing global competitiveness.
Financial infrastructure is also adapting.
The Hong Kong Stock Exchange has reformed listing rules to woo US-listed Chinese firms seeking alternative or dual listings. These reforms cater specifically to tech companies, offering a haven from potential US delisting risks.
Over 30 such companies had already listed in Hong Kong by early 2025, securing access to capital within a more politically aligned jurisdiction.
The long game
The ultimate measure of success for China Tech Inc won't just be market share, but rather sustainable global integration.
Friction is inevitable. China's leap to become a leader in electric vehicles has triggered EU anti-subsidy probes. Its rapid advances in semiconductor equipment, spurred partly by US sanctions aiming to block its progress, threaten established Japanese and South Korean dominance in critical niches. Managing these tensions requires more than just aggressive pricing.
Chinese firms going abroad must demonstrate shared interests in new markets, with local investment, job creation and the provision of genuine innovation that offers clear competitive advantages.
The long-term strategic prize lies in the emerging economies of the Global South: Southeast Asia, Central Asia, the Middle East, Latin America and Africa – areas with large populations and growth potential.
Surveys show that 77 percent of Chinese companies seeking overseas opportunities are targeting Southeast Asia. Investment is surging into Central Asia, with Uzbekistan welcoming over 1,300 new Chinese firms in a year. In the Middle East, Chinese electric vehicles, consumer brands and digital platforms are becoming ubiquitous. And in Latin America, Chinese direct foreign investment topped US$187 billion in 2003-2022, with a focus on technology and renewables.
Engaging these markets requires more than just exports. It involves technology transfer, local talent development and contribution to infrastructure. The essential is to create the markets of the future and share prosperity by embedding China's future into the growth stories around the world.
(The author is founder of WisePromise, a boutique advisory agency specializing in the international expansion of Chinese tech companies in the advanced hardware and energy sectors. He also serves as a geo-economic expert for several think tanks in Beijing.)
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