CIIE Report Offers Vital Tips for Chinese Firms 'Going Global'

While the China International Import Expo helps multinational companies better navigate the Chinese market, many domestic enterprises are also joining the league of MNCs but need tutoring in their process of "going global".

This was pointed out by a report on globalization of Chinese enterprises released at the 9th CIIE, which drew to close on Tuesday. Among the leading authors of the report are consulting firm Deloitte and local media platform China Business Network.

Chinese companies need to move from simply "going beyond the domestic market" to really "moving into the local markets" and deploy their increasing strength in high technologies to counter risks in a world that is now harder to integrate. They also require the nurturing of more resilience to endure a much longer process for success, according to the report.

"Different from the previous two stages featuring product-based and capacity-based strengths, Chinese companies trying to explore overseas markets have now entered a brand new stage, which is marked by value chain globalization," said Lawrence Jin, chief growth officer at Deloitte China.

"The industrial upgrading and AI (artificial intelligence) revolution are offering new opportunities. At this stage, success hinges on the realization of three critical balances: between long-term strategy and agile operations, between security and compliance as well as commercial efficiency, and between global governance and local adaptation," he added.

New growth drivers, deeper integration with the local market and more resilience to counter risks such as the geopolitical headwinds will be crucial to the success of globalization of Chinese enterprises, the report pointed out.

The trend has been taking shape. In the first half of this year, exports of high-tech products reached 3.26 trillion yuan (US$489 billion), up 39 percent year on year and serving as a core engine for China's export growth.

Meanwhile, mergers and acquisitions, greenfield investment and local production have become the mainstream approaches for Chinese companies to get close to target markets and improve local responsiveness, while innovative models have kept emerging.

Deloitte China Research Managing Partner Lydia Chen said the process has moved toward systemic competition requiring coordinated multi-resource deployment and multi-dimensional capability integration.

"Today's localization covers far more than business and production, it extends to local insights, local talent, local supply chains, and above all, how deep it integrates in the local ecosystems," she remarked.

To facilitate this process, Deloitte partnered with CBN Research Institute to launch a service ecosystem alliance for the globalization of Chinese enterprises during the 9th CIIE, aiming to create an empowering platform for resource sharing and value co-creation.