More Chinese firms keen to expand overseas, survey finds
A growing number of Chinese enterprises are showing interest in expanding their business overseas, with Southeast Asian countries remaining the top choice, according to a survey released by United Overseas Bank on Thursday.
UOB (China) Ltd Personal Banking unveiled its newest report on the expectations of domestic enterprises in 2024, showing a generally optimistic attitude towards future development.
But with operating costs gradually rising globally, firms also seem to prefer strategies like looking for new markets and transitioning towards digitalization rather than lowering costs and increasing efficiency.
"Facing up to the challenges has become the new normal for most domestic enterprises, as they now concentrate more on ways to broaden the sources of income and economize on expenditure. We see a vital market here in China, thanks to those Chinese entrepreneurs with perseverance and vision," said Xin Tao, executive director and head of wholesale banking of UOB China.
A total of 600 business decision-makers and executives from medium-large and large enterprises, in fields like manufacturing, engineering, telecommunications and real estate participated in the December-January survey, which took the form of a 15-minute online questionnaire.
According to the survey, over 90 percent of domestic enterprises hope to reduce operational risks by diversifying their business into other overseas markets, while at the same time, improving profits and building an international reputation.
Among the various Southeast Asian markets, 48 percent of the participants chose Malaysia as their top choice, followed by Indonesia and Thailand.
As most Chinese enterprises searching for overseas development face obstacles, such as lacking talent or specified knowledge for overseas business, the survey suggested more financial support, and more connection with industrial organizations as well as big conglomerates, which could lead to more cooperation and learning opportunities.
Besides, the survey also emphasized the necessity of supply chain management, with more than half the respondents revealing their worries about the current tense geopolitical situation. Among all the industries, the service sector was the most affected.
More than 80 percent of enterprises are already on the way towards digitalization with an increasing financial budget in 2024 – from 10 percent to 24 percent – as efficiency can be improved through statistical analysis, according to the survey.
"Chinese enterprises going overseas is by no means a single and one-time action. It is a deliberately considered strategy that will drive the whole upstream and downstream industry chain to go overseas," said Wang Hao, head of UOB's China commercial banking division.
In 2023, the number of non-financial outbound enterprises with direct investment from China reached 7,913, a record 1,483 increase from the previous year.
China's outward non-financial direct investment surged 11.4 percent year-on-year to US$130.1 billion, second only to the high point in 2016, according to official data.
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