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Xinyi Wu

The main risk for foreign businesses entering China is not geopolitics but fierce competition in the domestic market, an analyst said at the World Economic Forum’s Summer Davos.
Speaking on a panel in Dalian on Thursday, Joe Ngai, chairman of Greater China at McKinsey & Company, said securing access to the Chinese market was still a concern yet the real test lay in competing with local rivals.
“These guys are hungry ... they can beat everyone up, and you come in here, and the question is: what do you have to offer?” Ngai said.
“I’ve used this analogy of China’s business ecosystem being the world’s toughest gym,” he noted, comparing the aggressive local competition to a demanding environment that ultimately strengthened companies.
Tensions between China and other major economies such as the United States and the European Union have heightened scrutiny of cross-border trade and investment over the past year, making some companies increasingly cautious about their presence in the world’s second-largest economy.
But Ngai argued firms had come to realise that decoupling was “a far too simplistic way to think about the business world”, noting China’s industrial engine continued to underpin global supply chains.
“There’s no one who knows better about what China can provide than [Apple CEO] Tim Cook or [Nvidia CEO] Jensen Huang,” he said.
Apple, the world’s second-most-valuable company after Nvidia, has shifted parts of its manufacturing supply chain to India and Vietnam, but China remains home to the bulk of its production network. During a meeting with the commerce ministry in March, Cook noted that 80 of the company’s top 100 suppliers were still based there.
Meanwhile, Nvidia continues to eye the Chinese market – where it once held a significant market share – despite Washington banning exports of its most advanced chips to the country.
Cook and Huang were both part of US President Donald Trump’s delegation of prominent business executives during his high-profile visit to Beijing in May. Trump’s meeting with President Xi Jinping helped calm bilateral tensions following a protracted trade war that reached a boiling point in April 2025.
The visit was a positive sign that businesses were pushing forward and working together despite geopolitical tensions, Ngai noted.
“This year, I’ve seen more exchanges between boards and CEOs and leaders in China than I’ve ever seen before, which to me is a great sign of understanding and communication.”


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Multinationals remain committed to the Chinese market despite pressures, analyst says, citing the actions of Apple and Nvidia as evidence


Multinationals remain committed to the Chinese market despite pressures, analyst says, citing the actions of Apple and Nvidia as evidence.


Why Chinese competition, not geopolitics, is the biggest challenge for foreign firms

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Multinationals remain committed to the Chinese market despite pressures, analyst says, citing the actions of Apple and Nvidia as evidence

Multinationals remain committed to the Chinese market despite pressures, analyst says, citing the actions of Apple and Nvidia as evidence