For Chinese firms going out, global success requires truly ‘going in’

Chinese companies are accelerating their global expansion, driven primarily by two forces. The first is technology. Amid tightening restrictions in the West, especially the United States, many Chinese firms struggle to access critical technologies, equipment, industrial software and even raw components. Without breakthroughs, China’s manufacturing risks a long-term decline.

A growing number of scientists, engineers and executives have taken the leap into entrepreneurship, often developing “me too” or “me better” products as import substitutes. Faced with the limits of domestic demand, however, companies are being pushed overseas for scale and survival.

In theory, they should feel welcome abroad due to their cost-effective solutions. But their motives are often met with suspicion amid geopolitical tensions. The European Union, for instance, has tightened its screening of foreign investment, a move seen as targeting Chinese companies in sensitive sectors such as artificial intelligence and semiconductors.